In a recent judgement, the Court of Appeal ruled the Government had discriminated against a group of judges and firefighters on the grounds of age, race and equal pay in relation to changes to their pension.
This has prompted a flurry of activity from members of the Armed Forces, who want to know what difference it makes to them. We have been asked to clarify.
Firstly the statement doing the rounds, that the decision to move everyone onto AFPS 15 has been ruled unlawful by the Court of Appeal is not true. What the Court decided was that the transitional arrangements in the case of the Firefighters and the Judges were unlawful. That does not necessarily mean that the transitional arrangements in the case of the Armed Forces are illegal because the transitional arrangements adopted for each pension scheme were different, as were the pension schemes themselves.
The suggestion in several publications that staff who were transferred onto the new schemes must be put back in the position they would otherwise have been, refers to the firefighters and the judges. No ruling has been made concerning other schemes.
Meanwhile there are dangers. It is not necessarily a case of ‘nothing to lose everything to gain’. Some people have actually proffed from the new scheme (those with very long service, those with short service and no promotion, those who died in service).
In addition the Government has been discussing pension accrual rates across the whole public sector with a view to reducing (ie. improving them). This would have been to the benefit of all those on AFPS 15. This exercise has now been put on hold across the public sector – expressly because the potential implications of the firefighters ruling are not yet clear. So the ruling has already had a short term adverse effect.
Furthermore, the right of the Government to introduce new pension schemes has not been challenged. So in order to recoup any losses to the public purse from reinstating people on old schemes the Government will need to find the money elsewhere; this could very well lead to less generous schemes in the future – without any transitional arrangements or fewer pay increases/ lower allowances.
There are no free meals. And the unique aspect of Armed Forces pensions – an income stream for those who leave from age 40 (or thereabouts, depending on the scheme) could very well be revisited.
We continue to monitor the situation but be careful what you wish for.