Source · Select Committees · Public Accounts Committee
Recommendation 7
7
As a part of the 2011–2015 reforms, HM Treasury offered ‘transitional protection’ to those closest...
Conclusion
As a part of the 2011–2015 reforms, HM Treasury offered ‘transitional protection’ to those closest to retirement. This meant that scheme members within 10 years of their normal retirement age would see no change to their pension age or their expected pension.12 In 2018, the Court of Appeal ruled that these protections were discriminatory on the basis of age (the ‘McCloud judgment’).13
Government Response
Acknowledged
HM Government
Acknowledged
Introduction from the Committee Around 25% of pensioners and 16% of the working-age population are members of one of the four largest public service pension schemes (the armed forces, civil service, NHS and teachers’ pension schemes). In 2019–20 the four schemes made pension payments of £33.5 billion—funded through around £8.2 billion of employee contributions and around £25.4 billion of taxpayer funding—with scheme members on average receiving around £10,000. HM Treasury has been concerned for some time about the rising cost of public service pensions to the taxpayer and it introduced reforms between 2011 and 2015 aimed at making them more sustainable and affordable. As a result of those reforms, the most recent forecasts show that costs are expected to fall over the long-term from 2.0% of GDP in 2019–20, to around 1.5% of GDP from 2064–65. In December 2018 the Court of Appeal ruled that parts of the reforms were unlawful (the ‘McCloud judgment’) – as the special protections offered to those closest to retirement were found to be discriminatory on the basis of age.