Agenda item

To consider the report

Submitted – a report by the Pensions Manager updating the Board on the work being done in response to the McCloud court case. Members were reminded that when the public sector pension schemes had been reformed in 2014 and 2015, protections were introduced for older members to ensure that the amendments would not negatively affect their pensions. However, in December 2018, the Court of Appeal had ruled that some members had been discriminated against as the protections did not apply to them. Consequently, the Government had to provide protection to younger members which was equal to the basic protection provided to older members in order to remove the discrimination. Following a public consultation on the proposed changes, the final regulations came into force on 1 October 2023.

The work of removing the 'discrimination' was referred to as the McCloud Project and although accepting that this would be a major project for the Fund and its employers, with very little change to the value of members' benefits at the end of the project, this was an excellent opportunity to ensure that accurate and current data was recorded for the Pensions Dashboard.

By working alongside Hymans Robertson, it was reported that approximately 11,500 members of the Fund had been affected by the McCloud case and that some kind of review would need to be carried out on them. Following a request for information from 22 Fund employers (small and medium), it was reported that only five records required amending. It was reported that regular meetings were being held with the main employers to discuss the data that was needed and to track progress. It was stated that the work of recalculating the benefits of all scheme members who had left, and the payment of any underpayments or revision of pensions level moving forward, had begun, with all the deaths cases having been recalculated.

Although accepting that compliance with the requirements of the McCloud project created additional work for the Pensions Unit, it was noted that they were confident, with the employers' cooperation, that the work would be completed successfully, and that the ratification of the data would simplify the work in future years. It would also ensure high quality data so that members could view full and accurate data on the dashboard or My Pension Online.

Thanks were expressed for the report.

During the ensuing discussion, the following observations were noted:

·         This created a lot of additional work for the Pensions team

·         The team was thanked for its work – although the work was unlikely to bring benefits to many

·         They wished to see everyone cooperating, and for the Board to be informed if concerns arose

In response to a question regarding recalculation and whether consideration would be given to the legal annual allowance and lifelong allowance, it was noted that every case would be recalculated individually. If any compensation was required, the Fund would be liable to pay, not HMRC. In response to a supplementary question with regard to compensating those who had chosen the option of receiving a lump-sum, again it was noted that all cases would be considered individually.

RESOLVED to accept and note the information.