The Issue: Public sector pension reforms in 2015 introduced changes to how pensions were calculated, moving away from final salary schemes to career average schemes. However, these reforms had "protected" older members closer to retirement, allowing them to remain in the older, more generous schemes. Younger members were not given the same option.
The Ruling: In 2018, the Court of Appeal ruled that this difference in treatment amounted to unlawful age discrimination. This decision, known as the McCloud judgment, applied to various public sector pension schemes, including those for judges, firefighters, and ultimately, most other public sector workers, including members of the Armed Forces.
The Remedy: To address this discrimination, the government implemented the McCloud remedy. This allows affected pension scheme members to choose between their benefits under the reformed scheme and what they would have received under the older scheme for the period between 2015 and 2022.
Implications: The McCloud judgment and its remedy have significant financial implications for the government, as it involves potentially substantial back payments to affected members. It also raises questions about the fairness and sustainability of public sector pension schemes in the long term.
The background
The Ministry of Defence (MoD) has implemented their version of the remedy to that corrects the pension itself. This will give AFPS members the option of which implementation date they would prefer AFPS15 to apply to their own pension. They will be shown the full financial terms of either the original April 2015 or the later April 2022.
However, this doesn't take account of the fact that many service personnel will have submitted their notice and left service between the imposition of AFPS15 and before the McCloud judgement and remedy existed. These people resigned having been discriminated against based on age and with no knowledge that this would be remedied in the future. They therefore resigned with an incorrect understanding of their pension terms.
There is a process known as the Contingent Decision process which was created for these circumstances. This process requires the claimant to have written evidence that it was the pension that made them resign. We believe that this is an unreasonably high evidence threshold, and that all service personnel that resigned and left service in this time frame should receive compensation.
Most service personnel will not have had either the time, capacity, or energy to see and fight the injustice of the unlawful imposition of AFPS15 at the time. Their essential compliant nature and inclination to follow orders means that most will have accepted AFPS15 as just being 'the way things are and included it in their decision making process without fuss or fanfare.
We believe that the evidence threshold for providing compensation is too high, and that all service personnel that left service not knowing that they had been discriminated agains, and with no way of knowing that this would be remedied in the future should receive compensation.