LGPS rule change – the McCloud judgment
This is your formal notification telling you about the changes to the LGPS, what it means for affected members and what the City and County of Swansea Pension Fund (“the Fund”) will do. The LGPS along with other Public Service Pension Schemes changed their pension rules to remove discrimination against younger members that was found in the McCloud Judgement
What is McCloud?
When the Government reformed public service pension schemes in 2014 and 2015, transitional protections were introduced for older members. In December 2018, the Court of Appeal ruled that younger members of the judicial and firefighters’ pension schemes had been unlawfully discriminated against because the protections did not apply to them.
This ruling is called the McCloud judgment, after a member of the Judicial Pension Scheme involved in the case. Because of the ruling, there will be changes to all Public Service Pension Schemes that provided transitional protection, including the LGPS.
The changes are called the McCloud remedy and are intended to remove the age discrimination found in the McCloud court case.
This change came into force on 1 October 2023 the Local Government Pension Scheme (Amendment) (No. 3) Regulations 2023 SI2023/972. The Underpin protection only applies to pension built up in the remedy period, between 1 April 2014 and 31 March 2022. The underpin will have stopped earlier if you left the scheme or reached your final salary normal retirement age (usually 65) before 31 March 2022.
What do you need to do?
We will work out if you are protected. If you are, when you take your pension, we will work out if it will increase because of the underpin. Any increase is known as a ‘final guarantee amount’. Your protection may include membership in other public sector schemes such as NHS, Civil Service, Police, Fire or Teachers. You will need to confirm membership in these schemes for us as they count towards service for the McCloud Remedy. You only need to contact us if you have had membership in other public sector schemes.
Not many members will get a final guarantee amount because, for most members, the pension they built up in the career average scheme is higher than they would have built up in the final salary scheme.
Active and Deferred members
If you leave the pension scheme, we will work out a provisional underpin amount, but the final underpin (additional pension) amount will be calculated when you take your pension benefits.
We have until August 2025 to include information about underpin protection for all qualifying members in the Annual Benefit Statement.
If you become a deferred member or take your pension benefits before this date, we will work out your entitlement to the underpin (additional pension) as part of your pension calculation.
If you are protected and your LGPS pension is already being paid to you, we will work out if your pension will increase. We will do this as soon as we can, but reviewing all pensions in payment will take some time.
You do not need to contact us. Please be assured that we will contact anyone whose pension in payment will increase because of the McCloud remedy. We will only write to you if the new rules mean that your pension will increase.
Find out more You can find out more about the judgment by reading the McCloud member factsheet or the McCloud pages of the national LGPS member website www.lgpsmember.org/mccloud-remedy/ . This is an external website and has a tool to help you work out if you are affected and a short video to help you understand the remedy.