Retirement calculator - McCloud legal ruling
GAD's pensions experts and digital specialists develop a 'retirement calculator' platform to help members of public service pension schemes.
Pensions experts in the Government Actuary’s Department (GAD) developed a ‘Retirement Calculator’ to help public service pension scheme members. We developed the platform following the McCloud legal ruling.
The judgment means that many public service pension scheme members will have to make a choice between the benefits provided by 2 different schemes for the period 2015 to 2022.
The choice is between legacy schemes (typically final salary schemes) and reformed schemes (typically career average revalued earnings schemes). This is now commonly known as the 2015 remedy.
2015 remedy (transitional protection)
Most public service pension schemes reformed in April 2015 (2014 for the local government scheme in England and Wales). From this date most staff joined the new reformed schemes.
People closest to retirement were protected from the impact of the reforms. Those protections were later ruled to be age discriminatory. As a result, the affected public service pension schemes are implementing ways to remedy this age discrimination.
The government has laid primary legislation to implement the remedy, however each scheme needs to issue further regulations containing details of how it will apply in that scheme.
How it works
GAD’s ‘retirement calculator’ helps scheme members eligible for the 2015 remedy understand in general terms which scheme might be better for them. It provides an illustration of the benefits scheme members could receive under the legacy and reformed schemes, under a range of assumptions.
It then allows members to compare these benefits using different retirement options, such as early or late retirement, or exchanging pension for a cash lump sum.
In this way scheme members can explore the retirement options most relevant to them in a neat visual illustration based on their own membership data before they need to make a formal decision.
To provide members with the best possible experience, developers at GAD created the retirement calculator in Python combined with modern web software, allowing us to provide complex numerical information in a simple graphical format allows members to immediately visualise the impact of their choices.
Image depicts illustration of retirement calculator. It shows user options for retirement age, whether results are adjusted for inflation and level of lump sum chosen.
Collaborating with clients
The GAD team has further developed the retirement calculator to seamlessly link it to stored member data saving the member manually inputting their details.
A bespoke platform will allow members to access all communications relating to their McCloud decision, through a single login. They can then efficiently explore if the best outcome for them is impacted by their assumptions or choices for retirement.
Furthermore, GAD continues to support our public service pension scheme clients by developing other calculators for clients not affected by remedy.