Unions seek meeting after government loses final challenge to ‘£4bn’ pension ruling
Appeal had led to delay in revelation of the civil service pension scheme
Trade unions are calling for meetings with government after the Treasury lost the final stage of its appeal against a judgement that public sector pension reforms introduced in 2015 were discriminatory to younger workers.
The Supreme Court last week rejected a government appeal against a High Court ruling that the changes to pensions made in 2015, including for civil servants, had been discriminatory.
The case, initially brought by the Fire Brigades Union, successfully argued an overhaul of the Firefighter's Pension Scheme in 2015, which mirrored reforms across the public sector, were discriminatory as they included transitional arrangements that 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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After an initial ruling, in December the Court of Appeal ruled the protection offered to older members unlawful, and the Supreme Court last week refused the government leave to appeal, closing its final avenue to challenge the ruling.
Chief secretary to the Treasury Liz Truss said in January that if the transactional protection offered to some scheme members was extended to all, it could have a £4bn a year impact on public-sector pension finances.
As a result, the Treasury delayed a revaluation of pensions schemes that had been due to take place, and which was expected to lead to a reduction in contribution rates for civil servants.
Unions slam "wild" £4bn figure
The Supreme Court ruling means the firefighters' case will return to an employment tribunal for remedy, but civil service unions urged the government clarify what it would mean for Whitehall’s scheme.
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.
“PCS is already pursuing this urgently with the government, via the Treasury and the Cabinet Office.”
Prospect deputy general secretary Garry Graham said that although the Supreme Court judgements did not find that the broader pension changes were inherently unlawful, but that the protections afforded to those closest to retirement had a discriminatory impact.
Prospect is seeking an urgent meeting with the Cabinet Office to discuss the implications of the judgement, Graham said, as the impact of the decision on individual schemes may differ.
“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. Prospect is demanding early engagement on these issues and will be seeking a clear undertaking as a result of the judgement that no members will be disadvantaged. We want to maximise the options available to our members so ensure that no one is left in a position of detriment.”
He said that Truss’s suggestion that the ruling would cost £4bn annually was a “wild figure” that “appears to be little substance”.
He added: “In losing on a point of law, the government cannot use this as an opportunity and excuse to seek to make detrimental changes to pension arrangements either in the civil service or the wider public sector.”
FDA assistant general secretary Lucille Thirlby told CSW that was that there will be a meeting between the Treasury and the TUC next week to discuss next steps in relation to public sector pension schemes and to agree processes for full engagement with relevant unions.
She said that the FDA’s view was that the ruling needed to be considered on a scheme by scheme basis.
“We think it should be looked at on that basis, because of the different schemes and workforce demographics across the Public sector, but we will wait to have more information on the outcomes from the engagement between Treasury and the trade unions”
Responding to the judgement, a Treasury spokesperson said: “We are disappointed by this decision. The government will now consider how best to compensate those affected by the judgment as part of the court process.
“The judgment does not alter the government’s commitment to public sector pensions that are fair to both workers and taxpayers.”
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