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Public Sector Pension Ruling and the Armed Forces

On 15 July the Government issued a statement in response to the Court of Appeal’s ruling against it in the McCloud case (the challenge by firefighters  and judges to the transitional arrangements that accompanied their new 2015 pensions schemes) and the subsequent Supreme Court decision to refuse it leave to appeal against it. In the Court of Appeal ruling, the ‘transitional arrangements’ (ie who did and did not have to transfer to the new schemes) were ruled discriminatory and thus unlawful.

The full Government statement on the subject can be found here

What does it mean?

  • The Government has accepted that there is read across to all other public sector schemes including the Armed Forces.
  • A remedy for the firefighters and judges will now be decided at the employment tribunal.
  • In parallel Government will be will be engaging with employer and member representatives in respect of other schemes to determine appropriate remedies. We will be fully engaged in this process.
  • Timelines are as yet unclear – but don’t hold your breath, there will not be a quick fix.
  • The judgement has blown a £4 Billion hole in the Government’s annual finances.
  • This judgement is likely to benefit a good number of Service personnel, but it won’t benefit all – especially those who joined up after 1 April 2015 – so don’t expect the AFPS15 scheme to go away. It will not.
  • However given that ‘the judgment does not alter the Government’s commitment to ensuring that the cost of public service pensions are affordable for taxpayers and sustainable for the long term’ the future is less certain and inevitably it will be looking at other ways of mitigating the additional expense. We do not know what these will be, but the new 2015 public sector schemes came with a promise that the Government would not need to look at new schemes for 25 years. We would imagine it now feels released from that promise.

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