This item is also published as a
blog.
In April 2015, as a part of wider public sector pension reforms, the Teachers’ Pension Scheme was changed from a Final Salary Scheme to a Career Average Revaluation (CARE) Scheme. In the switch, ‘protection’ was provided to those within ten years of retirement as of April 2012. Those teachers afforded protection remained in their legacy Final Salary Scheme, with a lower retirement age (the Normal Pension Age or NPA). To avoid a cliff-edge, teachers who just missed out on the protection were tapered-in, on a sliding scale.
However, subsequent action brought in relation to the firefighters and judges’ pension schemes (the McCloud/Sargeant case), judged the approach to be age-discriminatory to younger members. They were simply switched straight over with no protection or tapering.
The remedy
Having accepted the subsequent Court of Appeal’s ruling, the government set about seeking a fix (or remedy) and has now
published its response to consultation.
The remedy period being addressed is 1 April 2015 to 31 March 2022. The changes will apply to all members of the Teachers’ Pension Scheme who were in post on the 31 March 2012 and still in post on 1 April 2015, whether they are currently still in the scheme or not, or indeed have retired.
In line with
ASCL’s response, the government’s chosen route will be the Deferred Choice Underpin (DCU). Members in scope will be asked to make a one-time binary choice at the point they take their benefits from the scheme, usually retirement. The choice will be whether to take their original legacy scheme benefits or the new career average scheme (CARE) benefits, covering the remedy period. Until then, everyone will be put back into their legacy scheme. From 1 April 2022, everyone will be on the CARE Scheme.
Consequently, it is crucial that ASCL scheme members keep all their payslips and P60s.
What should you do now?
There is no need to do anything now as the implementation of these changes requires primary legislation, which will probably take over a year or so. There will also be the need for scheme-specifics, as the remedy applies to all Public Sector Pension Schemes.
ASCL will be providing further information once the dust settles.
Teachers’ Pensions have produced a useful summary
here.
For ASCL colleagues in the Local Government Pension Scheme (LGPS), the Ministry of Housing, Communities and Local Government will publish a response to the LGPS (England and Wales) consultation later this year.
Finally, some may see adverts, or receive emails, from organisations offering to fight their corner on this discrimination. This is a scam. The remedy proposes offering a free choice to all scheme members in scope, with no detriment. Press delete!
Jacques Szemalikowski is ASCL's Pay and Conditions Specialist: Pensions