Changes to firefighters’ pensions after age discrimination case will be applied to all public sector pensions
The government has confirmed that changes to firefighter’s pensions in 2015 that were ruled to be discriminatory will apply to all public sector schemes.
Under 2015 reforms, older workers in the fire service stayed in existing defined benefit (DB) contribution schemes while younger colleagues had to transfer to less generous pensions.
Last December, the Supreme Court ruled that these changes were discriminatory, and the firefighters were put back on the previous scheme.
In a written statement made yesterday, Treasury secretary Liz Truss said that the government will be engaging with the Employment Tribunal to agree how the discrimination will be remedied across the public sector.
This includes schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and fire and rescue workers.
Jon Greer, head of retirement policy at Quilter, says the government will want to move public sector workers onto the 2015 basis as soon as possible.
He says: “This needs to be worked through and means that the younger members are entitled to have their benefits 'levelled up' so that they are treated as having the same protection as the older members, until a non-discriminatory amendment can be made.”
He adds: “The cost to the government is significant since they will have to provide pre-2015 members with higher benefits for a longer period than expected and it’s not clear that the full cost has been factored into the £4 billion cost approximation or if indeed there will be an even bigger hole in the new Prime Minister’s pockets.”
In June, the Supreme Court denied the government an appeal and it was ordered to pay the costs of the case.
The government estimates December’s ruling could cost it around £4 billion a year.
Tamara Calvert, partner at law firm DLA Piper, says: “The government has said that the cost of this ruling could be £4 billion a year in additional liabilities, although unions contest that figure. Whatever the number, it is likely to be large.
“Certainly, there is a lot of work to do to unravel the changes and reknit them into a legally acceptable shape for the future.”
This article was originally published in our sister magazine Moneywise, which ceased publication in August 2020.
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