Police officers warn of age discrimination in McCloud remedy

The six police officers from across the UK – representing the Pension Challenge/Cops Against campaigning group – argued in a response to the McCloud remedy consultation paper that the government’s chosen approach could have a negative effect on members of the police pension schemes.

As a result of the 2015 public sector pension schemes reforms, members within 10 years of their retirement were allowed to remain members of their legacy final salary pension scheme, while everyone else was moved into the new career average revalued earnings schemes. In 2018, the Court of Appeal found that this was unlawful discrimination against younger workers.

In a consultation paper published in July, which is open for responses and comments until October 11 2020, the government proposed allowing affected scheme members to remain with their current scheme until March 31 2022, effectively unwinding the switch to a Care scheme implemented in 2015 for a certain period.

“[The] proposed remedy clearly does not take into account the hugely detrimental financial impact transferring to the Care scheme pension in 2022 will have on the vast majority of serving police officers, or satisfactorily considers the nuances of police pensions,” the police officers said.

The government proposals removed discrimination involved in “transitional protections”, they said, but failed to remove the risk of unfair treatment of police officers “within the wider transitionary arrangements”.

The officers argued that, in some circumstances, the suggested remedies for the 1987 police scheme and the 2006 scheme would “actively work against each other”.

Police pensions also bore a “disproportionate burden” of the changes proposed “in comparison to other public sector schemes”, they said.

Lawful discrimination?

At the centre of the police officers’ argument is the concept of lawful age discrimination. The paper acknowledges that some age discrimination is inevitable and lawful “if it is used as a proportionate means to achieve a legitimate aim”.

However, the 2015 switch to a Care scheme created inequalities between age groups, they argued. The government and police federations, which were part of discussions over the 2015 changes, had argued that protecting older officers and those close to retirement from the switch “were a proportionate means to achieve a legitimate aim”.

“Justifiable age discrimination will always be somewhat subjective, and we don’t disagree there was at least a moral case for protecting older officers,” the six police officers wrote.

“However, the court rightly held it was not sufficient justification for age discrimination. The age discrimination within this proposed remedy exactly mirrors the unlawful age discrimination within the transitional protections, and in many ways is more objectively clear as it lacks even the veneer of justification that was present in the transitional protections case.”

The paper cited the “true life” examples of two officers who joined the 1987 scheme in 1996, one aged 19 and the other aged 25.

If these two officers were to move to the Care scheme in 2022, as proposed by the government’s consultation paper, and they retired after 30 years’ service as per the scheme’s rules, the older officer would be able to draw their 2015 Care pension immediately. However, the younger officer would have to wait another six years until age 55 to draw their benefits.

In addition, the older officer would see their pension actuarially reduced by 22 per cent, while the younger officer’s benefit would be reduced by 50 per cent, the paper claimed.

The changes would make the younger officer “significantly worse off” for the rest of their life “despite making exactly the same pension contributions, over exactly the same period of time”.

The officers stated that their example – as well as another from the 2006 scheme – showed that it was “simply not true that by working longer younger officers receive a ‘bigger pension’”, as suggested by the government’s approach.

Policing the changes

While the Pension Challenge team agreed with the broad need for change to public sector schemes, it called for specific measures to be introduced for police officers to ensure that those who had saved into the 1987 or 2006 schemes were not left worse off.

The response called for all officers who withdrew from existing schemes as part of the 2015 changes — deemed unlawful in the 2018 McCloud ruling — to be “allowed to re-enter their original scheme without penalty”. A repayment mechanism should be introduced as “a blanket offer to officers who chose to leave their original scheme”.

The Treasury has been approached for comment.

The Police Federation said last month that it was “working closely with other UK staff associations to form a cohesive, detailed response” to the consultation. Its central position is that officers should be allowed to remain a member of the scheme they initially joined “if this is to their benefit”.

The Pension Challenge/Cops Against group was set up in 2015 to raise awareness of, and campaign against, the changes to the police service pension schemes.

The Treasury has estimated that the changes would affect as many as 3m people across the public sector and could cost £17bn.

At the time the consultation was published, trade union Prospect welcomed members being granted the choice of benefits and a commitment from the government not to cut benefits to save costs.

Deputy general secretary Garry Graham added that it was “hard to see a situation where any remedy can be fair” if it did not offer an informed choice, clarity on tax implications, and a rectification for all those disadvantaged by the 2015 changes.