“The McCloud age-discrimination judgment certainly threw a spanner into the works of public service pension reform. Today’s announcement confirms that seven years of reform have been lost: new schemes put into place in 2015 will not now become effective until 2022.
“Today’s consultation, which is all about choice, puts 3 million public service pension scheme members in doubt about what their pension benefits will be and when they will be able to decide. Choice is good but clear information and guidance is needed to make sure good decisions are made and these generous benefits are valued and understood. The difference could run into thousands of pounds of pension a year for some. In terms of who will benefit, doctors are likely to benefit the most. This could mean additional annual allowance tax bills, but adding more confusion to doctors’ pensions is unlikely to curry much political favour during a pandemic.
"The government has estimated reform costs at £4bn a year and stated that this should be met by the members. And although the delay is designed to take away age discrimination, it is still the case that the cost of these extra benefits for older and current members will be met by younger and future members. The government is standing behind the reformed schemes, but it has also left the door open to further reform. In order for these scheme to be fair, their value should be understood and, as Lord Hutton suggested, form part of public service pay consideration overall.”
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