The Public Service Pension Remedy is sometimes referred to as the ‘McCloud Judgement’.
In 2015, the government made changes to most public service pension schemes including the NHS Pension Scheme.
The reforms did not apply to members within 10 years of their Normal Pension Age (NPA) on the 31 March 2012 who remained in their legacy schemes with 'transitional protection'.
The Court of Appeal later found this to be discriminatory against younger members.
The government is removing this age discrimination from public service pension schemes in 2 parts.
The first part was completed in 2022 with all active members from 1 April 2022 now being members of the 2015 Scheme. This provides equal treatment for all active pension scheme members.
If you were a member of the 1995 or 2008 Scheme, you'll keep any service you've earned up until 1 April 2022. You’ll be able to access these benefits in the same way and at the same time as you can now.
Any pension benefits you earn after the 1 April 2022 will be in the reformed pension scheme.
The second part is to put right, or 'remedy,’ the discrimination that could have taken place between 1 April 2015 and 31 March 2022. This is known as the remedy period.
The Public Service Pension Remedy will:
- return any service that affected members have in the 2015 Scheme during the remedy period back into the 1995 or 2008 Scheme on 1 October 2023
- give affected members a choice of if they receive 1995, 2008 Scheme or 2015 Scheme benefits for their service in the remedy period
Who does this impact
Only some members will be affected by the changes.
You’re affected if you joined a public service pension scheme on or before 31 March 2012 and:
- you had pensionable service between 1 April 2015 and the 31 March 2022 or your retirement date if earlier, or you left service after 31 March 2012 but returned within 5 years
- your pensionable service was in the legacy scheme or 2015 Scheme, but would have been pensionable service in the legacy scheme but for the discrimination
- you did not choose to give up your transitional protection to move to the 2015 Scheme
If you’re receiving a spouse’s or dependant’s pension for a late member who joined a public service pension scheme on or before 31 March 2012 and who was still a member on 1 April 2015, you may also be asked to make a choice.
If an eligible member has died since 1 April 2015, we'll review these cases as a priority.
The choice between benefits will fall to the late member’s surviving spouse or partner. If there are children also in receipt of a survivor pension and the decision maker lives in a separate household to the child, any decision taken will not affect the child’s pension.
If the child and decision maker live in the same household, the usual rules around total survivor benefits payable will apply.
We’ll be reviewing affected dependant benefits as a priority.
If you’re affected, we’ll write to you to provide you with more information to help you understand what you’ll need to do.
You'll be asked to decide which pension scheme benefits you would like to receive for the remedy period if you were:
- a member of the Scheme on 31 March 2012 and continued in service between 1 April 2015 and 31 March 2022 or your retirement date if earlier
- a member of the scheme on 31 March 2012 then left service but returned within 5 years
If you're an affected member, the government has confirmed any continuous service you have between 1 April 2015 and 31 March 2022 will be placed into your legacy scheme. This will be from the date the deferred choice underpin is implemented.
We aim to start offering members this choice on retirement from April 2024.
If you’ve already retired, or retire before 1 April 2024, we’ll write to you and ask you to make your choice retrospectively. If needed, we’ll backdate all payments to your date of retirement.
When your benefits become payable when you retire, you’ll be asked if you want to receive legacy scheme or reformed scheme pension benefits for your service between 1 April 2015 and 1 April 2022. We’ll provide you with information at the time to help inform your decision.
Asking you to make this choice when you retire means you’ll know what you’re entitled to under each option, making it easier for you to make the right decision for you.
Where members can show that they would have acted differently when making decisions about their Scheme membership had it not been for the discrimination, the government has said there will be a way for these cases to be considered by individual pension schemes.
Guidance on how members can submit contingent decisions for consideration and how these cases will be administered in the NHS Pension Scheme will be added to our website.
Most eligible members will see no change to their tax position over the remedy period.
As pension accrues at a lower rate in the legacy scheme, it's less likely you’ll incur higher Annual Allowance charges as a result of this period of service being placed into the legacy scheme.
The government has stated that for some members, the pension changes will cause their tax position to change. This could result in tax charges for the member, or the member becoming entitled to a reimbursement of tax previously paid.
The pension changes may mean that some individuals will have to pay new or higher Annual Allowance charges, but typically only where their projected pension at retirement has increased. Adjustments to Lifetime Allowance (LTA) charges may also be required, where retired members’ accrual changes.
Some members may also face changes in their contributions in respect of the remedy period, which may also affect their income tax position.
If a member has already retired, a member’s total pension income may also change and tax will be payable on any increase in pension.
It's not possible for us to process Scheme Pays applications at this time for charges you may incur in future.
The government is currently considering how Scheme Pays and repayment plans can be used to accommodate any increases in tax charges that may arise from the changes.