Defined BenefitDec 13 2017

Government fights back over judges’ pensions

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Government fights back over judges’ pensions

The government has started its appeals against a group of judges who claim they have been discriminated against in the latest round of pension cuts.

The Lord Chancellor and and Secretary of State for Justice have appeared before the Employment Appeal Tribunal to argue changes made to judges’ pensions in 2015 were legitimate and did not lead to age discrimination.

It comes after a group of 210 judges won their case at the tribunal in November last year, when they argued transitional arrangements put in place between the old and new judges’ pension were discriminating against age.

Since women and ethnically diverse people in the judicial system tend to be younger, they also claimed there was indirect discrimination based on gender and race.

Max Winthrop, partner at Short Richardson & Forth and chairman of the Law Society employment law committee said that should the government win, the judges are expected to seek a judicial review.

Should the judges win, he said this could have potential repercussions for other public pension schemes.

“The wider context is if you have a defined benefit scheme and want to get rid of it you will have got to be cautious with how you go about transitioning between one scheme and the other.”

He said it was unlikely to affect private pension schemes which have more leverage to close their schemes and move people if they can prove they cannot afford to keep it open.

But it could potentially have implications on things like state pension age changes, if the detriment caused can not be justified and there is potential age, gender or race discrimination.

“The key phraseology will be whether or not they are achieving a legitimate aim through proportionate means,” Mr Winthrop said.

Before 1 April 2015 the judges were all members of the Judicial Pension Scheme (JPS), a defined benefit scheme established after the Judicial Pensions and Retirement Act 1993. 

This was closed on 31 March 2015 and serving judges were transferred into a replacement scheme, the New Judicial Pension Scheme (NJPS), which is less generous.

Transitional provisions were put in place, which allow older judges to remain members of the JPS, either until retirement or until the end of a period of tapered protection, dependent on their age. 

The claimants, some of whom have either already been transferred from the old scheme into the new one or are due to be transferred before February 2022 alleged the system meant they were discriminated against based on their age.

The government argued the way the system was set up was objectively justified.

But the tribunal judge ruled at the time the Lord Chancellor and Ministry of Justice had "failed to show their treatment of the claimants to be a proportionate means of achieving a legitimate aim".

The government's appeals hearing began on Monday 11 December, and is scheduled to last for up to four days with a decision expected in about four months’ time.

The appeals hearing was combined with the case of a group of 5,000 firefighters who are arguing against their own transitional pension arrangement.

Meanwhile the Women Against State Pension Inequality (Waspi) campaign group is already preparing a legal battle over changes to the retirement age for women born in the 1950s.

The first will be a judicial review challenge, or challenges, to the legality of the changes themselves.

The second would be "maladministration complaints" regarding the Department for Work and Pensions' alleged failure to communicate the changes properly. 

carmen.reichman@ft.com