Firefighters threaten legal action over McCloud costs

Firefighters threaten legal action over McCloud costs

The government is braced for more McCloud drama after the Fire Brigades Union published a letter threatening legal action to stop the cost of the remedy falling on members.

The government has admitted that members will be expected to foot the bill for the McCloud remedy once the 2016 public sector scheme valuations are completed.

The McCloud remedy removes age discrimination across public sector schemes, following reforms in 2015 which had initially allowed older members to stay in the existing schemes while newer ones were moved to the new schemes.

This process is estimated to cost some £2.5bn per year to put right, or £17bn in total across schemes. 

The government has told the Public Accounts Committee it does not want "members to be in a worse position than they would have been prior to the McCloud remedy being implemented" but it added costs would be borne by the members themselves. 

Now, the FBU has sent a formal letter before a claim for judicial review against the government’s decision, arguing its members will be asked to foot the cost for the unlawful discrimination introduced into their pension scheme by the government.

“The government has said that it will try to impose the cost of the discrimination onto those who are now on that 2015 pension scheme – a large number of whom will have been those who were discriminated against,” it explained.

FBU national officer Mark Rowe said: “It is unbelievable that the government is trying to make firefighters pay for their own discrimination, and unbelievable that it is forcing firefighters to come back to the courts time and time again to try and win pension justice.

“The government needs to get a grip, recognise its mistakes, recognise the highly valuable contribution that firefighters make every day, and sort out firefighter pensions in a timely and straightforward manner. Six years after the relevant pension reforms came in, the government is still in a mess over this.”

He continued: “The government is trying to make these firefighters pay via a scheme in their pensions called 'cost control'.

“It was the government who introduced the cost control mechanism into the new pension scheme. The mechanism provided that savings from the new scheme should be passed on to those scheme members. The government now wish to ignore the legislation that made that provision, legislation that they introduced.”

Rowe said cost control adjusts pension contributions or benefits if the actual cost of the pension scheme diverges from the target cost of the pension scheme by 2 per cent or more, with firefighters losing out if the actual cost is higher.

The Treasury and Secretary of State have been asked to provide a response by November 19.

A government spokesperson said: “We cannot comment on ongoing litigation.”

Benjamin Mercer is a reporter at FTAdviser's sister publication Pensions Expert