Treasury confirms talks with unions after losing pension reform ruling
Liz Truss says government stands by 2015 reforms to public service pensions after transitional protections ruled discriminatory
The Treasury has confirmed it will meet with public service unions after a court ruled that elements of the government’s controversial 2015 pension reforms were discriminatory.
In a written statement yesterday, chief secretary to the Treasury Liz Truss said that the government respected the decision of the Supreme Court to refuse its appeal after the transitional arrangements in the reformed pensions schemes were ruled discriminatory.
The case, initially brought by the Fire Brigades Union and some judges, successfully argued that an overhaul of the Firefighter's Pension Scheme in 2015, which mirrored reforms across the public sector, discriminated on the basis of age as it included transitional arrangements. These meant the changes – including a move from a final salary to a career-average defined benefit – were not applied to people within 10 years of retirement age.
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Truss’s statement yesterday said that the transitional protections were intended to ensure people close to retirement age were treated fairly. These protections allowed members who were closest to retirement at the time new pension schemes were introduced to remain members of their respective old schemes, but the court found those too far away from retirement age to qualify for these protections have been unfairly discriminated against.
“As ‘transitional protection’ was offered to members of all the main public service pension schemes, the government believes that the difference in treatment will need to be remedied across all those schemes,” Truss said. “This includes schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and fire and rescue workers. Continuing to resist the full implications of the judgment in court would only add to the uncertainty experienced by members.”
As a result, she said that the government would now meet with unions to discuss the implications of the ruling. Truss has previously said that extending the protections to all pension scheme members would cost around £4bn, a figure trade unions dispute.
“The matter will be remitted to the employment tribunal in respect of the litigants in the firefighters and judicial pension schemes. It will be for the tribunal to determine a remedy,” she said. “Alongside this process, government will be engaging with employer and member representatives, as well as the devolved administrations, to help inform our proposals to the tribunal and in respect of the other public service pension schemes.”
Truss added that the government’s reasons for the 2015 reforms remain, as public service pensions are “a significant cost for the taxpayer, now and in the future”, and said that the judgment “does not alter the government’s commitment to ensuring that the cost of public service pensions are affordable for taxpayers and sustainable for the longer term”.
After the Supreme Court ruling earlier this month, civil service unions urged the government to clarify what it would mean for Whitehall pensions.
PCS general secretary Mark Serwotka said the decision was “a fantastic win for the FBU and a vindication of their strategy to legally challenge the government over their discriminatory pensions policy”.
He added: “It is also clear that many thousands of PCS members in the civil service pension schemes, and other public service schemes, have also been discriminated against in the same way as FBU members, at the time that pension reforms were imposed in 2015.
Prospect deputy general secretary Garry Graham said: “It is unclear yet what the legal remedies may look like. What is clear is that they are likely to be complex – vary by impact across schemes and involve a range of detailed assumptions.”
He added that Truss’s £4bn cost estimate was a “wild figure” that “appears to have little substance”.
FDA assistant general secretary Lucille Thirlby told CSW that the FDA believed the ruling should be considered on a scheme by scheme basis.
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