Early retirees ‘at risk of losing out’ in pension changes, union warns

Cabinet Office urged to adopt rapid correction regime following landmark McCloud judgment
Anthony Devlin/PA Archive/PA Images

By Jim Dunton

19 Oct 2021

The civil service’s biggest union has warned that some former civil servants who have retired early on health grounds are at risk of losing out financially despite the government’s plans to fix a botched reform to public sector pensions.

PCS called on the Cabinet Office to follow the lead of the Firefighters’ Pension Scheme and agree to rectify discrepancies between what retirees should receive and what they actually are receiving within 90 days.

The issue stems from 2015’s reforms to public sector pensions, which were declared illegal at the High Court because elements treated pension scheme members differently based on their age. The judgement was upheld by the Court of Appeal in December 2018.

The government’s remedy to the problems exposed in the case – known as the McCloud judgment – allows civil servants to chose which of two schemes they would like their pension benefits to be calculated under, usually at the point they retire.

PCS said that around 2 million public service workers were members of schemes affected by the McCloud judgment and that in most cases no action would be required on their part until they retired.

However the union said a “small number” of scheme members who retired on ill health grounds after the 2015 reforms came into effect also needed to have their payments adjusted to reflect the High Court decision.

It said those scheme members should not have to individually pursue claims and urged the Cabinet Office to follow the example of the 90-day agreement reached between the Firefighters’ Pension Scheme and the Fire Brigades Union.

“PCS is concerned that there are members of the civil service scheme already in receipt of pension benefits which must be rectified to comply with the McCloud judgement,” it said.

“We believe it is unreasonable to expect this group, however small in number, to suffer detriment for an indeterminate period and we welcome the news that the Fire Brigades Union has been able to reach an agreement.”

PCS said it believed that most of the Civil Service Pension Scheme members affected would have either already been granted ill-health retirement or would shortly get it.  The union said members could have a legal claim to have their pension payments corrected in their favour.

“The immediate detriment issue has been tabled for discussion with the Cabinet Office,” it said.

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