Interview with Forces Pension Society reveals what McCloud success could mean for the Armed Forces
The Judges and Firefighters successfully challenged the rules under which some members of their respective pension schemes were transferred to the 2015 public sector pension schemes. The successful challenge was on the grounds of age discrimination. In December 2018 the Court of Appeal ruled in favour of the Judges and Firefighters and, in June 2019, the government was refused leave to appeal to the Supreme Court. The lead complainant for the Judges was called McCloud and, for that reason, our website always refers to this issue as ‘McCloud’.
In the following Q&A Mary Petley of the Forces Pension Society sets out what their success might mean for you and your family.
Q1. It is entirely legal to change pension scheme arrangements, so what were they challenging?
A1. The transitional rules for transfer to the 2015 public sector pension arrangements singled out those who were in service on 31 March 2012 with more than 10 years to serve until normal pension age for transfer to the new schemes. Those with less than 10 years to serve until normal pension age were allowed to remain on their current pension scheme. That meant that age was a determinant in these arrangements – and age discrimination is illegal.
Q2. The Court ruled for the Judges and Firefighters, not for the Armed Forces Pension Scheme (AFPS) so why should that matter to me?
A2. The government accepted that the Court of Appeal’s ruling in respect of the Judges and Firefighters had a read across to all the other public sector pension schemes as they, too, used age as a determinant for transfer in their transitional rules.
Q3. As public sector scheme authorities knew in 2018 that there was a read across and, in June 2019, they knew that leave to appeal to the Supreme Court had been refused, why hasn’t the position of transferees been sorted out?
A3. It is not that easy. Some people find that they are better off in AFPS 15 and it would be unfair to simply return them to AFPS 75 or AFPS 05. MOD have been considering all the options and are expecting to put their proposals out to pubic consultation later in the year. We in the FPS, representing your interests, will be looking very carefully at what they propose. We have already set out 3 ’tests’ against which any proposed remedy will be judged against before we commit to supporting it. These are that the remedy:
(1) unequivocally addresses the age discrimination contained in the 2015 Scheme’s transitional arrangements;
(2) in relation to the remedy period, provides the Member with the same unequivocal assurance that no one will be worse off and that those with accrued benefits will keep them;
(3) provides the member with the full understanding and opportunity to make informed decisions about their financial future.
MOD staff are aware of these tests; the FPS Chief Executive, Major General (Retd) Neil Marshall, has been directly involved in the technical discussions with the MOD and will remain closely engaged as the process moves to public consultation later this year.
Q4. So everybody who was transferred to AFPS 15 is going be entitled to whatever remedy MOD propose?
A4. No. Only those who were in service on 31 March 2012 and 1 April 2015 are included. If, for example, you were in Regular service on 31 March 2012, left for more than 30 days (periods of 30 days or less count as continuous service) and re-joined the Regulars before 31 March 2015, you would not be included.
Q5. I was transferred to AFPS 15 but I have since left the Armed Forces. Will I be excluded from MOD’s proposals?
A5. If you meet the criteria set out in the answer above, you will be included in whatever remedy is finally decided upon.
Q6. So now what?
A6. We all need to wait patiently for the end of the consultation period and the announcement of MOD’s plans. Keep an eye on the FPS website which will keep you posted on the latest information. We must emphasise that there is no point asking the FPS Pensions Team for ‘what if’ calculations at this stage because before we know what is actually planned we would simply be wasting our time and your money.
If you are a Member of the Forces Pension Society and have pensions-related questions (but, at the moment, excluding McCloud, for the reasons explained above), email us at [email protected]
If you are not a Member but would like to learn more about us, visit www.forcespensionsociety.org