On the go: The Treasury accepted that its 2015 public sector pension reforms were unlawful on Monday, with the court judgment likely to cost the department £4bn a year and restrict the next chancellor’s spending.
In December last year, the Court of Appeal ruled that government protections for older firefighters and judges discriminated against younger workers who were transferred to less beneficial schemes, a decision the government was prohibited from appealing by the Supreme Court last month.
Elizabeth Truss, chief secretary to the Treasury, said in a written statement on Monday: “The government respects the Court’s decision and will engage fully with the Employment Tribunal to agree how the discrimination will be remedied.”
She added: “Continuing to resist the full implications of the judgement in Court would only add to the uncertainty experienced by members.”
The judgment concerned the Firefighters' Pension Scheme, but the ruling has wider implications, affecting schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and rescue workers.
Continuing to resist the full implications of the judgement in Court would only add to the uncertainty experienced by members
Liz Truss, chief secretary to the Treasury
Ms Truss said: “Initial estimates suggest remedying the discrimination will add around £4bn per annum to scheme liabilities from [April] 2015.”
The reimbursements will further dent public finances at a time when Chancellor Philip Hammond has already put aside £26.6bn for a 'Brexit war chest'.
Ms Truss said the Treasury’s goal to secure sustainable pensions remained: “The judgment does not alter the government’s commitment to ensuring that the cost of public service pensions are affordable for taxpayers and sustainable for the long term.”
