What is the McCloud judgement and how does it affect you?

In 2015 the government reformed most public service pension schemes, including the NHS Pension Scheme. Those NHS Pension Scheme members who were affected, younger members, moved from the 1995 Section or 2008 Section to the new 2015 Scheme on or after 1 April 2015.

These reforms did not apply to those (fully protected) older members who were closest to their retirement age. They were allowed to remain in the 1995 Section or 2008 Section until their retirement.

In December 2018, the Court of Appeal found these protections to be discriminatory against younger members of public sector pension schemes. This has become known as the McCloud judgment. The government has now announced a remedy to remove this discrimination and ensure equal treatment going forward.

This will look at the period from the 1 April 2015 to the 31 March 2022 and will be dependent on your actual membership during this timeframe. This has become known as the Remedy Period.

What we know already is summarised below.

• The changes only apply to NHS workers who joined the NHS Pension Scheme on or before 31 March 2012 and were still a member on or after 1 April 2015
• A member who transitioned from the 1995 or 2008 Section to the new 2015 Scheme between 1 April 2015 and 31 March 2022 will be given a choice at retirement or other pension event. It is likely that NHSBSA/NHS Pensions will calculate if it was more beneficial for them to remain in the 1995 or 2008 Sections between 1 April 2015 and 31 March 2022 or to transition to the 2015 Scheme on 1 April 2015. Automatically moving everyone back into the 1995 or 2008 Section without giving them a choice would leave some worse off because some members may find they’re better off with 2015 Scheme benefits.
• Anyone who retired on or after 1 April 2015, and already in receipt of their NHS pension, and affected by the McCloud judgement, will have their pension reviewed but we do not expect this to happen before October 2023
• We expect that anyone affected by the ‘McCloud judgement’ who transitioned to the 2015 Scheme and unsuccessfully applied for the NHS in service ill-health pension will have that decision to reject the application reviewed
• On 1 April 2022 every active member of the NHS Pension Scheme will join the 2015 Scheme regardless of their age. NHS pension benefits they have accrued up to that date are protected

There is still a great deal that we do not know but we will keep you informed.

You can also access the NHSBSA/NHS Pension’s website (NHS Pensions | NHSBSA) for more information.