2015 Remedy FAQs - Background

Following negotiations with groups representing workforces, the 2015 public service pension scheme reforms included a policy of transitional protection. This meant members closest to retirement stayed in their legacy scheme as they had the least amount of time to prepare for the changes

The Court of Appeal later found this policy to be discriminatory against younger members in some schemes. Following the ruling the government confirmed that it would take steps to address the discrimination in all affected public service schemes.

Since the judgment the government has been working on different options to address the discrimination.

The government set out two proposals in a public consultation in July 2020 to gather views on which proposal would be better to remove the discrimination.

Since the public consultation closed in October 2020, the government has been working through all the responses and has now published its response setting out its final policy decisions. The government will address the discrimination through a ‘deferred choice underpin’. This will allow eligible members a choice, at the point their benefits are paid, of which pension scheme benefits they would prefer to take for the remedy period.

To address the discrimination identified by the courts, eligible members who were moved to the reformed pension scheme in 2015 (or later if they had tapered protection) will be moved back into their legacy pension scheme for the period during which the discrimination occurred, between 1 April 2015 and 31 March 2022.

When payment of pension benefits commences for those members, or members who were originally protected, they will then receive a choice of which pension scheme benefits they would prefer to take for the period. This is called a ‘deferred choice’.

The choice will be between the member’s legacy pension scheme benefits and their reformed pension scheme benefits.

Deferring the choice until the point benefits are paid allows individuals to make their choice of which pension scheme benefits are better for them, based on facts and known circumstances as opposed to assumptions on their future careers, health, retirement and other factors. The level of both pension scheme benefits will be known at retirement.

Individuals that meet the following criteria are in scope of the changes:

  • Were members, or eligible to be members, of a public service pension scheme on 31 March 2012;
  • Were members of a public service pension scheme between 1 April 2015 and 31 March 2022; and
  • The two periods above were continuous (or treated as continuous under the scheme regulations, including those with a qualifying break in service of less than 5 years).

The differences between the legacy and reformed pension schemes mean the set of benefits that is best for members depends on personal circumstances and preferences. This is why the government is providing members with a choice, to ensure they can choose which scheme benefits are better for them.

At retirement, schemes will provide information to members setting out their entitlement under both options, so members will have a clear understanding of the benefits available to them.

The government cannot simply place all members into their legacy scheme without allowing them access to their reformed scheme benefits, because some members are better off in the reformed schemes.

The other proposal set out in the consultation was called an ‘immediate choice’ which would allow members to choose which pension scheme benefits they would prefer to take for the period between 2015 and 2022 soon after the point at which schemes implemented the changes.

While this approach would have resolved the issue sooner and provided individuals with more certainty around pension benefits, it would have placed higher risk on the member. This is because they would be basing their choice around assumptions on their future careers, health, retirement and other factors, rather than the facts and known circumstances that will apply at the point of retirement. This would have meant that some members had ended up in a position whereby they would have been better off had they chosen the benefits of the alternative scheme, but would be unable to change their decision.

Members will receive a choice for the period between 2015 and 2022 because 1 April 2015 is the date when the reforms were introduced, and 31 March 2022 will be the point at which the legacy schemes will be closed to future accrual.

No, members do not need to submit a legal claim to receive any pension changes addressing the discrimination.

The government has committed to applying any changes across the main public service pension schemes and so both claimants and non-claimants who are eligible members will receive the pension changes.

Legislation is necessary to implement a deferred choice underpin in the schemes but the government is committed to ensuring that all eligible members are treated equally and are able to choose to receive pension scheme benefits from either scheme. Where necessary, payments will be backdated to 2015.

Provisions for the deferred choice will be implemented by 1 October 2023 for all members. Schemes may implement provisions for deferred choice earlier where it is possible to do so.

Where possible, schemes will also seek to offer a choice to members of the reformed schemes who retire before October 2023 before the legislation is implemented.


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