Department for Education consults on proposed changes to Teachers’ Pension Scheme

The Department for Education (the DfE) is consulting on a draft statutory instrument (The Teachers’ Pension Scheme (Amendment) Regulations 2022) which would amend the England and Wales Teachers’ Pension Scheme (TPS). The consultation will be of interest to teachers participating in the TPS’ (and other eligible staff), member representatives, TPS employers and other sector bodies.

The proposed changes would have two main outcomes:

1. Equal treatment of TPS members regardless of age from 1 April 2022 onwards; and
2. A choice of compensatory benefits for members who are now held to have been discriminated against by pension changes introduced in 2015.

When new public service pension schemes were introduced in 2015, transitional protection arrangements allowed older workers to continue building pension in their existing ‘final salary schemes’, whilst younger workers were moved into new ‘career average schemes’.

In McCloud v Ministry of Justice [2018] EWCA Civ 2844, the Court of Appeal found that this difference in treatment amounted to unlawful age discrimination, since workers born before the relevant cut-off date (1 April 1967) were treated ‘manifestly more favourably’ than those who were born afterwards.

To remedy this discrimination, the government introduced the Public Service Pensions and Judicial Offices Bill (the Bill) in the House of Lords on 19 July 2021. Subject to parliamentary approval, this puts in place a legal framework requiring relevant departments – including the DfE – to amend pension scheme regulations in order to implement remedies to the discrimination, as directed by the bill.

The DfE’s draft regulations propose such remedies and are currently being consulted upon at the same time as the bill is moving through parliament. This is to ensure that, as and when the bill is passed, the necessary scheme rule changes can be enacted for 1 April 2022.

The consultation, which closes on 24 January 2022, can be found, here.