The McCloud remedy for the NHS Pension Scheme has been pushed back to October 2023 on the back of Treasury delays in producing required documents.
The remedy project had been expected to deliver on cases during 2021-22 on behalf of members most affected by the discrimination identified by the McCloud ruling, but the release of the provision definition documents did not materialise.
“This has meant a replan of the McCloud remedy project with the current target go-live date now being October 2023, which is based on receipt of all outstanding documents from the Treasury by the June 2022 deadline,” the newly released NHS Pensions Scheme’s annual report for 2021-22 stated.
The expectation that the PDDs would be published in July led to regulatory changes being scheduled, but these are now expected to be laid in parliament in August 2023 on the back of a public consultation.
‘Little engagement work’ on remedy programme
Typically, schemes would produce PDDs individually, but the Treasury opted to provide oversight to their production owing to the risk that some provisions may be misinterpreted and to reduce the amount of duplicative work done by schemes.
The report stated there has been “little engagement work” on the remedy programme as a result of the delays.
Over the coming year, the remedy project will transition away from the preparatory phase to begin delivery preparations during 2022-23.
This will include the production of high-level business requirements, but these are set to be based on the suite of delayed PDDs, the report said. The purpose of these preparations is to ready system suppliers such as IT and support staff.
The “large amounts of outstanding clarification from HM Treasury” in relation to the “extensive need for system changes” regarding McCloud has meant that the NHS Pension Scheme has put on hold any major project looking at alternative employer services, postponing them until 2024 at the earliest.
In its place, support will be continued for the Pensions Online service to ensure that provision “continues to be fit for purpose in the short to medium term”.
This will include work on priority rejected ill-health cases alongside the development, testing and distribution of retrospective remedy systems.
“This could impact a wide range of members including deceased members [and] GPs retiring with enhanced protection, as well as those who have applied for ill-health retirement,” said MediFintech technical director Jack Needham, adding particularly those who have been declined ill-health retirement under 2015 scheme rules, but would be accepted under 1995 scheme rules.
“It seems unfair that some members might have to wait for their ill-health retirement to be paid due to government delays.”
The administrative burden of implementing McCloud solutions was laid bare last month by the Teachers’ Pension Scheme and Local Government Pension Scheme-administering authorities, with 18,000 teachers facing a choice on whether to lean towards legacy or post-reform pension benefits.
The Local Government Pensions Committee warned that the exercise would be “administratively challenging for both the TPS and LGPS-administering authorities”.