What is the McCloud judgment?

The Government reformed public service pension schemes in 2014 and 2015 moving from final salary schemes to career average schemes. Members who were born before 1 April 1957 had their pensions protected from the changes.

In essence this meant that when they retired, their pension fund compared:

• the career average pension they built up before age 65, with
• the pension they would have built up in the final salary scheme.

If the final salary pension was higher, the difference was added to their pension. This protection is called the underpin.

In December 2018, the Courts ruled that younger members of the judges’ and firefighters’ pension schemes had been discriminated against because the protections did not apply to them.

As a result, the rules of all public service pension schemes, including the LGPS, changed from 1 October 2023. The changes are known as the McCloud remedy and they remove the age discrimination found in the McCloud judgment. Eligible younger members are now protected by the underpin, although we do not expect many people to be affected. For those few members that are affected we do not anticipate the impact to be material.

A scheme member, or a dependant of a scheme member, may qualify for underpin protection if the member was in the LGPS or another public service pension scheme before 1 April 2012 and was a member of the LGPS at any time between 1 April 2014 and 31 March 2022 as long as they did not have a disqualifying break. A disqualifying break is a continuous period of more than five years of not being a member of a public service pension scheme. A scheme member, or a dependant of a scheme member, will not be affected if the member did not pay in to the LGPS before the 1 April 2012.

What happens next?

If an LGPS pension is already being paid to you, we will work out if your pension will increase. We will do this as soon as we can, but reviewing all pensions in payment will take some time.

You do not need to contact us. Please be assured that we will contact anyone whose pension will increase because of the McCloud judgment. We will not write again if your pension is unaffected by the changes.

Further information

You can find out more about McCloud by visiting the national LGPS member website:

www.lgpsmember.org/mccloud-remedy/

Contact us

Call:     0300 200 1022

Email:   [email protected]

Please note that our Helpdesk is closed for the festive period from 1 pm on 22nd of December until 10 am on the 2nd of January 2024.

Yours sincerely,

Paul Punter

Head of Pensions Administration - East Sussex Pension Fund