On the go: The Ministry of Justice has launched a consultation on creating a new public sector pension scheme for judges, which will address the issues caused by the McCloud judgment and allow the government to have a pensions-based solution for the whole judiciary.
In the document published on Friday, the MoJ stated that the new scheme — the Judicial Pension Scheme 2022 — will reform all the current judicial pensions arrangements and will be open to all eligible salaried and fee-paid judicial office holders from April next year.
Currently, judges contribute to one of three schemes: The New Judicial Pension Scheme, created in 2015 after the public-sector pensions reform, the Judicial Pensions and Retirement Act 1993 and the Fee-Paid Judicial Pension Scheme.
The creation of the new scheme follows the introduction of the public service pensions and judicial offices bill in the House of Lords on Monday, which was first announced in the Queen’s speech in May.
The MoJ is planning that all members of the older pension arrangements will transfer to the new pension fund, which will be the only scheme in which judges are able to accrue benefits since all others will be frozen to future accrual, the MoJ stated.
Nevertheless, all benefits previously accrued will be protected, including the preservation of the automatic lump sum and final salary link in respect of service in those schemes, the MoJ added.
The consultation sets out that the JPS 2022 will be a tax-unregistered scheme, meaning benefits accrued in the scheme do not count towards either the annual allowance or lifetime allowance limits. This is different from the NJPS, which is a registered scheme.
The new scheme will have a uniform contribution rate of 4.26 per cent, higher than previously. Due to this, the new rules will allow previous members to opt for a lower contribution rate of 3 per cent, for three years, in exchange for a commensurate reduction in their accrual rate to 2.42 from 2.5 per cent, the document stated.
Contrary to the legacy schemes, the JPS 2022 will not provide an automatic lump sum, and there is no limit on the number of years for which a judge can accrue pensionable service.
On retirement provision, the JPS 2022 will be more flexible, allowing for early, late and partial retirement.
Members will be allowed to draw their benefits before or after the scheme pension age, and if they do so their pension will be subject to either a reduction or an addition, respectively.
The new scheme will also allow judges to partially retire, by reducing their hours and taking all or some of the pension they have accrued in that office, while still continuing to work, the MoJ stated.
Similar to the reformed NJPS, the new scheme will have a scheme pension age linked to the member’s state pension age.
This is not the same as the mandatory retirement age: the upper age at which judicial office holders, including judges, are required to vacate office, and which will be raised to 75 from 70.
