The government has launched two further consultations on plans to enact the second phase of the McCloud/Sargeant case remedy, with the latest consultations focusing on the Armed Forces Pension Scheme (AFPS) and the Civil Service Pension Scheme.

After the Public Service Pensions and Judicial Offices Act 2022 provided a framework to allow public service pension schemes to remedy the impact of unlawful age discrimination, the latest round of consultations is seeking views on plans for second part of the remedy.

The Cabinet Office launched the consultation on plans to amend the Civil Service Pension Scheme regulations to implement the retrospective aspects of the remedy, whilst the Ministry of Defence launched a consultation in relation to the AFPS rules.

This also follows the launch of two similar consultations, in relation to firefighters’ pensions and police pensions, by the Home Office last week.

The second retrospective phase aims to remedy the discrimination that had taken place between 1 April 2015 and 31 March 2022, and is expected to be delivered through a
mixture of amendments to the various scheme rules, supporting policies and tax legislation.

In particular, the government plans to amend scheme rules to remove the effect of the transitional protections seen between 1 April 2015 and 31 March 2022, the remedy period, and implement provisions for a deferred choice underpin (DCU).

The DCU will give members a deferred choice of pension benefits at their point of retirement for the remedy period, which is the period during which discrimination took place.

Under the remedy, eligible members will be able to choose to receive legacy pension scheme benefits or benefits equivalent to those available under the 2015 reformed scheme for service during the period 1 April 2015 to 31 March 2022.

Retrospective changes to regulations will also be made to correct any overpayment or underpayment of pension benefits or member contributions, including benefits or contributions paid to or by a member because of their choice.

In addition to this, the regulations will facilitate the payment of appropriate compensation to address financial loss arising from the discrimination or operation of the remedy.

The legislation required to amend the scheme rules is expected to be laid before parliament in "early September 2023", according to the AFPS consultation, with the retrospective remedy itself expected to come into effect from 1 October 2023.

Plans for the remedy were initially announced after a 2018 High Court ruling found that the 2015 changes to public sector schemes were discriminatory on the grounds of age.

However, although the government previously the retrospective remedy as the "final phase" of removing this discrimination, the government is also currently facing a judicial review over its proposed method of paying for costs incurred by the McCloud judgment.

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