How the public service pensions remedy affects your pension
If you’re a member of a public service pensions scheme, find out how the pension remedy (also known as McCloud) could have affected you.
This collection brings together all of the relevant guides for pension scheme members who were impacted by the public service pensions remedy.
The public service pensions remedy is a solution to address the discrimination that occurred in the public service pensions reforms from 2014. It involved making changes to the pensionable service of public service pension members over the ‘remedy period’. The purpose of the remedy is to make sure that members are in the same tax position they would have been in if the discrimination had not happened.
You may be affected by the remedy if you were a member of a public service pension scheme before 1 April 2012 and continued to be in service after the start of the remedy period for your scheme.
How you may be impacted and the action you may need to take is different depending on the type of pension scheme you are a member of:
- Chapter 1 schemes — any public service pension schemes other than schemes for judges or local government employees
- Chapter 2 schemes — judicial pension schemes
- Chapter 3 schemes — local government pension schemes
When the remedy period is
For most schemes, the remedy period is 1 April 2015 to 31 March 2022.
The remedy period is split into 2 separate periods known as the:
- compensation period, which covers the tax years 2015 to 2016 up to and including the tax year 2018 to 2019
- public service pensions remedy tax administration framework period, which covers the tax years 2019 to 2020 up to and including the tax year 2022 to 2023
Local government schemes in England and Wales
For local government schemes in England and Wales, the remedy period is 1 April 2014 to 31 March 2022.
The remedy period is split into 2 separate periods known as the:
- compensation period, which covers the tax years 2014 to 2015 up to and including the tax year 2018 to 2019
- public service pensions remedy tax administration framework period, which covers the tax years 2019 to 2020 up to and including the tax year 2022 to 2023
Agency schemes
For agency schemes, the remedy period is 1 April 2016 to 31 March 2022. The remedy period is split into 2 separate periods known as the:
- compensation period, which covers the tax years 2016 to 2017 up to and including the tax year 2018 to 2019
- public service pensions remedy tax administration framework period, which covers the tax years 2019 to 2020 up to and including the tax year 2022 to 2023
How members are affected
If you are affected by the remedy, you are defined based upon how you were treated during the remedy period. You are either an protected member, taper protected member, or an unprotected member.
Protected member
You’re a protected member if you are a:
- Chapter 1 or Chapter 2 member who remained in the legacy scheme for all of the remedy period
- Chapter 3 member who would have been entitled to the final salary underpin when you started taking your benefits
Taper-protected member
You’re a taper protected member if you are a Chapter 1 or Chapter 2 member who remained in the legacy scheme for part of the remedy period. However, you would have moved to a reformed scheme before 1 April 2022.
Unprotected member
You’re an unprotected member if from 1 April 2015:
- you are a Chapter 1 member, who started to build up pension rights under a new scheme
- you are a Chapter 2 member, who started to build up pension rights under a 2015 scheme
- you are a Chapter 3 member who would not have been entitled to the final salary underpin when you started taking your benefits
Member status treatment from 30 September 2023
You are also treated differently depending on your status in a public service pension scheme as of 30 September 2023.
Active member
You were still building up pension benefits in your public service pension scheme. Also, you have not yet started taking any of your pension benefits.
Deferred member
You were no longer building up pension benefits in your public service pension scheme. Also, you have not yet started taking any pension benefits.
Pensioner member
You had started taking your pension benefits.
Deceased member
A person that has died and their pension will be given as benefits or a lump sum to a beneficiary. Only a legal personal representative will have the authority to act on behalf of a deceased member.
Chapter 1 guidance — pension members who are not judicial or local government members
Chapter 2 guidance — judicial scheme members
Chapter 3 guidance — local government scheme members
Changes in your annual allowance
Changes to your benefits as a result of the remedy may mean your annual allowance tax position has changed. Check if a previous annual allowance charge can be reduced, or if a new or increased charge may be due.
Changes in your pension lifetime allowance
If you have had a benefit crystallisation event during the remedy period, your lifetime allowance tax position may have changed. Check if a previous lifetime allowance charge can be reduced, or if a new or increased charge may be due.
How unauthorised payments are affected
If you paid an unauthorised payment charge or an unauthorised payment surcharge during the remedy period, your change in benefits may affect this.
Tax agents guidance
If you are a tax agent, find out how to check your client’s tax position if they’ve been affected by the remedy.