Defined Benefit 

Public schemes put aside £29.5bn after court case

Public schemes put aside £29.5bn after court case

Public sector schemes have made provisions of £29.5bn to cover costs associated with a recent court ruling.

A judgement handed down in December by the Court of Appeal determined changes made to judges' and firefighters' pensions in recent years were discriminatory.

In particular, the government had discriminated against a group of judges and firefighters on the grounds of age, race and equal pay in relation to their pension, the judgement read.

Elizabeth Truss, chief secretary to HM Treasury, revealed in January that this could cost around £4bn a year if extended to all applicable public service pension schemes.

However, the government has challenged the Court of Appeal’s decision, the OBR stated.

The £29.5bn figure was revealed today (March 13) in the 205-page long Office for Budget Responsibility economic and fiscal outlook.

Before April 1, 2015 the judges – with the firefighters in a similar situation - 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).

Transitional provisions were put in place, which allowed 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. 

But the latest ruling concluded the transitional protections were discriminatory towards those who could not stay.

FTAdviser reported yesterday (March 12) that doctors will also be filing age discrimination claims against the government, with identical arguments to the judges and firefighters in their case.

maria.espadinha@ft.com