The Department of Health and Social Care (DHSC) has announced a consultation on proposed changes to the NHS Pension Scheme regulations, which are required to implement the second part of the McCloud remedy.
In 2015 the government made changes to most public service pension schemes, including the NHS Pension Scheme. These reforms didn’t apply to members closest to retirement, who stayed in their legacy schemes with ‘transitional protection’. The Court of Appeal later found that this discriminated against younger members. This is sometimes known as the McCloud judgment.
The government is introducing legislation to make the changes needed to public service pension schemes to rectify this discrimination identified by the McCloud judgment.
You can read more about this in our changes to public service pension schemes web hub.
The first changes were introduced in 2022 closing the legacy schemes
The initial changes which were introduced in 2022 to support the McCloud Remedy, closed the legacy public service pension schemes on 31 March 2022.
From 1 April 2022, all members irrespective of age, have been members of the 2015 Scheme.
The proposed changes will offer members a choice of benefits
The proposed changes to the regulations will remove the effect of transitional protection by offering affected members a choice of legacy scheme or reform scheme benefits for their service between 1 April 2015 and 31 March 2022.
This is when the discrimination could apply and it’s called the remedy period
The changes will enable the NHS Pension Scheme to:
- Rollback pensionable service between 1 April 2015 to 31 March 2022 into the legacy scheme for members affected by the discrimination. This will mean members who were ‘unprotected’ and who had ‘tapered protection’ are effectively treated as if they didn’t move Schemes before 1 April 2022.
- Offer around 1.1 million affected members a retrospective choice of either legacy scheme or 2015 Scheme benefits for their pensionable service between 1 April 2015 and 31 March 2022.
- Offer an immediate choice to members who have already received benefits and the relatives of those members who died during the remedy period.
- Provide a choice on retirement, also known as a deferred choice election, of either legacy scheme or 2015 Scheme benefits for their pensionable service between 1 April 2015 and 31 March 2022.
- Correct any overpayment or underpayment of pension benefits or member contributions already paid because of either rollback or a member’s choice.
- Manage the consequences of the rollback of pensionable service.
- Facilitate the payment of appropriate compensation to address financial losses arising from the discrimination or implementation of the remedy.
The Department of Health and Social Care is seeking views from interested parties on the amendments.
How to respond
You can view the consultation documents and submit your comments online. The consultation will close at 11.45pm on 6 June 2023.