On the go: Pension schemes may weigh up whether it is appropriate to offer a remedy to members suffering “immediate detriment” from the McCloud ruling, the Pensions Ombudsman has said.
In December 2018, the Court of Appeal ruled in the McCloud case that the transitional protection afforded to older members in 2015 under the introduction of career average revalued earnings in the public sector constituted unlawful age discrimination.
In a fact sheet published on July 20, the ombudsman urged schemes to communicate with members over the steps they are taking in response to McCloud.
“Schemes may review and decide (taking appropriate advice) whether it is practicable for a remedy to be made available earlier for those members that may suffer immediate detriment,” it said.
“Schemes should contact TPO, for example, if they receive a large number of similar or grouped complaints, and they think there is a reasonable chance those complaints will be referred to TPO.”
The government had originally accepted that the police and firefighters’ schemes could, according to the Equality Act 2010, address discrimination in some immediate detriment cases.
This guidance was then withdrawn regarding “major practical issues” — particularly concerning tax — in dealing with immediate detriment cases ahead of the remedy’s rollout.
“Individual schemes will need to decide how to address immediate detriment cases,” the ombudsman said, recognising that individual police forces and fire and rescue authorities are responsible for their schemes.
An agreement was reached between the Fire Brigades Union and the Local Government Association in October 2021, which the FBU said allowed for members’ cases to be dealt with now without waiting until October 2023, when legislation intended to address the issue is expected to arrive.
In May, however, the Staffordshire Fire and Rescue Service stopped making immediate detriment payments to members of the Firefighters’ Pension Scheme affected by the McCloud ruling after coming under pressure from the government.
“In most cases, members will not be adversely affected financially such as would require immediate action,” the ombudsman said.
It added that it would not investigate complaints or disputes linked to remedying age discrimination in public sector schemes, “but it will carefully look at the facts of each case before making any decision”.
The FBU told members on June 6 that it was preparing legal action after its head office anonymously received a letter sent to all chief fire officers by the National Fire Chiefs Council, advising against applying immediate detriment before the legislation is implemented next year.
FBU national officer Mark Rowe told Pensions Expert: "The Fire Brigades Union are pleased that the Pensions Ombudsman confirms that they may investigate where a member is suffering severe financial hardship or other serious injustice and the scheme is not putting in place interim arrangements to address the injustice within a reasonable period.
"The Pensions Ombudsman describes exactly the situations that a lot of our members currently find themselves in with Fire and Rescue Authorities refusing to pay them the pensions that they have been instructed to pay by the court."
