What is Remedy?

In 2015, the government introduced new laws which resulted in a new pension scheme for firefighters - the Firefighters' Pension Scheme 2015 (FPS 2015). These laws included protections which meant that some members of the existing schemes (FPS 1992 and FPS 2006) didn't join FPS 2015 either straight away or at all, depending on their age. Following a legal challenge known as Sargeant, the courts determined that the protections given to members were age discriminatory.

On 15 July 2019, the government made a written statement [HCWS1725] accepting the court’s decision. They confirmed that they would engage with the Employment Tribunal to agree how to fix the discrimination. The written statement confirmed that this fix, or remedy, would apply across all public sector schemes.

‘Remedy’ is the term used for these pension scheme changes.

It can also be referred to as ‘McCloud’, which is after the Judges McCloud judgement. Which is commonly used by other Public Sector Schemes, such as NHS, Teachers and Local Government.

‘Sargeant’, which is after the Firefighters’ Sargeant judgement.

‘Age Discrimination Remedy’, as both cases related to age discrimination, and how this would be remedied (i.e. put right).

What is the remedy period?

'The Remedy period’ is the period from 1 April 2015 to 31 March 2022.

What legislation has been introduced?

To enable these changes to be made, new legislation and powers were needed.

The Public Service Pensions and Judicial Offices Act 2022 (PSPJOA) came into force on 1 April 2022, which provided overarching legislation. The PSPJOA also provides for HM Treasury (HMT) to make Treasury Directions, which specify how certain powers under the PSPJOA are to be used in Public Service Pension Schemes when making their scheme regulations.

The Police and Firefighters’ Pension Scheme (Amendment) regulations 2022, were consulted on between November 2021 to January 2022. Government responded to the consultation in March 2022, when the regulations were laid, and came into force on 1 April 2022.

The Firefighters Pension Scheme (Remediable Service) regulations 2023 were consulted on during February to May 2023 and government responded to the consultation in July 2023, when the regulations were laid and came into force on 1 October 2023.

These regulations address the discrimination in two parts Future discrimination (Prospective) and past discrimination (retrospective), which is covered further down.

To allow for the tax implications of remedy to be rectified, through the powers in the Finance Act 2022, two sets of regulations have been consulted on and published.

Tax (No 1) The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023 (legislation.gov.uk)

Tax (No 2)The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) (No. 2) Regulations 2023 (legislation.gov.uk)

 Future discrimination (prospective)

  • The changes to remove future discrimination were brought into force on 1 April 2022.
  • To remove future discrimination from the scheme and ensure equal treatment, all remaining protected members who were not current members of FPS 2015 transferred into this scheme on 1 April 2022.
  • This means that all future service from 1 April 2022 for all members accrues (builds up) in the FPS 2015. Benefits already accrued in either of the previous schemes (FPS 1992, FPS 2006, FPS 2006 Special Members) are fully protected.

Past discrimination (retrospective)

  • The changes to remove past discrimination will come into force on 1 October 2023.
  • Members who moved into FPS 2015 within the remedy period will have their benefits converted to their legacy final salary scheme (either FPS 1992 or FPS 2006) for the whole of their service in the remedy period. This is known as roll back. The benefits built up in FPS 2015 will be kept as a reformed FPS 2015 ‘underpinned’ record.

Active and Deferred Members

  • All members will receive a combined Annual Benefit Statement/Remediable Service Statement (ABS/RSS) by 1 April 2025; however, where possible this will be included by 31 August 2024. The ABS/RSS will provide members with the current value of both their legacy final salary benefits and their reformed FPS 2015 benefits for the remedy period as well as projected benefits to normal pension age for active members.
  • All members who retire from 1 October 2023 will be provided with an RSS at retirement. The RSS will illustrate their options to choose to receive either their legacy final salary benefits or  reformed FPS 2015 benefits for the remedy period. This is known as Deferred Choice Underpin (DCU). It is important to note, that there are a number of factors that may impact when the RSS may be sent to a member at retirement, i.e. period of notice given to the pensions administrator of their retirement, data from an employer and whether any calculations may need to carried out manually.
  • A member remedy video is available to help explain the remedy process 

Pensioner Members

  • Pensioner members that have retired before 30 September 2023 and have service within the remedy period, will be provided with an RSS as soon as reasonably practicable from 1 October 2023. This is known as Immediate Choice (IC).
  • It is important to note that the regulations allow 18 months for pension administrators to complete the remedy exercise (i.e. until March 2025). Administrators will be prioritising certain categories of pensioner members, based upon the level of impact of remedy to their benefits.
  • Pensioner members should receive a tailored communication from either their Fire and Rescue Authority (FRA) or pensions administrator confirming the timetable that they will fall into.

The indicative timetable for sending out an RSS to pensioner members is as follows:

Pensioner Member

Indicative timetable to receive RSS

Ill Health Pensioner

October 2023 to March 2024

Beneficiaries (ill health, taper protected and unprotected)

October 2023 to May 2024

Taper Protected Pensioner

October 2023 to November 2024

Unprotected Pensioner

October 2023 to November 2024

Protected Pensioner (2006 Scheme)

May 2024 to January 2025

Beneficiaries (Protected members 1992 and 2006 Scheme)

August 2024 to March 2025

Protected Pensioner (1992 Scheme)

October 2024 to March 2025

A pensioner member remedy video is available to help explain the process 

A video tilted “Understanding your Remediable Service Statement” will be available shortly. 

Immediate detriment pensioner members

If you retired before 30 September 2022 under immediate detriment, your pensions administrator will need to review your retirement benefits to ensure that the contributions, tax and interest has been paid correctly as defined by the regulations now that they are in place.

You will not be provided with a remediable service statement, as you are not permitted to change your decision. You will however be contacted by April 2025 to confirm whether there are any adjustments required to your contributions, tax or interest payable.

 

 

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