The government has responded to its 2020 consultation on proposals to remove age discrimination from the Local Government Pension Scheme (LGPS).
To ensure the LGPS underpin applies fairly between different types of member, the government is expanding the qualifying criteria to members, including those who had career breaks, as follows:
- were an active member of the LGPS or another public service pension scheme on or before 31 March 2012
- were an active member of the career average scheme
- did not have a disqualifying gap in service (more than five years), and
- leave active membership with a deferred or immediate entitlement to a pension, or they die in service.
Background
When the LGPS changed from a final salary to a career average pension scheme in 2014, members who were within 10 years of their Normal Pension Age on 1 April 2012 were given protection from the changes. This ‘transitional protection’ was challenged and, in 2018 the Court of Appeal held, in the case known as ‘McCloud’, that the arrangements gave rise to unlawful discrimination in those schemes.
The government committed to removing the discrimination from all public sector pension schemes. In the LGPS, the government has confirmed that this is being done by extending the underpin that protects older workers to all LGPS members who meet certain qualifying conditions.
What does this mean for members?
Members do not need to do anything at this stage. The scheme administrator will compare members’ benefits over the ‘affected’ period and if a member’s pension would have been higher in the final salary scheme, an automatic addition would be payable to make up the shortfall.
First published 10 May 2023