On the go: The Department for Levelling Up, Housing and Communities is to consult on further regulations governing the application of the McCloud remedy to the Local Government Pension Scheme.
The DLUHC confirmed to the Local Government Pension Committee, in an update sent July 27, that “work continues on the steps to rectify the discrimination as it affects the LGPS in England and Wales”, with the government planning to publish its response to the 2020 consultation on amendments to the statutory underpin later this year, after which the LGPS Scheme Advisory Board will resume its McCloud implementation groups.
An updated version of the draft regulations implementing the remedy will be published alongside the consultation response, covering new powers relating to the statutory underpin, “as well as technical feedback we received at the 2020 consultation and any changes in policy”, the government said.
However, a further consultation will take place in 2023 “to ensure the updated draft regulations are accurate in light of the changes made”.
The government will also consult on “other aspects of the McCloud remedy which did not feature in our original consultation”, such as compensation and rates of interest, the update continued.
These new regulations are expected to come into force in October 2023, while a consultation will also take place covering new statutory guidance on McCloud implementation.
“This approach will ensure that the regulations, when made, will reflect all aspects of the remedy and have been appropriately scrutinised. We would encourage LGPS administrators to begin taking steps towards the implementation of McCloud remedy following the publication of the Government response, and will shortly be holding a meeting with software suppliers to discuss the implementation of the McCloud remedy to this timetable,” the DLUHC update said.
This process will cover England and Wales, while the Scottish Public Pensions Agency and the Department for Communities in Northern Ireland are expected to emulate the new regulations in both approach and timeframes.
Reforms made in 2015 to the judicial and firefighters’ pension schemes were found by the Court of Appeal in 2018 to have been unlawful on the basis of age discrimination.
This ruling, known as the McCloud judgment, impacted all main public service pension schemes, including the LGPS.
As a result, every member active in a scheme before the introduction of the career average revalued earnings scheme will be eligible for the higher of either their final salary benefits or the Care benefits accrued since these were introduced.
