Moira Warner, senior intermediary development and technical manager at Royal London, comments on the government’s decision to opt for a deferred choice underpin as a solution for public sector workers affected by the McCloud judgement.
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The McCloud judgement refers to the 2018 Court of Appeal ruling declaring various government reforms of public sector schemes unlawful due to age discrimination
The judgement came after two Employment Tribunals concerning the pensions of Judges’ (McCloud) and Firefighters’ (Sargeant). The Government has confirmed that there will be changes to all main public sector schemes to remove this age discrimination.
Under the 2015 reforms, older members were entitled to transitional protection and able to remain in the original scheme. However these protections did not apply to younger workers who were forced to move into new schemes.
Now, from 2022, all legacy schemes will be closed, and all members will be transitioned to the new schemes. There will also be no tapered approach to accrual of benefits for the 2015 to 22 period, with members deciding at the point of taking benefits whether membership for this period falls entirely within the legacy or reformed scheme. There will be no option to select the most appealing aspects of each scheme.
About Royal London:
Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £139 billion, 8.6 million policies in force and 4,348 employees. Figures quoted are as at 30 June 2020.