The McCloud remedy changes may affect you if:
When the Government reformed public service pension schemes in 2014 and 2015, they introduced protections for older members. In December 2018, the Court of Appeal ruled that younger members of the judges’ and firefighters’ pension schemes had been discriminated against because the protections did not apply to them.
This ruling is called the McCloud judgment, after a member of the Judicial Pension Scheme involved in the case. Because of the ruling, all public service pension schemes that provided protection, including the LGPS, have been changed.
The changes are called the McCloud remedy. They remove the age discrimination found in the McCloud court case.
In 2014, the LGPS changed from a final salary scheme (a pension based on your pay when you leave) to a career average scheme (a pension which builds up based on what you earn each year). Older members who were closer to retirement were protected from the changes. When a protected member took their pension, the pension from the career average scheme was compared with the pension that would have built up in the final salary scheme. The member received the higher amount. This protection is called the underpin.
To remove the McCloud age discrimination, qualifying younger members will now receive underpin protection too. Underpin protection only applies to pensions built up in the remedy period, between 1 April 2014 and 31 March 2022. Underpin protection stopped earlier if you left the Scheme or reached your final salary normal retirement age (usually 65) before 31 March 2022.
From 1 April 2022, there is no underpin protection. Pensions built up after this date are based on the career average scheme only.
You are protected by the underpin if you were:
A disqualifying gap is a continuous period of more than five years when you were not a member of a public service pension scheme.
You can use a tool provided by the Local Government Association (LGA) to find out whether you are protected by the remedy. The rules for protection can be complicated. This tool does not cover every circumstance. Decisions you make about membership of a different pension scheme can change your protection in the LGPS.
You do not need to do anything. If you qualify for underpin protection, we will work out if your pension is due to increase when you take it. If you are an active or deferred member, we will give you an estimate of how the underpin may affect your pension in your 2025 benefit statement. If we are already paying your pension, we will review it. If you are due an increase, we will pay you arrears of pension payments with interest.
Most members won’t see an increase because the pension they build up in the career average scheme is higher than the pension they would have built up in the final salary scheme. If there is an increase, it is likely to be small.
The Local Government Association (LGA) have created new areas on their member website dedicated to the McCloud remedy. The new areas includes:
The resources can be found at LGPS McCloud remedy