On 1 April 2015 public sector pension schemes were reformed and the Career Average Revalued Earnings (CARE) pension scheme was introduced.
Most pension scheme members were moved from their legacy scheme (final salary) to the reformed (CARE) scheme, but some protections were put in place for members who were close to their retirement date. These protections meant that older members stayed in their pre-reform schemes.
The Court of Appeal found that this discriminated against younger scheme members. The government is removing this discrimination for the period between 1 April 2015 and 31 March 2022. This is known as the remedy period.
From 1 April 2022 all of our NHS, Teachers, Police and Fire members became members of the 2015 pension scheme and the pre-reform schemes were closed to any further pension build-up. This means that members affected by the 2015 remedy and who choose to retire after 1 April 2022, will be entitled to both legacy and reformed scheme benefits.
Who these pension changes will affect
These changes will affect you if you joined a public service pension scheme on or before 31 March 2012:
- and were still a member of the scheme on or after 1 April 2015.
- or left the service after 31 March 2012 but returned within 5 years.
These changes will not affect you if you:
- joined a public service pension scheme after the 31 March 2012.
How these changes will impact you
All affected scheme members will have their pension benefits built up during the remedy period assigned to their legacy scheme.
When you retire, we will offer you a choice between receiving either legacy scheme or reformed scheme benefits for the pension built up during the remedy period.
As of 1 April 2022 all scheme members regardless of their previous protection will start building up pension in the reformed scheme.
If you have retired or are planning to retire
The government expects that processes needed to support you to make your choice should be in place by 1 October 2023, although schemes can implement these processes quicker if possible.
If you are retired or are planning to retire before this date, we will contact you as soon as we have the required processes in place to support you when making your choice of scheme benefits for the remedy period.
Any payments / tax free lump sums due to you after you decide, will be backdated to your retirement date, if you are affected.
Legacy scheme benefits from 1 April 2022
The legacy schemes were closed to further pension build up on 1 April 2022. However, your legacy scheme pension will remain secure and you won’t lose access to any benefits built up within your legacy scheme.
The legacy scheme’s rules still apply to these benefits. This means that you keep the right to access your final salary benefits at the pension age set out in your old scheme. You will also still have access to the same tax-free lump-sum when you retire.
Any pension built up in the reformed scheme after 31 March 2022 can be taken from your State Pension Age (SPA) if you are a member of the NHS or Teachers scheme. Active members of the Police and Firefighters' schemes can take reformed scheme benefits at age 60.
You can choose to retire before your SPA however, any reformed scheme benefits you take will be reduced to take into account your early retirement from the scheme. If you choose to retire from the reformed scheme early you can elect to defer the reformed scheme portion of your pension until the schemes normal pension age to ensure you don't receive any reduction in benefits.
If you are unsure about when you can take your reformed scheme benefits, this simple state pension age calculator can help. (opens in a new tab).
How to decide which scheme is best for you when you retire
When we offer you the choice between legacy and reformed scheme benefits, we will let you know the value of both schemes. This will help you make an informed choice and ensure you choose the scheme which benefits you the most.
What you need to do
You don’t need to do anything. We will contact everyone who is affected. There is no need to submit a legal claim to receive any pension changes.