Government statement on Supreme Court’s decision not to allow appeal in judges’ and firefighters’ pensions cases
On 27 June 2019, the Supreme Court denied the government permission to appeal the Court of Appeal’s judgment that the transitional provisions in judges’ and firefighters’ pension schemes were age discriminatory. The cases will now be remitted to the Employment Tribunal to determine remedy. In the meantime, the government has issued a written statement in parliament on the consequences of this decision.
These cases date from cost-saving reforms following the 2011 Hutton Report. The government implemented a number of changes across public sector pension schemes in 2015, including moving from a final salary basis to a career average revalued earnings basis. Transitional provisions applied to protect the rights of all those who were within 10 years of their normal pension age (NPA) on 1 April 2012, who were permitted to remain members of their old schemes. Tapered protection applied to those with 10 to 14 years to go until NPA and members who were more than 14 years from NPA had no protection and were transferred into new schemes offering less generous benefits. The government argued that the protected period was necessary to allow those closest to retirement more time to make adjustments to their financial planning and to maintain consistency across the public sector.
The Court of Appeal ruled that the transitional provisions in the judges’ and firefighters’ pension schemes were age discriminatory because younger members were being treated less favourably and the government had failed to show that it was pursuing any legitimate aim. In fact, those closest to retirement were least affected by the changes because benefits already accrued under the old schemes for past service were protected for all. The Supreme Court refused permission to appeal because the government could not demonstrate that it had an arguable point of law. This means that the case will now return to the Employment Tribunal to determine the remedies for the 6,200 members.
The government’s written statement dated 15 July 2019 confirms its view that, since transitional protection was offered to members of all the main public service pension schemes, the difference in treatment will now need to be remedied across all of those schemes. In addition to the judges’ and firefighters’ schemes, this will include the NHS, civil service, local government, teachers, police and armed forces schemes.
Initial estimates suggest that remedying the discrimination will increase scheme liabilities by approximately £4 billion per year since 2015.