Local government McCloud rules expected in October 2023

The Public Service Pensions and Judicial Offices Act received royal assent in March, allowing individual government departments to make their own legislation with the aim of removing age discriminatory aspects of public service schemes.

When new public service schemes were introduced in 2015, older workers were allowed to continue building pensions in the legacy schemes, while younger workers were transferred into the new schemes. This was subsequently ruled as unlawful age discrimination.

In February 2021, the government confirmed that the legacy schemes would close on March 31 2022.

Affected members would be offered a choice of which pension benefits they wish to receive when those benefits are paid. This choice of pension benefits when the pension becomes payable is known as a “deferred choice underpin”. 

Speaking at the Pensions and Lifetime Savings Association’s local authority conference on June 15, LGA senior pensions adviser Lorraine Bennett said that the Department for Levelling Up, Housing and Communities would likely respond to its own consultation in the autumn, with draft regulations to follow shortly afterwards.

“We’re expecting those regulations to take effect from October 2023, but they will have retrospective effect back to April 2014 in England and Wales, and 2015 in Scotland and Northern Ireland,” Bennett said.

The DLUHC has indicated to the LGA that it would like to set up an implementation group when it publishes its consultation response this autumn, Bennett said.

She also warned that schemes may need to carry out additional cost calculations. A judicial review will decide whether the costs of applying the McCloud ruling should be included as part of schemes’ cost caps.

“If it’s decided that the costs should be met by government, then we’re looking at more retrospective calculations, unfortunately,” Bennett added.