26 September 2023

UNITED KINGDOM: Unions in push for pension refunds

Start the conversation

United Kingdom Public Servants are to have their case to reduce pension contributions — which would potentially result in thousands of pounds in over-payments refunded — examined by the High Court in the New Year.

If unions are successful, members of the Civil Service Pension Scheme will have their contributions cut by two per cent.

Unions will argue that Ministers were wrong not to apply the reduction in 2019, so a win in the judicial review would likely result in the Treasury having to make good three years’ worth of over-payments.

The Public and Commercial Services (PCS), union said average losses for its members were in excess of £1,000 ($A1,795), but for some Public Servants the figure would be considerably higher.

The case is part of the fallout from 2018’s McCloud Judgment, which effectively declared elements of the Government’s 2015 public sector pensions reforms were illegal because they were found to discriminate against younger scheme members.

In early 2019, then Chief Secretary to the Treasury, Liz Truss controversially paused the routine valuations process for public sector pensions, which would have triggered the reduction of contribution rates under a mechanism built into the 2015 reforms.

At the time Ms Truss said the move was necessary because fixing the discrimination issues underscored in the McCloud case could cost up to £4 billion ($A7.1 billion) a year, making it impossible to get “clarity from valuations”.

The cost of fixing the discrimination highlighted by the McCloud case is now given as £17 billion ($A30.5 billion), but unions dispute plans for pension scheme members to fund the cost of the remedy.

They are demanding the downward revision of contributions and improvements that public sector pension scheme members were entitled to under the 2015 reforms, saying they should have been applied from 2019.

The PCS has confirmed the hearing will take place in the last week of January. The Treasury has refused to comment.

London, 4 December 2022

Start the conversation

Be among the first to get all the Public Sector and Defence news and views that matter.

Subscribe now and receive the latest news, delivered free to your inbox.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.