What’s happening to your public sector pension?

This blog is written for those in public sector pensions who are interested in how their pensions in retirement are likely to be affected by Government interventions.

It looks at  the difficult areas for those in defined benefit schemes, the Annual and Lifetime Allowances (and the AA taper). This is particularly topical as we anticipate changes to legislation in the upcoming autumn statement

It contains an explanation explanation of how the McCloud judgement and these tax matters will impact those in the NHS Pension , using a thread of tweet from Tony Goldstone.

The Government has confirmed that there will be changes to all the main public service pension schemes, including the LGPS, to remove the discrimination and we also expect to see changes in the taxation of contributions

Focussing on LGPS

One of the largest public sector schemes is for those in local government or in the private sector but retaining rights to the LGPS scheme,

The McCloud judgement will not impact all public sector schemes in the same way. For instance, the reforms to public sector pensions agreed in 2012 were implemented differently in the Local Government Pension Scheme (LGPS) to the Fire and Judicial pension schemes.

The LGPS introduced a new scheme in April 2014 for all members, however an underpin was introduced for members who were in service on the 1 April 2012. This underpin was based upon the same principles as the protection arrangements that were deemed unlawful age discrimination in the Employment Tribunals brought against the Firefighters’ and Judicial Pension Schemes.

As for LGPS, the underpin ensured that members of the scheme who were in service at 1 April 2012 and meet certain age criteria would have their benefits calculated using the better of the 2008 rules or the 2014 rules.

The Government have therefore conceded that the underpin needs to be amended and have launched a consultation on amendments to the underpin in the LGPS. The proposal in simple terms is for the underpin to apply to all members who were in service on the 1 April 2012 until the 31 March 2022.

The qualification for the proposed revised underpin continues to be only for members who were in service on the 1 April 2012. Those joining the local government pension scheme after this date will not benefit from the revisions to the underpin.

How changes are affecting you – if you are in the NHS pension scheme.

There are many other public sector schemes not covered in this blog. The police, civil service, armed forces and teachers schemes are all  impacted in similar ways, I will be focussing on these schemes in the months to come as the likely uprating of benefits due to the spike in inflation will make many of these issues relevant to an even wider section of public sector pension membership.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to What’s happening to your public sector pension?

  1. Peter Tompkins says:

    Do you remember the intro of the AA and LTA were know as “pensions SIMPLIFICATION”?

    My head hurts just reading this blog. I can see dinner party conversation with many GPs who have not retired will turn to this complex 7 year assessment process. I had better swat up.

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