Agenda item

Update on the McCloud Judgement

The judgement of the Court of Appeal in the McCloud case, that the transitional protection of 2015 Firefighter Pension Scheme are discriminatory, has implications for all public sector pension schemes. A verbal update will be given at the meeting


The Solicitor provided an update regarding the judgment of the Court of Appeal in the McCloud/Sergeant case, where it was claimed that the transitional protections of the 2015 Firefighters Pension Scheme were discriminatory on the grounds of age. She advised that this would have implications for all public sector pension schemes.


It was reported that the Schedule 22 Appeal Hearing took place on 16th December 2020 however no decision had been made to date. The Remedy Hearing will not take place until a decision on the Section 22 Appeal had been made.


The HM Treasury undertook a consultation which ended on 11th October 2020 by which looked at the remedy issue. The main focus of the consultation was about when the decision would need to be made by members in relation to moving schemes. The Treasury were currently considering consultation responses and expect to publish their response to the consultation shortly.  This would outline the policy intent of the remedy, including whether immediate or deferred choice would be adopted.


Once the remedy hearings had been dealt with than changes to both primary and secondary legislation would be required to remove the discrimination. The Home Office would need to work with the Treasury to understand the policy and proposed legislation and to draft regulations to make the changes required. In order to deliver the remedy to the timeline set out by the Treasury, the Home Office and the LGA Bluelight pensions team were committed to ensuring that all FRS were kept up to speed with all policy and regulation developments so that work could progress at pace.


For CFRS it was important that the process of considering what technology/administration processes will be required to implement the remedy was started.  An initial meeting has been set up with Cheshire Constabulary to consider the implications and contact has also been made with other FRS pension scheme managers to make tentative enquiries regarding a potential regional approach.


The Solicitor also provided an update on the Public Sector Exit Pay Gap. Board Members were informed that the new Restriction of Public Sector Exit Payments Regulations 2020 took effect on 4th November 2020, capping exit packages for all public sector employees and office holders at £95,000. The cap applied to the total amount payable when someone exits, including severance payments, any pension strain cost and notice payments in excess of three months. The enactment of the exit pay cap had resulted in judicial reviews and the need for further legislative reforms.  This was due to the apparent discrepancy between the obligations on scheme employers under the Cap Regulations to limit strain cost payments, and the requirement for administering authorities to pay unreduced pensions to qualifying scheme members under existing LGPS regulations.


On 22nd December 2020 three applications for Judicial Review (JR) of the Restriction of Public Sector Exit Payment Regulations 2020 were granted permission to be heard. These applications, which would be heard together in the latter half of March 2021, were made by ALACE/LLG, UNISON and GMB/Unite and contest the regulations on a number of grounds including their effect on the existing LGPS Regulations.  The outcome of these applications could impact on the Pension Cap Regulations.


The Ministry Housing, Communities and Local Government (MHCLG) opened a consultation in September 2020 in relation to reforms to exit payment terms for all local government pension schemes.  Consultation responses were due by 18th December 2020.  The outcome of this consultation was likely to lead to amendments to the LGPS Regulations.


In October 2020, the MHCLG sent a letter to all LGPS Administering Authorities detailing their recommendations.  It noted the conflict between the Pension Cap Regulations and LGPS Regulations and gives some guidance as to have to deal with any affected cases during the interim period. This would impact on very few individuals. At present there was only one individual within CFRS affected by the Exit Cap Regulations and the organisation were working with the individual in line with the published guidance.




[1]      the update be noted.