McCloud Judgement | Public Sector Pension Changes
What is the McCloud Judgement? If you are a Public Sector Worker and you are enrolled in your Workplace Pension, chances are you have heard of the McCloud Judgement.
But what is it and how will it affect you?
The McCloud Judgement affects, individuals who are a a Public Sector Worker and are enrolled in their Workplace Pension.
Examples include
– NHS Pension
– Teachers Pension
– Civil Service Pension
– Police Pension
– Firefighters Pension
– Armed Forces Pension etc.
Chapter Information (McCloud Judgement | Public Sector Pension Changes):
0:00 Introduction
0:29 Who does it affect?
0:54 The Legacy Pension
2:16 What Happened?
3:55 2015 Reform
4:29 The Problem
5:33 The McCloud Judgement
6:23 The Governments Reaction
8:37 Why 31st March 2022?
9:35 The McCloud Judgement FAQs
🔹 Commons Library – Research Briefings :
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Public Sector Pension Changes and the McCloud Judgment: An Overview of NHS Pensions
Pensions are a crucial aspect of retirement planning and financial security for employees. In the public sector, where individuals dedicate their careers to serving the community, pension schemes play a vital role in attracting and retaining talent. However, recent changes in public sector pension schemes, including the notable McCloud judgment, have resulted in uncertainty and raised concerns among employees, particularly those within the National Health Service (NHS).
The McCloud judgment, named after one of the claimants, is a landmark ruling that has significant implications for the public sector pension schemes, including NHS pensions. In brief, the judgment stemmed from a legal challenge to the 2015 reform of public sector pension schemes, which aimed to address age discrimination concerns. The government’s reform introduced the new CARE (Career Average Revalued Earnings) scheme, ending the previous Final Salary scheme, which was considered less fair due to its link to earnings in the final years of employment. However, the Court of Appeal found that the 2015 reforms were discriminatory towards employees closer to retirement age or those who were unable to adjust to the new scheme.
For those affected by the McCloud judgment, the ruling means they are entitled to remain in their legacy schemes until new arrangements can be made. This ensures they receive the same pension they would have received under the old scheme and compensates for the potential financial impact of the reforms.
In the context of NHS pensions, the McCloud judgment has stirred up considerable concern and confusion among healthcare professionals. NHS employees are worried about the impact of the ruling, uncertain about their future retirement plans, and seeking clarity from the government and relevant authorities.
The NHS Pension Scheme, one of the most comprehensive occupational pension schemes in the UK, provides defined benefits based on years of service and final salary. It offers a reliable and valuable retirement package to NHS employees, which has aided in attracting and retaining healthcare professionals.
However, the complexities surrounding the McCloud judgment and its implementation within the NHS pension scheme have left many employees uncertain about how it will affect their pension entitlements. Moreover, the government’s response to the ruling has been met with dissatisfaction by some healthcare workers, who feel they have been left in the dark about potential changes to their retirement benefits.
To address these concerns, the government has set up the NHS Pension Scheme Advisory Board, which aims to engage with stakeholders and ensure that the implementation of the McCloud judgment is fair and transparent. The board comprises key stakeholders from the NHS, trade unions, and relevant government departments. Together, they are working towards developing an appropriate remedy for employees affected by the judgment.
While the McCloud judgment presents short-term challenges, it also offers an opportunity for public sector pension schemes, including the NHS Pension Scheme, to reassess and improve their overall structure and fairness. The ruling emphasizes the importance of ensuring pension reforms are implemented without causing adverse effects on certain groups of employees, particularly those nearing retirement.
As discussions and negotiations continue regarding the implementation of the McCloud judgment, it is essential for the government, NHS, trade unions, and employees to maintain open lines of communication. Employees must receive timely and accurate information about any potential changes to their pension arrangements, enabling them to plan for their future with confidence and security.
Ultimately, while the McCloud judgment may impose short-term challenges and uncertainties on NHS employees’ pension entitlements, it also presents an opportunity to rectify any past injustices and create a fairer system for all. The successful resolution of this complex issue will be crucial in ensuring the continued attraction and retention of skilled healthcare professionals within the NHS.
if you carry on working after you have reached the official retirement age can you still claim your NHS pension whilst you are working
Hi . Thanks for such a clear and informative clip! Do you provide private consultation? If yes, what is your email address?
Hi, I'm in NHS 1995 section from 1997, I changed to 2015 through tapered protection in 2019. I am 60 this August and will be taking my 1997 pension. How does the McCloud remedy affect me? will I be offered the choice this August or when my 2015 section is due (age 67)?
Hi, I left the RAF in 1989 where I flew as 'specialist aircrew'. I was on a short service commission and the normal age to leave was 38 but the RAF was short of aircrew and introduced the specialist aircrew system. We would continue to fly or do jobs immediately concerned with flying to age 55 but with very limited promotion prospects. To compensate for the lack of promotion opportunity we were paid extra flying pay. When I left the RAF I discovered that my pension was based on my basic pay only and ignored my flying pay. MoD claimed that "flying pay" was an allowance and not pay. A group of us sought legal advice but we couldn't find a barister who would represent us. Since my pension is based on my final salary do you think it could be contested that my final salary should have included my flying pay ?
What happens to people that bought back years? Will those years be acknowledge in the 1995 scheme or the 2015?
Can I make a ERRBO for 1995 scheme to make extra years even tho it is closed for monthly contributions from salary?
Just wondering – have you any information about back dated interest, income tax etc. if people who have already retired change schemes. I took early retirement in June 2015, so the remedy period only covers 61 working days in my case but the amounts could be more significant for someone who retired a few years later.
Immediate thought is the new scheme would reduce my tax-free lump sum, but increase my pension slightly (so I would owe a back dated increases in income tax for 2015/16 onwards). I would also owe the increase in contributions from 2015/16 as well. Assume all of these would have to be back dated, with interest applied?
Could they make a more complicated choice? I'll probably stay on the legacy scheme to keep things simple since the amounts are pretty immaterial in my case.
Hello and I enjoyed your videos very much . I wondered if you could help me with a query .I joined the NHS in 2008 and was enrolled in that scheme.I didn't choice to be moved into the 2015 as I recall.I also seem to have the 2015 scheme also and continued paying into this until 2020 when I was proven by a employment Tribunal to be unfairly dismissed . I have to do a schedule of loss in regards my pension losses and any contribution from my employer stopped from my dismissal. What I an unsure of is the affect of the Mcloude judgement would have fo me now I have no more job with them and how do apply this in regards to the loss of my 2008 and 2015 pension .
Thank you
Hi. Thanks for this. I've been waiting for the info from TPS to let me know how I'm affected. The only info I do get is that my pension from the legacy scheme fluctuates as my best 3 years are not necessarily in the last 10 years now we have moved past march 2022. Should the dates and salary calculations only include contributions up to March 2022?
Very informative thank you. I do note though that special class status in the 1995 section of the pension is never mentioned, and people still hold it even though it's not awarded any more due its abolition post 90's. For example, I still hold special class status. This allows you to retire at 55 on full benefit. some people have it and don't have a clue because they aren't told.
Very confusing. I work in the NHS. I Will have 39 yrs service in and I’ll be 57yrs old in Nov 2202. So still too early to go without penalty (is it 5% for each year before I’m 60?) On the NHS ESR site, it still doesn’t show the figures with the mcloud 7yrs extra calculated. So difficult to make an informed choice. Do you think this will be resolved in Oct?
So many of.the armed.forces were forced from final.salary scheme to 2015, in 2015. At that point I personally had 15 years service. The remainder 7 years till 2022 (now left) was on 2015. My understanding is that I will be able to.revert my whole pension back to final salary and as armed forces are.in receipt of pension from the day they.leave (if.they do full.22 years+)
I should see a increase (of.what god knows) and backpack if any ( lump sum on old and new.combined) was more than legacy.
Is this correct and great video
Very informative thank you
Your videos are amazing, thanks for all the explanations. While I was watching them a lot of thoughts came into my mind. I am new in the UK (sorry for my English) and I´m going to work in the NHS in the next months, and I will try to get the highest salary as soon as I can. The question is: I am 37, so I am very old to start my contribution, but that is what I got, but let´s say I want to retire when I´m 60, I understand I can´t do it anymore because I will get the 2015 scheme, right? Or is it possible to retire when I´m 60 if I have SIPP? What happens if in the middle of the way I become blind? (this sounds like out of the context question, but there are cases in my family, I´m just worried).
The mcloud remedy has removed one discrimination and replaced it with another. You can not replace a service based pension with an age based pension without younger people being adversely and disproportionately affected. It’s madness. There will be more money and time fighting this out in court. The government already lost once so it’s not like they can say they have a good track record.
I took early retirement from the NHS at the age of 56 last year. This meant I retired 4 years early from the 1995 scheme and 11 years early from the 2015 scheme. I took the maximum lump sum from both schemes (reduced for early retirement). What does this mean for people who have already retired. Thank you
Hi.
Having left NHS pension scheme at age 52…ie I took 24 hr retirement…. (was a member of both the 1995 and 2008 sections), am I right in assuming I will offered the option soon to take the money held in the 2008 section or defer taking it?
If retiring before Oct 2023 after normal pension age of 55 has Passed and taking legacy scheme benefits but then returning to work part time in NHS, will I still be contributing to the 2015 scheme or do contributions cease once the initial pension is be received? Many thanks
Great video. So does this mean that although the final salary scheme finishes in April this year (I'm a teacher), the judgement implications have to be in place by October 2023. Just wondering when it will all be up and running so I can decide when I will retire