Pensions  

CMCs target civil servants for pension claims

CMCs target civil servants for pension claims

Members of the Local Government Pension Scheme who are affected by the McCloud discrimination judgment are “being actively encouraged” to lodge a claim against the government by claims management companies, it has emerged.

The warning was made by the Environment Agency Pension Fund in an update on its website in March, which stated such claims were unnecessary because civil servants affected by the case would automatically benefit from protections as a result of the judgment.

The scheme wrote: "Some claims companies are actively encouraging LGPS members to lodge an employment tribunal claim.

"These claims could be costly and are unnecessary because, if you’ve been affected by the McCloud judgement, you automatically benefit from any protection that’s provided as a result of this judgement; you don’t need to make an employment tribunal claim to secure your entitlement."

The claims relate to a dispute first brought by firefighters and judges in March 2015 – known as the McCloud and Sargeant cases – where judges found that by protecting older members from a downgrade to their defined benefit pension accrual, the government was discriminating against the younger ones based on age.

Similar claims have since been brought by teachers, police officers and doctors – all members of the new public sector career average revalued earnings schemes, in which similar age protections were implemented.

Transitional provisions took different forms, allowing older members to remain members of the old schemes, either until retirement or until the end of a period of tapered protection, depending on their age.

The difference in treatment will, in due course, be removed for all members with relevant service across all the main public service pension schemes – not just those who have lodged legal claims, the government noted.

Jeff Houston, board secretary for the LGPS advisory board, said: “The scheme advisory board is aware of claims being lodged in other public service pension schemes such as the Teachers [Pension Scheme], despite the government’s stated intent, (…) that all staff who qualify for the extended protections in all schemes – including those who left since the introduction of the new Care schemes – will receive them automatically.”

He added: “Entering into a claims process on behalf of a qualifying member is not only unnecessary, but also risks sharing any benefit they would automatically receive with a third party.”

Kirsty Bartlett, partner at Squire Patton Boggs, said given the government’s commitment to address the issue across all public sector pension schemes, it should be unnecessary for individual LGPS members to lodge claims.

However, she added: “This will depend on the detail of the changes, which are not yet known, and the time limits that apply to discrimination claims may mean that some individuals prefer to bring a protective claim.”

Ms Bartlett explained that technically, only employment tribunals can decide whether the benefits provided by a particular scheme are unlawfully age discriminatory.

In the judges’ and firefighters’ cases, the relevant tribunal will have to approve the government’s proposed remedy. In the remaining public sector pension funds, the government is looking to agree an appropriate remedy with the trade unions without further claims being brought.