Update on McCloud – addressing age discrimination
On 25 March 2020 the Economic Secretary to the Treasury laid a Written Ministerial Statement before the UK Parliament to provide an update on the progress the government is making to address the discrimination identified by the Court of Appeal in the 2015 reforms in some of the public service pension schemes.
Court of Appeal Judgment - Armed Forces Compensation Scheme
The Court of Appeal has recently upheld an appeal by Mrs Jane Langford, the unmarried partner of Air Commodore Green who died in 2011. Under the rules of the Armed Forces Compensation Scheme (AFCS), Mrs Langford was unable to claim an unmarried partner benefit from the AFCS as she remained married at the time of AC Green’s Death. The Court of Appeal has ruled Mrs Langford should be eligible to receive benefits.
Changes to Survivor Benefits
SPPA is undertaking an exercise to identify any pensions paid to survivors of same sex marriages or civil partnerships and review those where the scheme member had pre 1988 (1990 in the police) service that was not used in the award. SPPA will contact individuals whose survivor pensions have been revised to arrange for the revised rate and any arrears to be put into payment. For further information please see your pension scheme circular which can be found under Scheme Governance and Legislation - circulars. Date added 2 July 2019.
UK Government appeal rejected by Supreme Court
Scottish Ministers respect the decision of the Supreme Court to refuse the UK Government’s appeal in the McCloud and Sargeant cases. Occupational pensions policy is reserved to the UK, and the UK Government is now required to make remedial proposals to the Employment Tribunal. We will publish more information as it becomes available. In the meantime, SPPA will continue to administer pension schemes in line with the existing regulations. Background
Mixed Sex Civil Partnerships
The Scottish Government announced on 25 June 2019 that it will introduce legislation both in the Scottish and UK Parliaments that will extend the availability of civil partnership to mixed sex couples. The date mixed sex civil partnerships will be available will be determined by the legislative timetable but SPPA will introduce changes to scheme regulations to reflect the change when introduced.
Scottish Teachers’ Pension Scheme - Late Change to Employer Contribution Increase
Following the latest scheme valuation, the employer contribution rate for the Scottish Teachers' pension scheme was set to increase from the current rate of 17.2% to 22.4% from 1 April 2019. The revised rate of 22.4% was scheduled to cover the period 1 April 2019 to 31 March 2023.
Public Service Pensions – Court of Appeal Case Valuations
We note the UK Government's announcement that, in the light of the recent Court of Appeal judgment, it has paused the cost cap valuations for public service pension schemes. We note also its decision to proceed with increases to employer contribution rates. We continue to press the UK Government to meet the full cost implications of the contribution rate change and we will keep in close touch with them to ensure that the interests of members and employers in the Scottish public sector are fully represented.
Public Service Pension Reform
As part of the reforms to close final salary public service pensions in 2015, certain protections were given to those members who were closest to retirement.
Public Service Pension Reform - Legal Challenge To Transitional Protections
As part of the reforms to close final salary public service pensions in 2015, certain protections were given to those members who were closest to retirement. This has been challenged by members of the Judiciary scheme, and member of the Firefighters' schemes in England and Wales. On 20 December, the Court of Appeal found in favour of the claimants against the UK Government, ruling that the protections were discriminatory on grounds of age. Scottish Ministers are aware of the Court of Appeal's decision in the firefighters' tribunal case, and are considering the judgement.
GAD Factors
In the budget on 29 October 2018 the UK Government announced changes to the Discount Rate which is used for financing purposes in public service pension schemes. The discount rate has been reduced from 2.8% above CPI per annum to 2.4% above CPI per annum, with a resulting impact on actuarial factors used in the schemes. The Government Actuary's Department (GAD) is reviewing the factors and will issue revised factors to SPPA over the next three months. Some calculations for the NHS, Teachers', Police and Fire Schemes in Scotland will be suspended until the new factors are received.