What happens if the Government selects “Immediate Choice” as the way it will “fix” the discrimination identified in the McCloud case?
In its current public consultation document, the Government seeks views on its proposals for dealing with the discrimination caused by the transitional arrangements imposed when the new pension schemes were introduced across the public services in 2015 (for those in the military this means the introduction of AFPS15).
One of the principle matters under consideration is the timing of the decision to be made regarding staying on the present scheme, or switching to the alternative scheme for the period 01/04/2015 to 31/03/2022 inclusive.
The two options are “Immediate Choice” (IC) or “Deferred Choice Underpin” (DCU). It is expected that the Government will make its decision towards the end of this year.
It is no secret that the Forces Pension Society prefers the DCU option as it is the only one which allows serving personnel to make a decision based upon their actual service, as opposed to being asked to make assumptions as to future career patterns (which may prove to be right or wrong) under the IC option. It is our belief that many of the main public service unions also favour the DCU option.
However, the wordings of the consultation document makes it apparent that DCU is more complicated and our sense is that the Government might prefer the “early closure” offered by the IC option.
So what does it mean if the IC option is selected?
Well first it’s important to understand that the immediate in IC is not really immediate at all.
The consultation document suggests that “Under the immediate choice exercise, members would make this decision in the year or two after the point of implementation in 2022” (page 4 para 3).
During the intervening months/years Government will need to pass new legislation for all of the affected public service schemes. Meanwhile scheme managers will need to develop new processes and calculators to facilitate the changes. At some point we expect each eligible member [1] to be contacted and to have their choices explained.
It is too early to anticipate what form the notification will take but we will be lobbying for the best possible communications from the MOD to members to help them make the best choices possible in 2022 onwards. It is vital that if you are an eligible member, (or the surviving dependant of an eligible member that has died after 1st April 2015), that you make sure that your contact details are up to date on JPA (members still serving), or that Veterans UK are aware of your address (all other eligible members).
We expect that survivors of those that have died, or those that have left the military or who are expected to leave service prior to 31st March 2022 will be amongst the first to be contacted in connection with the choices available following the McCloud judgement.
We will of course be able to assist our members with their decisions when the time comes, but for the reasons outlined above we would ask you not to ask us for this assistance until you have been contacted by the MoD. At this stage we are unable to assist with “what if” scenarios – the processes, legislation and calculators have not yet been built.
[1] Eligible member here means anyone that was in service on or before 31st March 2012 and on or after 1st April 2015 (with any associated break in service being 5 years or less).
