Consultation outcome

Amendments to the Local Government Pension Scheme statutory underpin: government response

Updated 6 April 2023

Executive summary

In April 2014, the Local Government Pension Scheme in England and Wales (LGPS) was reformed as part of a wider project by the government to review and reform the pensions terms of public sector workers. In the 20 years prior to the reforms, the cost of public service pension schemes like the LGPS had significantly increased, with most of the increased costs falling on the taxpayer.

The reforms were intended to ensure greater fairness between lower and higher earners, and the future sustainability and affordability of the scheme. The introduction of the new LGPS with a career average design, an increased normal pension age linked to a member’s state pension age and the introduction of a cost control mechanism, were important steps to protect against unsustainable increases in cost. These changes were also progressive, providing greater benefits to some lower paid workers.

As part of the reforms, and following negotiations with member representatives, transitional protections were provided to members closest to retirement to provide those members with greater certainty. Transitional protection was challenged by younger members of the firefighters and judicial pension schemes and, in 2018, the Court of Appeal held, in the case known as ‘McCloud’, that the arrangements gave rise to unlawful discrimination in those schemes. Following the judgment, the government accepted that the Court’s judgment had implications for all public service pension schemes which included similar transitional protections, including the LGPS.

Addressing the discrimination

In summer 2020, the Department commenced a consultation on the changes it proposed to make to the LGPS to address the discrimination found in the McCloud judgment. Principally, it was proposed that ‘the statutory underpin’, the mechanism through which older LGPS members closest to retirement were protected, should be extended to the scheme members who were discriminated against (i.e. those too young to receive protection under the original rules). All active LGPS members had moved into the reformed scheme in April 2014, but for protected members the statutory underpin meant that if their pension would have been higher in the final salary scheme, an addition would be payable to make up the shortfall. Effectively, the underpin was designed to provide that protected members would receive the best of both schemes for their own personal situation.

The department received 96 responses to the consultation from a variety of stakeholders, including from LGPS administering authorities, trade unions, scheme employers, individual LGPS members and scheme advisers. This document describes the responses in more detail, including topics where there was disagreement with what we had set out. However, a significant majority were in favour of the core proposal that the discrimination is addressed by extending the underpin to younger members to remove the unlawful difference in treatment found by the courts.

Following consideration of the responses, the government decided to proceed with the extension of underpin protection to younger qualifying members in 2021. We considered this to be the simplest and fairest way of addressing the McCloud discrimination. We published a written ministerial statement on 13 May 2021 confirming our plans^{[footnote 1]} as well as our intent to pursue primary legislation to implement the changes.

Remedy in the LGPS

In this document, we describe the remedy to the discrimination in more detail. At a high-level, the approach that will apply is as follows.

The underpin period, the period over which the ‘best of both’ protection will apply, will run from 1 April 2014 to 31 March 2022, or to a member’s final salary normal pension age, usually 65, if that is earlier than 31 March 2022.

To ensure the underpin applies fairly between different types of member, the government is expanding the qualifying criteria to members who had career breaks. As a result, underpin protection will apply to those who were in active service on or before 31 March 2012, and had membership of the career average scheme without a gap in service of five years or more. The government is considering whether members will be required to meet the underpin qualifying criteria in a ‘single scheme membership’ – a single pensions record, including any previous service aggregated or transferred for the purpose of calculating benefits. We will consult again on this.

As with the original underpin, the remedy will not require qualifying members to make a choice between their final salary and career average benefits over the underpin period. Instead, administrators will compare members’ benefits over this period and if a member’s pension would have been higher in the final salary scheme, an addition would be payable to make up the shortfall. Additionally, LGPS members can take their benefits from the scheme in a range of ways and our regulations will ensure underpin protection is appropriately considered in those calculations – including where members transfer out, retire on ill-health grounds, receive a redundancy pension or commute their benefits for a cash payment (where the pension meets trivial or small pot qualifying criteria). The underpin will also be taken into account in determining the amount of survivor benefits payable where a qualifying member dies.

Implementing the changes

Last year, the Public Service Pensions and Judicial Offices Act 2022 achieved Royal Assent, providing the legislation which will allow the government to provide McCloud remedy to affected members. The Act includes detailed provisions which apply to local government, giving the government powers to make scheme regulations that provide for the remedy we describe here. These scheme regulations will be made later this year and be applied retrospectively to 1 April 2014, ensuring a single set of rules governing the underpin applies to members who were originally protected and those who are in scope of the McCloud remedy. We will undertake a further period of consultation on the remedy in the coming months to seek views on draft regulations and on isolated issues relating to the McCloud remedy. The government intends that the final regulations will come into force on 1 October 2023.

The administration of pension schemes in 2023 is complex and requires good governance, excellent systems and, at its core, a well-resourced, well-trained administration function. The LGPS benefits from dedicated administrators across England and Wales who ensure that, in the vast majority of cases, pensions are paid accurately and on time. However, the implementation of the McCloud remedy presents a series of challenges for administrators, and it is important that detailed planning and preparation is undertaken to prepare for the changes. A lot of work is already underway, and the government will continue to work closely with the sector and the Scheme Advisory Board to identify the steps that can be taken centrally to support the implementation of remedy at the local level. The government encourages those responsible for the running of administering authorities to ensure they have sufficient resourcing plans in place.

Future pension provision

The government remains committed to the sustainability and affordability of public service pension schemes. It considers that the reformed LGPS which was introduced in April 2014 meets these objectives, whilst providing members with some of the most generous pensions available in the UK – giving workers index-linked benefits and the security of a pension that is calculated in relation to their length of service and their pay. Since 1 April 2022, all LGPS membership has built up in the career average scheme without underpin protection. The removal of the McCloud discrimination is an important step towards the government achieving the savings originally forecast through public service pensions reform, and the government is grateful for the detailed and constructive engagement we have had with stakeholders on this matter as we look to finalise legislation.

Background

Public Sector Pension Reform

1. In April 2014 and 2015 the government introduced reformed public service pension schemes following a structural review by the Independent Public Service Pension Commission (IPSPC)^{[footnote 2]}, chaired by Lord Hutton of Furness. The final report set out a framework for comprehensive reform of public service pensions seeking to balance concerns relating to taxpayer costs with maintaining good levels of retirement income for public service workers. Reforms were implemented in the LGPS in England and Wales^{[footnote 3]} from 1 April 2014 and in other main public service pensions schemes from 1 April 2015.

2. In the LGPS, the main reform package consisted of:

• A move to future benefit accrual based on a member’s pay throughout their career (a ‘career average’ structure)
• A move from a normal pension age of 65 to a normal pension age linked to a member’s State Pension age
• A move from a 1/60th accrual rate to a 1/49th accrual rate
• Revisions to employee contribution bandings
• The introduction of a 50/50 section, giving members flexibility to pay half the contributions for half the pension accrual while retaining full life cover and ill-health cover

3. The package was designed to achieve the government’s aims in making the LGPS more sustainable, affordable and fairer in the long term.

Transitional protection and legal challenges

4. Amongst the changes made to public service pensions and following negotiations with trade unions, the government provided transitional protection to members closest to retirement. This was intended to reflect that older workers would least be able to adjust their plans to reflect the pensions changes given the short time before their retirement.

5. In the LGPS, all members moved from the 2008 final salary pension scheme (the final salary scheme) into the new career average scheme on 1 April 2014 (the career average scheme), but members with transitional protection (being the older group of members who met certain qualifying criteria) were given an ‘underpin’ that was intended to provide that their retirement pension could not be less in the career average scheme than it would have been in the final salary scheme. Underpin protection differs from the approach used in other public service pension schemes where older workers who met the criteria for transitional protection remained in their final salary schemes after separate, new career average schemes were introduced.

6. Underpin protection in the LGPS was implemented through regulation 4 of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014^{[footnote 4]}. Full details of transitional protection and the existing underpin in the LGPS can be found within our consultation document.

7. Soon after the reforms to public service pensions were introduced, the terms of transitional protection were challenged by firefighters and members of the judiciary in relation to their pension schemes. In December 2018 the Court of Appeal found^{[footnote 5]} (in the case referred to by the shorthand McCloud in this document) that the transitional protection arrangements in those schemes directly discriminated against younger members and this could not be objectively justified. The government was subsequently refused permission to appeal to the Supreme Court.

8. In July 2019, the government confirmed their view that the ruling had implications for all the main public service pension schemes, including the LGPS, and that the discrimination would be addressed in all the relevant schemes, regardless of whether members had lodged a legal claim.

Chapter 1 - Rectifying the discrimination

Consultation

9. In July 2020 HM Treasury consulted^{[footnote 6]} on proposals to remove the discrimination from many of the schemes established under the Public Service Pensions Act 2013 (PSPA 2013). This consultation covered the schemes for the following workforces - NHS in England and Wales, NHS Scotland, Teachers in England and Wales, Teachers in Scotland, Fire in England, Fire in Wales, Fire in Scotland, Police in England and Wales, Police in Scotland, UK Armed Forces, Civil Service in Great Britain, and the Civil Service (Others) scheme. Given the unique nature of transitional protection in the LGPS, the then Ministry of Housing, Communities and Local Government consulted separately on how best to address the discrimination for affected members.

10. The LGPS consultation ‘Amendments to the statutory underpin’^{[footnote 7]} was open from 16 July 2020 to 8 October 2020 and set out how the government proposed to amend the statutory underpin to reflect the Courts’ findings in these cases. Primarily, we proposed to remove the age requirement from the underpin qualifying criteria. We also proposed additional changes to ensure that the underpin worked effectively and consistently for all qualifying members following the extension of the underpin to younger members. From April 2022, it was proposed that the period of underpin protection would cease and all active LGPS members would accrue benefits in the career average scheme, without a continuing final salary underpin.

11. 96 varied and helpful responses were received over the 12-week LGPS consultation. The government is grateful for the considerable effort and thought put into responses, which were received from the following respondents:

• 51 from administering authorities
• 12 from scheme employers
• 11 from professional advisers and service providers
• 8 from individuals
• 8 from representative bodies (including the Scheme Advisory Board (SAB)), and
• 6 from trade unions.

Written Ministerial Statement (WMS)

12. Having considered the consultation responses, on 13 May 2021 the government published a WMS^{[footnote 8]} to provide clarity on our plans prior to this government response. The WMS noted that responses were largely supportive of the key elements of the proposals and confirmed the main aspects of the remedy which would be taken forward in scheme regulations following the passage of primary legislation.

Public Service Pensions and Judicial Offices Act 2022

13. In 2021, the government brought a bill before Parliament to provide powers for the McCloud discrimination to be rectified. The Public Service Pensions and Judicial Offices Act 2022^{[footnote 9]} (PSPJOA 2022) received Royal Assent in March 2022. Chapter 3 of Part 1 of PSPJOA 2022 concerns local government, and provides powers for the Department to make regulations rectifying the discrimination for the LGPS in England and Wales.

Next steps

14. Following detailed consideration of all of the matters consulted upon, this document sets out our responses and details how we will approach delivery of the remedy in the scheme regulations in relation to the majority of the issues which have arisen. Annex A summarises how the remedy will work in relation to matters where policy decisions have been taken and, throughout this document, blue boxes outline key points regarding the remedy.

15. The government intends to commence a further consultation on McCloud remedy in the LGPS this spring. In this, we will seek further views on issues where we have not yet made final decisions on how the underpin will work and where we have confirmed in this document we will reconsult – such as aggregation (paragraphs 49 to 64) and flexible retirement (paragraphs 81 to 82 and 99 to 101).

16. Additionally, in the course of developing the government’s response to the McCloud case, a number of issues not consulted upon in 2020 have arisen, which may need to be addressed in scheme regulations. These includes matters such as compensation, interest payments and excess teacher service^{[footnote 10]}. The government will set out its proposals in relation to these issues in the upcoming consultation.

17. In our 2020 consultation, we sought views on draft regulations that would implement the remedy. A variety of helpful and considered technical comments were received, which have been considered. In the upcoming further consultation, we will seek views on an updated draft of the regulations, covering both the matters where decisions have already been taken and confirmed in this response as well as the matters we will be seeking views on in our next consultation. The updated draft will be significantly revised to reflect the technical feedback received in 2020, changes in policy that have since been made and to ensure the provisions reflect the terminology and structure used in PSPJOA 2022. Final remedy regulations will be made following consideration of responses to the consultation and the government intends that these regulations will come into force on 1 October 2023.

Chapter 2 - Our high-level approach

Extension of the underpin

18. In question 1, we sought views on our proposal that the discrimination in the LGPS should be removed by extending the underpin to younger scheme members.

Consultation responses

19. 84 respondents commented on this question, with 81 supporting the proposal (including eight with reservations). Some of the supportive responses commented that the extension of the underpin was the simplest and fairest way of rectifying the difference in treatment, whilst others said that they thought there was no practicable alternative.

20. Of the eight responses that were supportive with reservations, these reservations included frustration that the sector is facing this issue, noting the significant work that will be required to extend the underpin, and the additional administrative and benefit costs that will result. Other comments made, including from those who opposed the extension of the underpin, were that the proposal was flawed and cited specific issues which are discussed elsewhere in this response (the ending of protection at a member’s final salary normal pension age if earlier than 65 - see paragraphs 25 and 30 to 32 - and the exclusion of members joining after 31 March 2012 from remedy – see paragraphs 35 to 36 and 42 to 45).

Our response

21. As proposed in the consultation, we will bring forward scheme regulations that extend underpin protection to younger qualifying members. The government considers this to be the approach that is most consistent with the Courts’ findings. When the LGPS was reformed in April 2014, members with transitional protection were provided with the benefit of the underpin ‘check’ so that their pension over the underpin period would not be lower than it would have been in the final salary scheme. Extending this protection to younger members who also meet the qualifying criteria will remove the difference in treatment based on a member’s age.

Key points

• The McCloud discrimination will be removed in the LGPS by extending underpin protection to younger qualifying members.
• For service in scope of the underpin, members will receive an addition to their career average scheme pension if their final salary scheme pension over the underpin period would have been higher.

Underpin period

22. Question 2 sought views on a proposal that the ‘underpin period’, the period of protected membership, should end at the earlier of an active qualifying member’s final salary normal pension age (usually 65)^{[footnote 11]} and 31 March 2022. We considered ending the underpin period at a defined date to be an important part of the proposals as it would mean that, from 1 April 2022, all LGPS members would accrue pension on a career average basis, without underpin protection, and thereby treating all members equally going forward. Reflecting the recommendations made in the IPSPC’s 2011 report and the reforms made in 2014, the government considers the career average structure to be the right form of pension scheme design for the LGPS.

Consultation responses

23. There was widespread support for this proposal, with 83 respondents replying and 79 responses supporting the proposal (including four with reservations). Four opposed the proposal. Supportive responses highlighted that ending the underpin period at 31 March 2022 was consistent with the aim of removing the discrimination, as it would be the latest date a person originally protected by the underpin could accrue underpin protection. These respondents therefore considered that ending underpin protection at 31 March 2022 would be sufficient to give younger qualifying members a protected period of service at least equal to that their older colleagues had, whilst not going beyond that.

24. Concerns raised in response to question 2 included the cliff-edge nature of underpin protection ending at 31 March 2022, with some making the case for underpin protection continuing all the way until a qualifying member’s final salary normal pension age.

25. Two other issues were raised in response to this or other questions about matters relating to the underpin period:

• 6 responses raised concerns about the underpin period ending when a member reached their final salary normal pension age, if this was earlier than 31 March 2022. Concerns regarding this approach focussed on the suggestion that this approach appeared to disadvantage members who worked beyond their 65th birthday, and therefore could directly discriminate based on a member’s age. Some noted in particular that the LGPS is the only public service pension scheme to take this approach.
• A small number of administering authorities proposed that the final underpin calculations should be undertaken at the end of qualifying members’ underpin period, based on their final salary figures at that point in time. These respondents argued that this would significantly reduce the longer term administrative impacts that underpin protection creates.

Our response

26. The government intends to proceed with the approach consulted upon in relation to the underpin period. A qualifying member would have underpin protection on service accrued from 1 April 2014 until the earliest of the following:

• the date they leave active service,
• the date they reach their final salary normal pension age, or
• 31 March 2022.

27. Where a member leaves active service and returns to the LGPS without a disqualifying gap^{[footnote 12]} before 31 March 2022, any service accrued from then until the earlier of 31 March 2022 and the date they reach their final salary normal pension age would also be protected, if the pension rights from the two periods of service are aggregated^{[footnote 13]}.

28. The government also considers that it is not the right approach to provide underpin protection to all qualifying members until they reach their final salary normal pension age. This approach would have the effect of extending underpin protection for decades to come, and potentially creating a ‘two-tier’ scheme with qualifying members accruing benefits on a more generous basis than their colleagues who joined the LGPS too late to receive underpin protection. Ensuring LGPS benefit accrual occurs on a career average basis from 1 April 2022 is a key part of ensuring the cost savings envisaged by the public service pensions reform process are achieved, savings that were forecast to be over £400 billion across the public sector in the coming 50 years^{[footnote 14]}.

29. The government also does not consider that it would be right for all members’ underpin calculations to be undertaken at the end of their underpin period,^{[footnote 15]} using their final salary at this date. Whilst we acknowledge that approach would significantly reduce some of the longer term administrative impacts, the government does not consider that would give younger members equivalent protection to that their older colleagues have received (where the final salary element has been based on their pay later in their careers, after they may have experienced salary growth due to career progression).

30. The concerns regarding the proposal to end underpin protection when a member reaches final salary normal pension age have been considered. Nevertheless, the government considers that this remains the right approach.

31. This was the approach taken to transitional protection in the LGPS originally, with members having underpin protection until they reached their final salary normal pension age (for most members, at age 65). The subsequent finding that the protections were unlawful in excluding younger members meant that changes need to be made to extend the protections to younger members. However, the government does not believe this necessitates changing the approach that underpin protection should end if a member remains in active service after date they reach their final salary normal pension age.

32. Whilst the government has taken the decision that underpin protection should end for all members from 1 April 2022, meaning underpin protection will end for many before they reach their final salary normal pension age, the government considers this is the right thing to do. This is because it ensures that scheme benefits accrue on the same career average basis from 1 April 2022 for all members, regardless of whether they had underpin protection. It is also necessary to ensure the cost savings originally envisaged through pensions reform are achieved.

Key points

• The underpin period is the period over which underpin protection will accrue.
• The underpin period for qualifying members will run from 1 April 2014 to the earlier of:
  • 31 March 2022,
  • The date a member leaves active service, or
  • The date a member attains their final salary normal pension age (usually 65).
• A member’s underpin comparison will be based on their final pay at the earlier of the date they leave active service or reach their final salary normal pension age, usually at age 65.

Eligibility

33. In questions 7 and 8 we sought views on the qualifying criteria that would apply for members to have underpin protection. We proposed that members who were active in the final salary scheme on 31 March 2012 and who had accrued benefits under the career average scheme without a disqualifying gap in service (more than 5 years) would have underpin protection, subject to aggregation requirements.

34. Two main changes to the qualifying criteria that currently apply in respect of the underpin were proposed:

• The removal of the requirement for members to have been within ten years of their normal pension age on 1 April 2012, as this was the element that led to the unlawful discrimination occurring.
• That underpin protection would apply to qualifying members leaving active service with a deferred or an immediate entitlement to a pension, rather than only to those leaving with an immediate entitlement, as currently applies. We considered that requiring an immediate entitlement to a pension, which effectively requires a member to be at least 55 at the date they leave active service, would mean younger members would be less likely to meet this condition than their older colleagues. Expanding the approach would also be more likely to ensure that LGPS regulations would be compliant with preservation requirements under the Pension Schemes Act 1993 (PSA 1993).^{[footnote 16]}

Consultation responses

35. 84 respondents responded to question 7 on the expansion of the qualifying criteria to cover those leaving active service with a deferred entitlement to a pension. 82 were supportive (including two with reservations). Many of the supportive responses highlighted that this change would be necessary to ensure that the regulations would give an effective remedy to younger members, and to avoid the risk of further age discrimination occurring. Of the small number of concerns raised, most expressed a view that the expansion of the qualifying criteria would go beyond rectifying the discrimination in the court case. One also suggested that the government consider the implications for the costs of the remedy of taking this decision.

36. 11 respondents responded to say that the government should consider going further and provide some form of protection to members who meet the other underpin qualifying criteria but leave the scheme with a refund entitlement (i.e. with less than two years qualifying service) and not a deferred or immediate entitlement to a pension. In particular, it was argued that it would be reasonable for such members to have the potential value of the underpin taken into account if they subsequently transfer their benefits to another scheme. Some noted that younger members may be more likely to leave the pension scheme after a short period, and therefore not taking into account the potential value of the underpin for members with short service may cause indirect age discrimination.

37. One other main topic of concern was raised in consultation responses to question 8 or in response to other questions regarding the qualifying criteria, regarding the proposal that underpin protection would not apply where a member joined the LGPS or another public service pension scheme for the first time after 31 March 2012. In relation to this proposal, concerns were expressed by 41 respondents, including by the SAB, regarding the exclusion of the cohort of members who joined the scheme between 1 April 2012 and 31 March 2014, before the scheme reforms were introduced.

38. 25 of the responses that expressed concern regarding these members were from administering authorities. For most administering authorities, the primary concern was the potential administrative impacts if the government lost a legal challenge, requiring further changes to the underpin. However, some also expressed a view that they thought it was unfair to exclude these members, a view which was shared by 3 of the 6 trade unions that responded to the consultation. Amongst these respondents, it was argued that these members should have underpin protection to protect them from the impacts of the scheme reforms because they joined the scheme at a time when the scheme was still structured on a final salary basis, and they may not have been aware of the reform process which was underway. Some argued that excluding post-1 April 2012 joiners may potentially indirectly discriminate based on age, sex and race grounds, on the basis that more recent joiners are more likely to be younger, women and from minority ethnic groups.

Our response

39. In relation to the issues discussed in paragraph 35, the government has decided to proceed with the approach consulted on and allow underpin protection to apply whether a member leaves active service with a deferred or an immediate entitlement to a pension. This approach was supported by a large majority of respondents. The government does not believe that this goes beyond rectifying the discrimination as some respondents suggested. We consider it to be an integral part of ensuring that all qualifying members have an effective remedy, and that scheme regulations are compliant with the requirements of the PSA 1993. The costs of this approach have been considered in the calculation of the estimated total remedy cost of £1.8 billion on the 2016 scheme valuation basis (discussed more fully in paragraphs 175 and 176).

40. In line with the existing approach, members leaving active service with less than two years’ qualifying service under the scheme would receive a refund of their contributions if they do not transfer the service to another scheme or aggregate it with another period of LGPS membership. The amount of the refund payable would not be impacted by a member’s underpin protection. To ensure members with short service are not treated differently than their colleagues with longer service, the following approach will also apply in relation to members with less than 2 years’ qualifying service:

• If they transfer their benefits to a different scheme, the underpin will be taken into account in determining the transfer value that will be paid in the same way as if they had left with more than two years’ qualifying service.
• If their benefits are aggregated with a subsequent period of LGPS membership, the period of service will count as normal LGPS service for determining their eligibility for underpin protection and for use in any subsequent underpin calculations.

41. Whilst the government anticipates that most members who have underpin protection currently will have left the scheme with an immediate entitlement to a pension due to the fact most members had to be at least 55 on 1 April 2012, we understand there may be cases where this was not so. The retrospective remedy we are introducing will ensure that these members suffer no detriment, and LGPS administrators will need to review their records to identify such members and make any appropriate corrections to their pension.

42. We have considered the concerns expressed about the issue discussed in paragraphs 37 and 38. However, the government considers it remains the right approach that underpin protection should not apply to those first joining the LGPS or another public service pension scheme on or after 1 April 2012.

43. It is acknowledged that more recent joiners will, on average, typically be younger, and that there may be more women and minority ethnic groups amongst new joiners. However, extending underpin protection, which was designed to be transitional, to members who would never reasonably have expected this is not considered justifiable. Changes to pension arrangements or other terms and conditions of employment by their nature impact differently on those who join or leave employment at different times. The government therefore remains of the view that the limited impacts on these protected groups are justified in the context of its aim of removing earlier discrimination in a manner which is proportionate, does not create new unjustifiable discrimination and is affordable.

44. The purpose of the original transitional protection was to protect those members closest to retirement and already in public service, as they had the least time to prepare for the changes (although the Court of Appeal decided that this did not justify the subsequent discrimination).

45. This rationale never applied to those who joined the schemes in the year commencing 1 April 2012, or in subsequent years, after the former coalition government’s proposals had been made known in November 2011. The publication of the final IPSPC (Hutton) reform proposals^{[footnote 17]}, acceptance of those by the coalition government^{[footnote 18]} and the subsequent proposed introduction of the reformed schemes in the White Paper ‘Good Pensions That Last’^{[footnote 19]} were well publicised at the time and were the subject of widespread media coverage. The government therefore remains of the view that those joining after 31 March 2012, considered as a group, can reasonably be expected to have known that they would not remain in the legacy schemes (or be otherwise protected), whether or not the precise date of anticipated changes was known.

46. Since the 2020 consultation, the government has taken the decision to amend another aspect of the underpin eligibility rules to align with the approach being adopted in other public service pension schemes. Under the current underpin qualifying criteria, members must have been in active service on 31 March 2012 to qualify for underpin protection. However, in line with the approach that was consulted on in respect of other public service pension schemes in 2020, it has now been decided that protection should also apply to members who were not in active service on 31 March 2012, but who were active in the LGPS or another public service pension scheme before that date^{[footnote 20]}, and who had LGPS membership during the underpin period, without a disqualifying gap in service (a continuous period of more than five years). The PSPJOA 2022 passed by Parliament last year also provides for this approach.

47. Whilst only one consultation response raised this issue, it has become clear that requiring members to have been in active service on 31 March 2012 specifically to qualify for underpin protection may disadvantage members who have taken career breaks, for example to care for young children or elderly relatives. The government recognises that women are more likely to take a career break than men. Analysis supports this at the UK population level where, in 2021, on average 71% of mothers with children aged 0 to 2 were in paid employment compared to 94% of fathers with children in the same age range^{[footnote 21]}. This analysis indicates that the age of a woman’s youngest child influences whether or not she is in paid employment. The employment rate for mothers increases by 6 percentage points to 77% for women with children at primary school (aged 5 to 10) and by 10 percentage points to 81% for mothers with secondary age children (11 to 15).

48. The revised approach differs from the approach set out in our May 2021 WMS, where we stated our intent that scheme regulations would continue to require members to have been in active service on 31 March 2012. We also appreciate that an expansion of the qualifying criteria will increase the work required to be undertaken by fund administrators in implementing the remedy. By necessity, the real-world costs of remedy will also increase, but advice provided to the department by the Government Actuary’s Department (GAD) suggests the total cost estimate of remedy in the LGPS of £1.8 billion would not be materially impacted. In taking its decision, the government has considered these points, but considers that allowing for career breaks is an important change which will ensure greater parity in how the protections apply to workers who do and do not take career breaks.

Key points

• The following members will be in scope of underpin protection:
  • were an active member of the LGPS or another public service pension scheme on or before 31 March 2012,
  • were an active member of the career average scheme,
  • did not have a disqualifying gap in service (more than 5 years), and
  • leave active membership with a deferred or immediate entitlement to a pension, or they die in service.
• Whether a member receives underpin protection may depend on whether they meet the qualifying criteria in a ‘single scheme membership’. The government will consult again on this issue and further details are outlined in the next section.
• Where a member would meet the qualifying criteria but has left the LGPS with less than two years’ qualifying service, the value of the underpin will be taken into account if they subsequently transfer their benefits out to another scheme or aggregate those benefits with another LGPS period of service. If their contributions are refunded, that will be paid in the usual way.

Aggregation

49. Questions 9 to 11 sought views on a proposal that members would have to meet the underpin qualifying criteria in a single scheme membership for protection to apply. This would mean members would only have underpin protection if they met the agreed qualifying criteria described in the above Key Points box in relation to a single LGPS pension record held in the LGPS, including any previous service aggregated with or transferred into that record for the purpose of calculating benefits. To implement this approach, we proposed that members would be required to aggregate previous LGPS service to get underpin protection in a record if:

• They did not meet the qualifying criteria in that record, but
• If they aggregated another period of service, they would meet the qualifying criteria in that record.

50. In this context, ‘aggregation’ refers to the process by which separate periods of LGPS membership are ‘joined up’ for the purpose of determining benefits. In most circumstances, LGPS regulations allow separate records to be joined up in this way, and since the career average scheme was introduced, aggregation is in most cases the default option, with members having the opportunity to opt out of this if they choose.

51. As set out in the consultation, current scheme regulations governing the underpin^{[footnote 22]}do not appear to include an aggregation requirement. We considered that this may not have been intentional and that it was inconsistent with our general policy approach, where aggregation is an important principle for the effective and efficient administration of the LGPS, which is locally administered by 86 administering authorities.

52. Reflecting this, we proposed that an aggregation requirement be introduced and that this be applied retrospectively to avoid differences in how the underpin applies to different groups of members, as well as highly significant administrative difficulties in the coming years. To ensure that members affected by the retrospective nature of the change would not be worse off, it was also proposed that active and deferred members would be given an additional 12 months to elect to aggregate previous periods of LGPS membership, where at the time they did not meet the qualifying criteria in a single post but a decision to aggregate would mean they would. It was not proposed that pensioner members would be required to make such an election - instead, for these members any pension in payment that included an underpin addition on the basis of unaggregated service would continue to be paid.

Consultation responses

53. Question 9 sought views on the proposal that members must meet the qualifying criteria in a single scheme membership for underpin protection to apply. 81 respondents replied to this question, with 78 agreeing that this should be required (including 8 with reservations), two disagreeing and one saying they didn’t know.

54. 50 responses to this question were from administering authorities, all of which were supportive. The SAB, representing the views of both member and employer representatives, also agreed. The two responses which disagreed were submitted by a trade union and an individual.

55. Most supportive responses, particularly those submitted by administering authorities, highlighted that retaining the existing approach would be likely to cause significant administrative difficulties and these would last for decades, exacerbated by the fact that underpin protection applies to so many members (estimated at 1.2 million pension records). Many also noted that the current regulations go against the usual policy approach in the LGPS.

56. Only one of the two respondents who disagreed with our proposal explained why. This response was from Prospect, a trade union, who said that the proposal would unfairly penalise members who may wish to keep their pensions separate due to their personal circumstances. For example, this may apply if they had a higher final pay figure in their previous post.

57. Question 10 sought views on the proposal that certain active and deferred members should have an additional 12 month period to decide to aggregate previous LGPS membership as a result of the introduction of an aggregation requirement. There was widespread support for this approach. 85 respondents replied to this question, with 80 supportive (including 26 with reservations). Four disagreed, and one didn’t know.

58. Most supportive responses thought an additional aggregation period would be essential to be fair to those who would have taken their decision on whether to aggregate their benefits before the introduction of an aggregation requirement. Of the four responses which disagreed with allowing this, concerns were varied – one service provider highlighted that there are already provisions in the regulations that allow aggregation to take place after the initial 12 month period has elapsed, and one administering authority said they thought that this would be too administratively complex.

59. Amongst responses to question 10, a variety of issues were raised, including by those who were supportive:

• Many responses highlighted that the aggregation decision would be a complex financial decision, requiring good, clear communications so that members understand the decision they are making. Some highlighted that the communications difficulties would be particularly challenging as many members will be asked to make their decision at a time when the ‘right’ answer for them may not be known – for example, because they may have pay changes in the future which would impact on their final pension entitlements. It was also highlighted that members may need to take independent financial advice from a qualified professional.
• Many responses also highlighted the administrative burden that an exercise of this type would involve, which would be particularly impactful on administering authorities due to the additional work being created by the McCloud remedy more generally. Particular concerns were raised about the impact on administration in cases where members need detailed support in making their decision, including cases where members may wish to seek financial advice, which administrators would be unable to provide.
• Other issues concerning the practicalities around the administration of the aggregation option were raised in responses, including:
  • The challenge in identifying the members who would be in scope of the additional aggregation option. By their nature, these members would have had a previous period of LGPS membership and LGPS administrators may not be aware where this is the case and therefore whether they need to be given an aggregation option. Some suggested guidance should be provided to ensure a consistent approach is adopted by LGPS administrators in respect of this.
  • Whether a 12 month period from the date regulations come into force would be sufficient for members to take this decision. The need for administrators to identify members affected, obtain quotations from other LGPS administrators where relevant, and give members sufficient time to consider their options were highlighted as reasons why a longer period may be more appropriate. Some suggested that the period could be extended to 18 or 24 months, or that administering authorities could have the discretion to accept aggregation decisions after the window has elapsed, as already applies in LGPS regulations
• Some respondents, including the SAB, highlighted two groups of members where there currently is no aggregation option when an LGPS member re-joins the scheme and questioned whether the additional aggregation window would apply to those members, and how. The two groups identified were:
  • Members with two or more concurrent LGPS memberships which cease on the same day. Scheme regulations provide that such records cannot be aggregated with each other, as the regulations require that one post remains ongoing for aggregation to be possible.
  • Members who opted out of the scheme on or after 11 April 2015. Scheme regulations were changed with effect from this date to provide that members opting out after this date could not aggregate their previous membership(s) if they subsequently re-join the scheme. This was intended to prevent members opting out of the scheme and then re-joining and aggregating their previous service solely or mainly to get a higher pension arising from an upcoming redundancy or ill-health retirement.
• A minority of administering authorities suggested that, to avoid members having to make an aggregation decision at a time when there is uncertainty as to whether it is in their best interests to aggregate or not, the aggregation decision should be moved to the point of benefit crystallisation (for most members, their point of retirement) when their final salary would be known.

60. Question 11 sought views on the extent to which introducing an aggregation requirement retrospectively would have ‘significant adverse effects’ (SAEs) in relation to a person’s pension in the terms set out in section 23 of the PSPA 2013. 73 respondents replied to this question, with 44 saying that they did not think SAEs would occur, 23 saying they thought it was possible, 2 saying they thought SAEs would occur and 3 saying they didn’t know or were unqualified to respond.

61. The respondents who thought SAEs would not occur generally raised two main points. Some acknowledged the risk of SAEs occurring given the retrospective nature of the proposed change, but said that they thought the additional aggregation option, if administered correctly, would mean SAEs should not occur. Some thought that there may be some adverse effects, but that these wouldn’t be sufficient to be significant adverse effects.

62. The respondents who thought SAEs would be possible also often made some of the points noted in the preceding paragraph but felt that, given the range of members in scope and the different life circumstances members would have, SAEs would be possible, but likely rare. Responses highlighted the importance of good communications, and proposed that administering authorities should be supported by communications and guidance issued at the national level. Some who felt that SAEs may occur highlighted again the option of members having an aggregation option at retirement to minimise the risk of this.

63. Only one of the two respondents who thought SAEs would occur explained why. This response, from an administering authority, noted that aggregation decisions are not always in a member’s interest, and that if the member had been on a higher salary in their previous post, it would be detrimental to the member to aggregate.

Our response

64. Having considered the responses carefully, the government has decided to seek further views on this aspect of the McCloud remedy in our next consultation. This is a complex issue, with advantages and disadvantages to the different potential options. The government wants to ensure that it has fully considered its policy on this topic, including the practical and communications challenges, and a further consultation will allow us to obtain further information before making a final decision.

Chapter 3 – Detailed elements

Draft regulations and retrospection

65. Question 3 sought views on the proposal that the changes to scheme regulations to implement the changes should be backdated to 1 April 2014. This was suggested to ensure that the new underpin regulations applied consistently to those originally protected by the underpin and those benefiting from the McCloud remedy. Questions 4 to 6 concerned the draft regulations contained in Annex B of the consultation, and the implementation of those regulations.

Consultation responses

66. A large majority of respondents agreed that the amending regulations should be applied retrospectively to 1 April 2014. Most stated that they thought this would be essential for fairness reasons. However, in response to these questions many also highlighted the significant administrative burden that the remedy would create for employers and administrators, as well as the consequential costs. Comments on the administration impacts of our proposals are discussed in more detail in paragraphs 156 to 168.

67. In relation to the draft regulations, some respondents made comments on policy matters which we have addressed elsewhere in this document. A variety of technical comments were also submitted, which are being considered in the drafting of the regulations which the government will seek views on in our next consultation.

Our response

68. Scheme regulations implementing the McCloud remedy for the LGPS will be made and laid before Parliament, coming into force on 1 October 2023. When the regulations come into force, they will be effective backdated to 1 April 2014, providing a single set of rules governing the underpin as it applies to those originally protected, and those benefitting from the remedy.

Technical proposals

69. Questions 12 to 15 sought views on a number of detailed aspects of the proposals, outlined in paragraphs 55 to 102 of our consultation, including the process by which the underpin calculations would be undertaken, and how the underpin would apply at different stages of the member life cycle.

Consultation responses

70. Across these issues, there was general support from most stakeholders for our proposals to amend and update the scheme regulations to ensure the underpin protection works effectively and consistently for the variety of situations that may arise. For example, there was widespread support for the following proposals:

• That the underpin calculation should take into account the impacts of early and late retirement adjustments to ensure members receive the higher benefit type based on the final figures calculated at their retirement.
• That, where appropriate, any increased pension entitlements arising from underpin protection should extend to other benefits payable under the scheme’s regulations – e.g. where a member transfers out, or where survivor benefits are payable.

71. The Department’s policy proposals in relation to the below matters also did not generate significant comments and are being taken forward as proposed:

• How the underpin will flow through to survivor pensions and death grants,
• The underpin calculation applicable where a redundancy pension is payable to members 55 and over, and
• The calculation of the underpin where a member transfers out of the LGPS on a non-Club basis.

Annex A provides an overview of the McCloud remedy, and summarises the approach that will be taken in respect of these issues.

72. Amongst the matters discussed in these sections of the consultation, the main comments were on the following areas:

73. Two-stage process – In the consultation, we had proposed that for most members the underpin would be assessed in two stages, the first of which would occur at a member’s ‘underpin date’, broadly the earlier of the date they a) leave active service and b) reach their final salary normal pension age. The second stage would take place on a member’s ‘final underpin date’^{[footnote 23]}, broadly the date they take their benefits from the scheme. Annex C of the consultation document described in detail how this two-stage process was proposed to work for different members.

74. The two-stage approach was designed mainly to ensure that the following twin aims could be achieved:

• that members would receive information on how the underpin may apply to them at the earliest possible date, allowing them to plan for retirement in the usual way, and
• that there would be final calculations undertaken at the point a member takes their benefits, to ensure the values calculated take into account the impact of early/ late retirement adjustments, and give the member the higher pension.

75. The majority of respondents of all types were supportive of this approach. 82 respondents replied to this question, with 75 supportive (of which 15 expressed reservations). Some supportive responses set out that the two-stage process appeared a pragmatic approach, in line with policy intent. Others felt it was essential to ensure members would be aware of their potential entitlements as early as possible in their careers, whilst guaranteeing the higher benefit at retirement.

76. Concerns about the two-stage process included comments from a small number of administering authorities that it was unnecessarily complicated, and that the only requirement should be for members to be provided accurate figures at retirement. Concerns were also expressed that the two-stage process could cause confusion to members, which would be unwelcome, particularly given the other communications challenges around underpin protection.

77. One response questioned whether it would be possible for a member to have a provisional underpin addition (a ‘provisional guarantee amount’) at the underpin date, but then find they do not have an addition when their final calculations are undertaken – this could present communication difficulties. The SAB also queried whether a provisional guarantee amount calculated at the underpin date would legally change the member’s benefit entitlement at that point in time or whether this would only be changed if the member had a final guarantee amount at their final underpin date.

78. Transfers – In respect of transfers, a significant number of respondents raised concerns about our proposals in relation to ‘Club’ transfers, under the Public Sector Transfer Club^{[footnote 24]}. In the consultation we had outlined an option for how protected service could be treated following a transfer from one public service pension scheme to another. In line with a similar principle outlined in the wider HMT consultation^{[footnote 25]}, we had said that an option could be for members to have to make a choice at point of transfer on which benefit type they wished to buy in the receiving scheme. Quotations would be provided to help members make an informed choice.

79. Around a quarter of respondents felt that this approach would place a considerable onus on members who in many cases would not know the ‘right’ choice, as the answer would depend on a variety of unknown factors, including their future salary growth. The need for clear communications were highlighted, but it was noted that members may need to take independent financial advice to assist in taking a final decision. Some thought that the proposals were inconsistent with other elements of the remedy, where the comparison of benefits would take place at the point benefits are taken from the scheme. It was felt that requiring members to pick a benefit type at point of transfer would be unfair on members who moved roles within the public sector.

80. There were also comments on other aspects of transfers:

• For past outward transfers to private sector schemes, some potential scenarios were raised if that transfer value needs to be retrospectively increased due to the underpin, In particular, a) what should happen if the receiving pension scheme refuses to accept the increase (e.g. if it is seen as too trivial), and b) what should happen if the receiving scheme charge an administration fee to the member for accepting the increase to the transfer.
• For interfund transfers between LGPS administering authorities, some suggested that there should be no need to revisit the past cash amounts which were transferred between funds on the basis that these would, on average, balance out.
• The SAB noted that it was unclear how any increase in value would be taken into account for the annual allowance when LGPS benefits are transferred to another scheme and suggested this would need further consideration.

81. Flexible retirement – Seven respondents queried our proposals in respect of flexible retirement. In the consultation document, we had proposed^{[footnote 26]} that in cases of ‘full’ flexible retirement^{[footnote 27]}, the date of flexible retirement would be the member’s underpin date and their final underpin date. No further underpin protection would apply in relation to service accrued after the flexible retirement, even if the flexible retirement date was before the end of the underpin period for that member. In relation to ‘partial’ flexible retirement^{[footnote 28]}, we had proposed that, where there was an addition to the member’s pension arising from the underpin at their flexible retirement date, the amount of the addition given to the member at that point in time should be proportionate to the amount of the career average pension for the underpin period they are choosing to receive. For example, if a member is only receiving 20% of their pension for that period at their flexible retirement date, they would only receive 20% of the final guarantee amount. The remainder would be payable at the point the member takes the rest of their benefits.

82. Respondents who raised concerns felt this approach may be unfair to members who flexibly retire. In particular, it was felt that by not providing for underpin protection for any remediable service accrued after a member’s flexible retirement date, members may receive less protection than members who had not flexibly retired. Some also queried whether there should remain an ongoing final salary link after the point of a member’s flexible retirement in relation to underpin period service not put into payment at the flexible retirement date.

83. Ill-health retirement – the SAB questioned the policy intent where a member in receipt of a tier 3 pension has that uplifted to a tier 2 pension, for example following the 18 month review. It was queried whether this would be a further underpin date.

84. Trivial commutation – A number of administering authorities queried the approach that was proposed for calculating the value of a member’s underpin rights for the purposes of ‘trivial commutation’ payments. Under regulation 34 of the 2013 Regulations, members with small total pension rights can extinguish their future right to a pension from the scheme and receive a trivial commutation lump sum^{[footnote 29]} or small pot lump sum^{[footnote 30]} instead. It was proposed that the same methodology for calculating a qualifying member’s non-Club cash equivalent transfer value should be used for the purposes of payments under regulation 34 too. A number of respondents, mostly administering authorities, felt the approach proposed was too complicated.

85. Pension sharing – The absence of proposals in our consultation regarding the impact of the retrospective changes on divorce and pension sharing orders was noted by some respondents. In particular, it was highlighted that proposals on divorce had been included in the HM Treasury consultation on McCloud remedy for most other public service pension schemes.^{[footnote 31]}

86. Public sector exit payment cap – A small number of respondents, including the SAB, queried the interaction between the McCloud remedy and the public sector exit payment cap, which the government had at the time proposed^{[footnote 32]}introducing to prohibit the payment of exit payments in excess of £95,000 to, or in respect of, individuals where they leave a public sector employment. The cap on public sector exit payments has since been withdrawn.

Our response

87. Following consideration of the responses discussed in the previous section, the government’s responses are as follows.

88. Two-stage process – In line with the views of most consultees, the government considers the two stage process the right balance in providing that members have early information on their potential benefits, whilst ensuring they have the right benefits at retirement. We recognise the challenges this may present for member communications, and will work with the SAB and the McCloud communications working group in supporting the development of standardised communications for members to help ensure there is clarity on the approach being taken.

89. As set out in the consultation document, the calculations undertaken at a member’s underpin date will be provisional and there would be no change to a member’s legal pension entitlement unless and until a final guarantee amount is awarded at the member’s final underpin date.

90. Whilst the underpin regulations are complex and individual member circumstances will vary considerably, the government considers that in the majority of cases a member who has a provisional guarantee amount at their underpin date would have an addition to their pension, a final guarantee amount, at their final underpin date. There may be rare cases where a member who has a small provisional guarantee amount does not have a final guarantee amount at their final underpin date due to differences in how revaluation and pensions increase apply to the career average and final salary parts of the calculations. We understand this is most likely to occur where a member has a small provisional guarantee amount at their underpin date, and their underpin date is late in the scheme year. This situation shows the importance of clear, accessible communications to members, particularly where a provisional guarantee amount has been calculated.

91. Transfers – In respect of Club transfers, the government notes the concerns raised about fairness if members are required to take decisions at the point transfers are made. In line with the HMT government response^{[footnote 33]}, the government has decided to revise its approach in two main ways.

92. Firstly, for consistency with other parts of the remedy, members will not be required to make a choice at point of transfer to determine the benefit type (final salary or career average) they are obtaining in the receiving scheme.

93. Secondly, transitional protection will ‘convert’ to that of the receiving scheme at point of transfer. This reflects that transitional protection works differently from the LGPS in most other public service pension schemes. In those schemes, members can choose between final salary and career average rights for the remedy period at the point they take their benefits – commonly referred to as ‘the deferred choice underpin’ (DCU). Converting the protection at point of transfer will ensure that members retain protection following a move to employment in another part of the public sector, whilst reflecting that members are moving to a different public service pension scheme with a different form of protection.

94. This approach means the following will apply in relation to transfers in and out of the LGPS:

• Club transfers into LGPS from a DCU scheme^{[footnote 34]} – Where a member had remediable service in the DCU scheme that transfers to the LGPS, the member will have LGPS underpin protection on that service. The DCU scheme administrator would provide the LGPS administrator with details of the reformed and legacy scheme service the member had accrued over the underpin period. These amounts would be used to calculate credits in the LGPS that would then be used as part of the LGPS underpin calculations in the normal way.
• Club transfers into DCU scheme from LGPS – Where a member had remediable service in the LGPS that transfers to a DCU scheme, the member will have DCU protection on that service. The LGPS administrator would provide the DCU scheme administrator with details of the reformed (career average) and legacy (final salary) scheme service the member had accrued over the underpin period. These amounts would be used to calculate credits in the DCU scheme. At the point a member takes their benefits, the member would have a choice between reformed and legacy scheme benefits for the remedy period, with the transferred LGPS remediable service benefits part of this choice.

95. For Club transfers between the different LGPSs (the LGPS in England and Wales, the LGPS in Scotland, and the LGPS in Northern Ireland), transferred remediable service would give a member underpin protection in the receiving scheme.

96. On implementation of the remedy, Club transfers involving remediable service that have already completed will need to be revisited by administrators to ensure that qualifying members get the full benefit of remedy in their new scheme. Past cash payments between LGPS funds and DCU schemes will also need to be revisited to ensure the receiving fund/ scheme has sufficient assets in relation to the transferred benefits. This approach is necessary to reflect differences between schemes in the relative value of the remedy, and to reflect that the LGPS is the only major funded public service pension scheme.

97. The government is also considering how to deal with a further issue related to Club transfers. Some LGPS members who had previous public service pension scheme membership in the underpin period will have made their Club transfer decision before the McCloud case had reached its conclusion or before the government had set out details of the proposed remedy. For those who were not originally old enough to have underpin protection, they would not have considered the underpin in making their transfer decision and may have made a different decision on the basis of the remedy set out in this paper. The government is considering if any remediable steps should be put in place for these members. Further detail on this issue, including the government’s proposed approach, will be set out in the government’s next consultation on McCloud remedy in the LGPS.

98. In relation to the points raised about other types of transfer in consultation responses:

• We recognise that there may be cases where members have transferred out LGPS rights on a non-Club basis and those rights subsequently need to be retrospectively increased. The government will consider any steps that may need to be taken in relation to such cases with the guidance working group (see paragraph 167).
• The government agrees that past cash payments between LGPS administering authorities relating to interfund transfers should not be revisited as a result of the changes being made as, across the scheme, these payments are likely to balance out, and are not expected to be material from a funding perspective. This will not affect the value of benefits to members, who will be retrospectively awarded any increased value to their pension arising from the remedy.
• In relation to the SAB’s concerns about non-Club transfers and the annual allowance, the government will consider the comments in determining its overall approach to tax.

99. Flexible retirement – The government has considered the concerns raised about flexible retirement, and has decided to revise our approach. Whilst we recognise that flexible retirement is a choice which members make based on the rules at the time, and that the consultation proposal we set out was based on the regulations governing the underpin as they currently apply, we believe it would be more consistent with the general principles of underpin protection, to move to an approach which would allow for underpin protection to build-up in relation to service after a person’s point of flexible retirement, up to the earlier of the member’s final salary normal pension age, or 31 March 2022.

100. The government’s initial view is that multiple underpin dates for cases of flexible retirement would be the best way of approaching this. Under this, a member’s flexible retirement date could be their underpin date in respect of the pension they choose to take at that point in time, and they would have further underpin dates when they decide to flexibly retire again or when they retire in full. Whilst some consultation responses proposed an alternative approach to our consultation proposal that would retain a single underpin date for flexible retirement, by moving the underpin date to the date a member who has previously flexibly retired takes the rest of their benefits, the government considers that this approach would be flawed. It would not give the member any underpin protection in relation to their protected service at the point of flexible retirement. In the event a member was to die before taking the rest of their pension this could mean they are deprived of underpin protection altogether, although their protection would be taken into account for the purposes of any survivor pensions payable. It would also potentially lead to a highly complex underpin calculation, which could for example need to take into account the different payment dates, and therefore the different early and late retirement factors applicable, for different parts of a member’s protected service.

101. In the next consultation (mentioned in paragraph 15), the government will set out details of its proposals for flexible retirement and seek views from stakeholders on that proposal.

102. Ill-health retirement – The government intends to proceed with the proposals outlined in the consultation regarding ill-health retirement. In relation to the SAB’s question about what would apply where a tier 3 pension is uplifted to a tier 2 one, it is the government’s intent that this should constitute a further underpin date and any addition to the member’s pension from the first underpin date should be removed after the uplift. It is acknowledged that some members who received an addition initially may not receive one after the second underpin date due to the enhanced service awarded. However, overall, the member would be in receipt of the right pension and one that is consistent with what they would have received if they had been awarded a tier 2 pension originally.

103. Trivial commutation – Following consideration of the points raised by consultees (as set out in paragraph 84), the government has decided to change the proposed method for calculating trivial commutation and small pot lump sums for members with underpin protection. Under the revised approach, we will require the following approach is taken for calculating a member’s rights in respect of payments under regulation 34 of the 2013 Regulations.

• a qualifying member’s total pension is calculated at their final underpin date, including any final guarantee amount calculated as being applicable at that date, and
• the total commutation lump sum is calculated based on those total pension rights.

104. The government considers that this approach would be simpler to administer and that it should not be detrimental to members in relation to the overall benefits calculated compared to the original consultation proposal.

105. Pension sharing – The government has decided that a consistent approach will apply between public service pension schemes to qualifying members who have a pension sharing order applied to their pension, which includes a period of protected service. In line with the principle set out in the government’s response to the HM Treasury consultation on McCloud remedy^{[footnote 35]}, scheme regulations will provide that the divorce cash equivalent transfer value will be calculated as though the pension debit member had become a deferred member and had elected to transfer their pension rights on a non-Club basis at the relevant date (see paragraph 95 of our 2020 consultation document). We will consult on the changes to scheme regulations needed to achieve this.

106. For cases where the pension sharing order has already been implemented when scheme regulations come into force and the CETV provided to the court would have been higher as a result of the implementation of the underpin, the pension credit member’s LGPS benefits will be increased in proportion with the increase in CETV to reflect that additional amount.

107. Public sector exit payment cap – The cap on public sector exit payments has been withdrawn. The government is now developing a range of options to ensure that exit payments represent value for money for the taxpayer, including in local government. The government will consider possible interactions with the McCloud remedy in developing any proposals and, if considered necessary at the time, will seek stakeholders’ views on this matter.

Key points

• Scheme regulations implementing the remedy will be applied retrospectively to 1 April 2014, providing a single set of underpin rules as they apply to those originally protected, and those benefitting from the remedy.
• The value of the underpin to individuals will be assessed in two stages:
  • At a member’s ‘underpin date’, usually the earlier of the date they leave active service and reach age 65. This will give the member information on how the underpin may apply to them when they retire.
  • At a member’s ‘final underpin date’, usually when a member takes their pension, when a final comparison will be undertaken after taking into account early and late retirement factors. This will ensure members get the higher pension at the point their pension is calculated.
• Underpin protection will be taken into account in calculating voluntary retirement pensions, but also in calculating ill-health pensions, redundancy pensions and trivial commutation lump sums.
• Underpin protection will also be taken into account for members who flexibly retire, and the government will consult again on the mechanism to achieve this.
• Where a qualifying member dies, the underpin will be taken into account in determining the level of any survivor pensions payable.
• When qualifying members transfer in remediable service from another public service pension scheme on a Club basis, or transfer remediable service out to another public service pension scheme on a Club basis, they will continue to have protection in the receiving scheme. The protection will convert to that provided in the receiving scheme.
• If a qualifying member transfers their LGPS pension out of the scheme and this doesn’t constitute a Club transfer, the value of the underpin will be taken into account in the calculation of the member’s total Cash Equivalent Transfer Value (CETV) which will be paid to their new scheme.
• Where a qualifying member divorces and a pension sharing order is issued by the Court, the value of the pension will be based on the member’s rights, including the underpin, as if they were transferring their pension out on a non-Club basis.
• The government will consult again on how the underpin will work where a member takes flexible retirement.
• Any interactions between McCloud remedy and local government redundancy reform will be considered as part of the government’s work on those reforms, and consulted on if necessary.

Annual benefit statements

108. Questions 16 and 17 sought views from stakeholders on the question of including underpin information on members’ annual benefits statements (ABSs). The inclusion of such information on the ABS was suggested because the ABS is the main way in which members receive updates on the value of their pension. We proposed that the SAB would lead on agreeing standardised wording that administering authorities throughout England and Wales could include in ABSs.

Consultation responses

109. In total 82 responses were received to Question 16 with an even split between those that supported the inclusion of underpin information on the ABS and those that opposed it. A further 85 responses were received in response to Question 17. There was broad consensus across all submissions that the ABS is a vital tool for communicating members’ entitlements. Further, there was widespread consensus that the ABS needs to be a tool to help members plan in confidence towards their retirement.

110. Across responses there was a concern with the challenges of communicating underpin protection in a manner that is both technically correct and easy for members to understand. Those opposing the inclusion of underpin information in particular pointed out the complexity of the underpin’s calculation and its tentative nature and expressed concerns that the proposed approach could cause confusion. Some responses highlighted the risk of members disengaging from reading an already complex document. Others pointed to the Department for Work and Pensions’ ambition of simplifying annual statements for private sector pension schemes^{[footnote 36]} and stated that they thought this was inconsistent with the changes proposed in the consultation.

111. Among those opposed to our suggestion two additional concerns were prominent: administrative costs and technical concerns. Submissions by administering authorities in particular pointed to the resource challenge associated with identifying qualifying members, adjusting their annual benefit statements, and engaging with queries from confused members. While some submissions were concerned about current software’s ability to adjust to the proposed changes, submissions by service providers stated that the required changes are possible with sufficient lead in time.

112. A number of consultees commented in response to this question and to question 25 that, in the immediate period after the McCloud requirements come into force, a number of case types will be of the highest priority – for example correcting pensions in payment and backdating any pension/ survivor benefit changes, ensuring that newly paid pensions are calculated accurately, and taking forward the aggregation options exercises. Whilst ABSs will be important in the future in helping members understand how the changes impact on their own pensions, some noted that the highly significant work to update records for so many members in order for ABSs including underpin data to be issued could detract attention from cases which require immediate consideration.

113. Support for agreed and standardised wording for administering authorities to use spanned across all submissions.

Our response

114. After careful consideration of consultation responses, the government has decided not to bring forward new regulatory requirements in relation to how McCloud remedy should be presented on ABSs. There will be no standalone requirement for ABSs to include estimates of members’ underpin figures, including their provisional underpin amounts, provisional assumed benefits and provisional guarantee amounts. Instead, in line with existing requirements, where a member qualifies for underpin protection their ABS must clearly indicate the potential value of that protection in the total pension.

115. The decision takes account of the broad support within consultation responses that members need to be informed of their entitlements fully. This ambition to adequately reflect a member’s entitlement, however, needs to be balanced with the requirement of keeping the annual benefit statement an accessible document. As several responses stated, there is a risk of members disengaging if statements are too hard to decipher and overloaded with technical information.

116. Existing legislation places requirements on administering authorities relating to ABSs. The Public Service Pensions (Information about Benefits) Directions 2014 issued by HM Treasury under s.14(3) of the PSPA 2013 stipulate that an active member’s ABS must include the amounts payable from the date that would be payable on a member leaving pensionable service. The government considers that this obligation includes a requirement to consider the underpin, specifically how much the total pension would increase due to the underpin if the member left active service on the ABS date.

117. Beyond this existing requirement, the government has decided not to add any additional obligations regarding the content of the ABS and the changes to regulation 89 of the 2013 Regulations we consulted on will not be taken forward. It will be up to individual administering authorities to determine whether any further values relating to the underpin would be helpfully included in members’ ABSs.

118. As noted in other places in this document, there are significant steps needed to accurately update members’ records arising from these changes – including the collection and testing of data from employers, the updates needed to systems, and the amendments to individual records. All steps will need to be undertaken before ABSs can reflect a member’s underpin rights. To ensure that the changes to ABSs do not detract from work on other aspects of the McCloud remedy where the value of past and immediate payments to members may be affected, the inclusion of an underpin estimate within a member’s total pension on their ABS will not be required until the ABSs for the 2024/25 scheme year are issued. The government will consider what legislative changes are necessary to achieve this.

119. The government will work with the McCloud communications working group that has been set up by the Local Government Association on the formulation of scheme-wide agreed explanations to be included in qualifying members’ annual benefit statements regarding the underpin.

Key points

• As required under existing legislation, administering authorities must include estimates of the underpin for qualifying members on ABSs.
• This requirement will not apply until 2024/25 and the government will conside the legislative changes needed to achieve this.
• The government will work with the SAB and the sector on the steps needed to ensure the ABS is a positive tool for helping members to understand the underpin and how it affects them.

Tax

120. In the consultation we set out the government’s proposed approach to the taxation of benefits arising from the underpin. In particular, we set out that for the purposes of a member’s annual allowance^{[footnote 37]} calculations, the underpin would first be considered in the year of a member’s final underpin date – for most, the date on which they take their pension.

121. In question 18, we asked for comments on a potential issue that this approach could cause for certain members, leading to them paying more tax than may otherwise have been the case if the underpin was assessed for tax purposes on a year-by-year basis. This issue was described in paragraph 110 of the consultation document.

Consultation responses

122. 78 respondents commented on question 18, with many commenting on the tax approach generally, as well as on the particular issue question 18 sought views on.

123. Comments on the proposals were mixed. Many respondents, including most administering authorities, considered that it was the right approach to tax the underpin for the first time at the final underpin date. They noted it was consistent with the existing approach being taken by administrators and a number commented that they thought the number of members that would be affected by the issue described would be low. Some of these respondents also highlighted problems with the main alternative approach to taxing the underpin, which would see the underpin taken into account in a person’s annual allowance calculations each year. The main concern raised regarding this was that it would mean, in any given year, a qualifying member would be taxed on the basis of the pension that had the higher pension input amount in that year (i.e. career average or career average with final salary underpin). This would apply over the course of their career, potentially leading to higher overall tax liabilities. However, when they actually take their benefits, they would only receive the higher benefit calculated as being applicable in the year of their retirement.

124. A significant minority took an alternative view. They felt the approach we were proposing would be unfair to members, as it would concentrate multiple years of pension accrual in one pension input amount, and would only partially be offset by annual allowance carry forward^{[footnote 38]}. Some suggested there may be equalities issues with taking this approach, as it could disproportionately impact on the younger members due to the fact that they are, on average, more likely to have increases to their pension arising from the underpin. A small number felt the tax disadvantages arising from only considering the underpin for the first time at the final underpin date could be sufficient to mean that members should have the ability to opt out of receiving underpin protection altogether.

125. A number of respondents of all types highlighted the need for members to understand the impacts of the tax treatment, and suggested that the SAB lead on developing communications. It was noted that some members may need to take independent financial advice to understand their own position and that communications should refer to this. Some felt that, even with good communications, there would be a significant risk that members would not understand the implications and would potentially incur tax liabilities at retirement that they were not expecting.

126. Finally, a small number of respondents noted the absence of detail in the consultation document about how the underpin would interact with the lifetime allowance and requested clarification.

Our response

127. The government is grateful for the detailed responses on this matter, which have been considered carefully. Since our consultation was published in 2020, significant thought has been given to the McCloud remedy including in respect of tax. In addition to the passage of the PSPJOA 2022 through Parliament, Parliament has also given the government powers under section 11 of the Finance Act 2022^{[footnote 39]} to make regulations in relation to the tax impacts of McCloud remedy. In particular, the powers allow the government to make provision modifying pensions tax requirements in their application to members who are in scope of McCloud remedy. The changes to the lifetime allowance and annual allowance announced at Spring Budget 2023 will not alter the approach to the McCloud remedy.

128. Tax regulations under section 11 of the Finance Act 2022 were consulted on in late 2022^{[footnote 40]} and made on 6th February 2023 (‘the 2023 Regulations’)^{[footnote 41]}. These regulations set out the basic tax treatment that will apply in relation to the underpin.

129. In particular, they provide that any uplift to a member’s pension arising from the underpin is to be ignored in determining the value of the member’s pension growth for the purposes of the annual allowance. This is different to the approach we had proposed in our consultation, which would have seen the increased value in a member’s pension due to the underpin assessed at the point the member’s pension becomes payable. The government has decided not to proceed with that approach because it would have concentrated accrual of the underpin into a single year when, for most members, underpin protection would relate to multiple years of accrual. This could have triggered higher annual allowance liabilities than that member might have faced if the underpin had been assessed on an annual basis.

130. Any increase in the value of a member’s pension arising from the underpin is taxable for lifetime allowance purposes. This is different from the approach being taken for the annual allowance, reflecting that the lifetime allowance is designed to tax a member’s total pension rights (as opposed to the timing of the growth). As the underpin can influence the total value of a member’s LGPS pension, it is appropriate that the growth is taxable against the lifetime allowance as any other part of a member’s pension would be. Specific rules will apply in relation to lifetime allowance protections, designed to ensure members are not disadvantaged if the changes to the underpin we are making mean the value of their pension increases retrospectively^{[footnote 42]}.

131. The implementation of the approach to tax outlined in the 2023 Regulations may, in a small number of cases, mean a member has overpaid tax – for example, if they have paid an annual allowance charge in the past and part of that charge related to an increase in pension arising from the underpin. The PSPJOA 2022 and Directions issued by HM Treasury^{[footnote 43]} give LGPS administering authorities powers to pay direct or indirect compensation to beneficiaries in specific circumstances where there has been a tax loss (as defined in the legislation), and that loss cannot be corrected through the tax system – for example, because the tax year is out of scope. In our upcoming consultation, we will cover compensation in further detail and seek views on the provisions needed in LGPS regulations to adequately cover this issue.

132. A number of issues relating to the administration of the tax rules for the McCloud remedy remain under consideration, and further details will be provided by the government in due course. Although only a minority of members are likely to be affected, we recognise the comments made by consultees about the importance of communications on this issue and we will work with the SAB on developing communications for members to help individuals to understand the tax issues associated with the McCloud remedy, and the circumstances where they may be affected.

Key points

• Ensuring the tax implications of the McCloud remedy are fully understood and addressed is an important part of addressing the discrimination.
• The Finance Act 2022 gives the government powers to amend how pensions tax rules apply to members affected by the discrimination, and regulations were made in February 2023 providing for the government’s approach.
• The increase in a member’s pension arising from the underpin will be ignored for annual allowance purposes, but not for lifetime allowance purposes (except for in relation to Fixed Protection 2016).

Chapter 4 – Implementation and impacts

Public sector equality duty

133. In questions 19 to 22, we sought views on equalities matters associated with the proposals as well as the equalities impact assessment (EIA) we had undertaken and published alongside the consultation document^{[footnote 44]}.

Consultation responses

134. Question 19 asked if the proposals contained in the consultation adequately addressed the discrimination found in the McCloud case. 71 respondents replied to this question, 3 of which stated they didn’t know or were unqualified to respond. 66 thought the proposals did adequately address the discrimination, including 23 with reservations. 2 respondents said they thought the discrimination would not be adequately addressed.

135. Of the respondents who agreed that the proposals did adequately address the discrimination, some commented that they considered the extension of the underpin to be the most straightforward means of addressing the difference in treatment considered by the courts in the McCloud case and that the proposals were therefore a reasonable means of addressing the discrimination. Of the concerns expressed in responses to question 19, most were regarding three issues that have been discussed elsewhere in this government response:

• Underpin protection ending at an active member’s normal pension age, if earlier than 31 March 2022 (see paragraphs 25 and 30 to 32).
• Underpin protection not applying to those first joining the LGPS between 1 April 2012 and 31 March 2014 (see paragraphs 37 to 38 and 42 to 45).
• Whether scheme regulations should require that a member was in active service on 31 March 2012 to qualify (see paragraphs 46 to 48).

136. In relation to our EIA, a handful of respondents to the questions on equalities noted that final salary benefits tended to benefit certain types of member (e.g. long serving members with significant career progression) and that this could explain some of the age and sex based differences we had highlighted in the consultation document – for example, that active members between the ages of 41 and 55 as at 31 March 2019 would be more likely to have an increased pension arising from the underpin. Overall, of 54 respondents who responded to question 20 on whether they agreed with the EIA, 47 said they did, including 7 with reservations. 5 said they did not, and 2 said they were unqualified to respond.

137. Other points raised on the EIA included comments highlighting the lack of LGPS specific data available in relation to protected characteristics other than age and sex, and questioned whether this could detrimentally impact on the assessment undertaken for these characteristics. In the consultation we had noted some of the limitations around data and, at question 21, asked if respondents were aware of additional data sets that would help assess the potential impacts of the proposed changes on the LGPS membership. No suggestions for additional data sets were put forward.

138. In response to the equalities questions, a handful of respondents also made general comments that the government should have a key aim of minimising the risk of further legal challenge on equalities grounds in rectifying the McCloud case. This view was particularly held amongst administering authorities, having reasonable concerns about the potential administrative and resource impacts if further retrospective changes need to be made to the underpin in the future.

Our response

139. The government has considered the comments made on equalities in consultation responses. In relation to the substantive issues mentioned in paragraph 135, the government’s final approach and rationale on each is set out elsewhere in this document. The government considers the overall approach being taken forward in scheme regulations to be the best way of addressing the discrimination in the McCloud case, in line with the government’s obligations under equality law and the legal principle of minimum interference.

140. In line with the Public Sector Equality Duty, the government has reviewed its EIA on the basis of the final proposals, and this has been published as a separate document alongside this government response. In relation to age and sex, the EIA is based on analysis undertaken by the GAD based on LGPS data for the 2019 valuation of the scheme and is also attached as a separate document. The key points from the EIA are set out in the following paragraphs.

141. Age – The proposals outlined in this document are intended to remove age discrimination, which had been found to be unlawful in the firefighters’ and judicial pension schemes, from the LGPS rules governing the underpin. We consider that the changes proposed will significantly reduce differential impacts in how the underpin applies based on a member’s age, by removing the age-related qualifying criteria found to be unlawful by the Courts. Based on analysis undertaken by GAD on active membership data for the LGPS as at 31 March 2019, we anticipate that some indirect differences in how the underpin would apply to members of different age groups would remain. These are described below, along with our assessment of these differences.

142. Qualification for the underpin – GAD’s analysis shows that older active members on 31 March 2019 would be more likely to qualify for the underpin than younger active members. The proportion of members active in the scheme as at 31 March 2019 who had been members of the scheme on 31 March 2012 is lower for younger members, as experience shows they have a higher withdrawal rate from active scheme membership. We would also expect new entrants after 31 March 2012 to be younger, on average, than the average age of the total membership as at 31 March 2012. This is particularly the case as we move further from 31 March 2012, as more younger people enter the workforce. We consider that members joining the LGPS after 31 March 2012 do not need to be provided with underpin protection. Members joining the LGPS after 31 March 2012 fall into two groups:

a) members who joined after 31 March 2014 when the LGPS had already reformed to a career average structure, and

b) members who joined between 1 April 2012 and 31 March 2014, who joined the LGPS when it was still a final salary scheme, but when a well-publicised reform process was already underway.

143. In relation to both groups, it is the government’s view that providing them with underpin protection would not be appropriate. Transitional protection, as applied across public service pension schemes, was always designed to help members with the transition from the old scheme designs to the new (in the LGPS, mainly in relation to the move from a final salary to a career average structure). Members who joined after 31 March 2012 will have joined the LGPS when either it had already transitioned to the career average structure, or when it was well publicised that there would be reforms to LGPS benefits.

144. Members who benefit from the underpin – GAD’s analysis shows that active members between the ages of 41 and 55 would be more likely to benefit from the underpin (i.e. where the calculated final salary benefit is higher than the calculated career average benefit) than both their younger and older colleagues. This reflects previous experience and future expectation that:

• this group are more likely than older colleagues to experience the pay progression that would make the final salary benefit higher over the underpin period (bearing in mind that the career average accrual rate (1/49ths) is better than the final salary accrual rate (1/60ths) so above inflation pay increases are needed for the underpin to lead to an increase in pension), and

• this group are more likely than younger colleagues to remain in active membership until they receive the pay progression necessary for the underpin to result in an addition to their pension. Younger members are estimated to have a higher voluntary withdrawal rate than older members, and so would be less likely to remain in the LGPS until such time as they have the pay increases for the final salary benefit to be higher.

145. These differential impacts reflect the fact that final salary schemes typically benefit members with particular career paths (for example, they usually favour high-earners with long service). All local government pensions have accrued on a career average basis, without underpin protection, from April 2022 to ensure a fairer system applies to all service accruing now and in the future, and for all career paths.

146. Sex - GAD’s analysis shows that broadly the proportion of men and women who would qualify for the underpin protection and benefit from that protection matches the profile of the scheme. As at 31 March 2019:

• 74% of scheme members were female, and 26% male

• 73% of the scheme members who were estimated to qualify for the underpin protection were female, and 27% male

• 73% of the scheme members who were estimated to benefit from the underpin were female, and 27% male

147. Proportionally, GAD’s assessment is that men would be marginally more likely to qualify for the underpin and to benefit to a greater extent from underpin protection than women. This reflects the fact that, in line with previous scheme experience, the average male LGPS member would be expected to have higher salary progression than the average woman and that women are generally expected to have higher voluntary withdrawal rates than men. Members with longer scheme membership and with higher salary progression would be more likely to receive an addition to their pension through the underpin (i.e. where the final salary benefit is higher).

148. These small differential impacts also demonstrate some of the effects that can arise under a final salary design. From April 2022, all local government pensions accrual has moved to a career average basis, without underpin protection, to apply a fairer system to all future service.

149. Other protected characteristics - In relation to the data used to assess the impacts on protected characteristics other than age and sex (disability, race, religion or belief, gender reassignment, pregnancy and maternity, sexual orientation and marriage/ civil partnership), limited data specific to the LGPS in England and Wales is available. However, the government has used alternative data sources where appropriate to assess any differential impact in how the changes may apply. The government’s full assessment on each of these protected characteristics is set out in the equalities impact assessment published alongside this document. Overall, the government does not consider that the changes to underpin protection being made will result in differential impacts to members with and without these protected characteristics.

Communications

150. Question 23 sought views on the principles that should be adopted to help members and employers understand the implications of the proposals.

Consultation responses

151. 77 respondents commented on this question. In relation to members, respondents thought the main principle should be one of emphasising the robust nature of the remedy to give members confidence that the underpin will be accurately reflected in their entitlements and will be automatic and not based on individual claims. Some responses favoured targeted communications for different groups of members and views were expressed that communications strategies should use diverse means of explanation – for example leaflets, videos, and presentations.

152. For employers, respondents felt that communications should focus on practical data requirements. Messaging to employers should be clear, concise, consistent and take into account that some employers will be responsible for data collection for more than one fund and that the size and member profiles of differing employers will make the remedy a more difficult task for some employers than others.

153. The overall view was that communications should be consistent and clear across the LGPS for both employers and employees, and the development of standardised communications would be best led by the scheme advisory board (SAB).

Our response

154. Good communications will be crucial in ensuring that members and employers understand how the underpin changes may impact them, and any steps that need to be taken. A factsheet summarising the remedy for scheme members has been produced in collaboration with the SAB and has been published alongside this document.

155. The government recognises the important work that has already been done by the Local Government Association with the National Communications Working Group, such as the publication of McCloud remedy FAQs for members. We are supportive of the SAB and the Local Government Association continuing this work and will continue to work closely with them on McCloud remedy implementation.

Administration and guidance

156. In questions 24 to 26 we sought views on the administrative impacts of our proposals, including how cases should be prioritised and if there were any means by which the remedy could be simplified.

Consultation responses

157. Amongst responses to these questions, many respondents expressed their concerns regarding the administrative impacts of the remedy. In particular it was noted that the number of members affected and the complexity of the remedy task would mean there would be significant implications for both administration teams and employers. In particular, the difficulties around the collection of data needed to undertake underpin collections for qualifying members were highlighted. It was noted that for some employers, particularly smaller organisations without dedicated pensions resource, obtaining this data from systems and providing it to the pensions administrator could be very difficult.

158. In relation to prioritisation, 72 respondents commented that priority should be given to correcting pensions in payment, including correcting survivor benefits. It was suggested that the next most urgent consideration should be given to cases for those closest to the final underpin date and ill-health cases. However, there was also a view that in practice delivery will be led by software solution development. A small number of respondents suggested that there should be no prescription of case prioritisation with administering authorities able to decide their own case prioritisation based on member knowledge, size, and profile.

159. 52 respondents expressed views on potential means of simplifying the remedy, with most stating that this was impossible without compromising the underlying principle of eliminating the discrimination. However, 14 respondents considered that not requiring underpin figures on annual benefit statements would simplify the remedy and remove some of the administrative burden. Some thought that if underpin data was to be required on annual benefit statements there should be a lead in period of 12 months so that administering authorities can prioritise high-priority cases, whilst others thought that annual benefit statements were already complex and needed to be kept as clear and as simple as possible and that the introduction of the underpin figure would increase complexity and potentially add to members’ confusion.

160. In questions 27 and 28, we sought views on what issues should be covered in administrative guidance by the SAB and on matters where there should be a consistent approach to implementation of the proposed changes. 67 respondents responded, with the majority wishing to see centrally produced guidance, either issued by the Department or by the SAB.

161. In relation to data collection, some respondents commented it would be helpful for guidance to be provided to include tolerances and minimum thresholds where data is incomplete or to cover unusual situations such as where the data provider has changed or is no longer operating.

162. Other suggestions of topics for guidance included:

• Expected timescales for implementation by administering authorities
• Prioritisation for different member cohorts
• Specific topic guidance: including on past transfers, tax treatment, revisiting lump sum payments
• Pension fund accounting for external auditors

163. A handful of respondents commented that some of this guidance should be of a statutory nature to ensure a consistent approach is adopted across the scheme, but that guidance on practical matters would be better issued by the SAB.

Our response

164. We acknowledge the significant administrative impact the McCloud remedy will place on pensions and payroll administrators and are very grateful for the work funds and their employers are doing to collect data and put in place systems to commence work on the remedy. We encourage those responsible for LGPS funds to ensure sufficient resourcing plans are in place to enable administrators to be able to efficiently tackle the requirements of remedy, which will apply in addition to the business-as-usual activities of running the scheme.

165. Scheme regulations will be brought forward that extend underpin protection to younger qualifying members. These regulations will not come into force until 1 October 2023. We encourage administrators to continue taking the necessary steps in preparation for the new regulations, including working with their software providers to develop and test the necessary system changes.

166. We agree that oversimplification of the remedy process risks the realisation of the policy intent to remedy the discrimination. While removal of the underpin from annual benefit statements would reduce the administrative burden, existing legislation means that where a member qualifies for underpin protection the total valuation of their pension should include an estimate of the underpin (see paragraph 116). The government agrees with consultees that members need to be fully informed of their benefit entitlements but that ambition must balance with the requirement to keep the ABS accessible. As set out in paragraph 118, the government intends that information about the underpin will be included on ABSs for statements relating to the 2024/25 scheme year onwards.

167. The government understands that guidance will be a crucial part of ensuring a clear and consistent implementation of the remedy across the LGPS. We agree that statutory guidance may be more appropriate than SAB guidance in relation to some of the issues raised in consultation responses, but anticipate that SAB guidance will remain important. We will work with the SAB to set up a working group to consider the content of the statutory and SAB guidance needed in detail, including the topics which were raised in consultation responses. We anticipate the working group will include administrators, member and employer representatives so that a broad and diverse set of views can be taken into account in developing this. If statutory guidance is issued, this will be consulted upon for views before final publication.

168. National data collection templates and notes have been developed by the SAB and have been available on the national scheme administrator website since mid-2020. In March 2023, the SAB also published guidance^{[footnote 45]} for scheme administrators to assist with data issues they may face in implementing the McCloud remedy. We are very grateful for the significant work undertaken by the SAB secretariat in developing this guidance and for the contributions of the working group who supported its drafting.

Costs

169. Question 29 sought views on the potential costs of the McCloud remedy and any steps that should be taken to prevent increased costs being passed to local taxpayers.

Consultation responses

170. 75 respondents supplied views on this question with the majority stating that remedy cost will ultimately be met by employers and, for tax-backed employers, the cost will therefore fall back upon taxpayers.

171. Some respondents commented that the greatest remedy costs could fall to those employers with a younger member profile as there will be a longer period for the underpin to accrue. However, a number of respondents also reflected that the implications of increased employers’ contributions are likely to be limited for most employers as the costs will be spread over a long time period, and for many members, career average benefits will remain the most beneficial.

172. Some respondents voiced a concern that the inclusion of the remedy in the national cost management process could eliminate the previously expected benefit improvements following the initial results of the 2016 valuation of the scheme and that rectification of discrimination should be paid for by central government and not be viewed as a member cost.

173. In relation to the implementation of remedy, it was noted that administration, communication and software costs could be significant to administering authorities and the data collection costs could be significant to employers.

Our response

174. The government believes that the reformed schemes, of which most public service workers are already members, offer generous pension provision to public service workers, whilst also offering protection for the taxpayer against unsustainable costs. The Independent Public Service Pensions Commission made recommendations that led to the reformed schemes being established under the PSPA 2013, in line with the objectives of ensuring affordability and sustainability.

175. The government estimates that as a result of the changes we are making 1.2 million additional LGPS members will have underpin protection. Of the 675,000 LGPS members newly qualifying for the underpin who were active in the scheme as at 31 March 2019, it is also estimated around 18% of these members will receive an addition to their pension arising from the underpin. In our 2020 consultation, the GAD estimated that the cost to LGPS employers of its proposals to address the Court of Appeal judgement to remedy the discrimination would be £2.5 billion in coming decades. However, further refinement in the modelling in 2021 by GAD has led to a reduction in this figure and current estimates on the 2016 valuation basis are a future cost of £1.8 billion. The estimated costs are sensitive to the assumed rates of increases of the final salary benefits and consumer price inflation (CPI). This year, the government will be working with GAD to obtain an update to the estimate on the costs of McCloud remedy on the 2020 valuation basis.

176. The LGPS is a locally administered, funded scheme with local funding valuations taking place every three years to determine employer contribution rates. Employer contribution rates are, in most cases, determined on an individual employer basis, and take into account a number of factors, some related to the individual employer (such as membership demographics) and some related to the fund more broadly (such as the performance of fund investments since the previous valuation). As a result of this backdrop, it is not possible to say how the changes would impact employer contribution rates at future valuations. However, any fund or employer wishing to understand the potential impacts in more detail should speak to their fund actuary.

177. In relation to the administration and other implementation costs arising from the McCloud project, the government recognises the significant effort involved in implementing the remedy across local government pension funds. LGPS regulations give administering authorities the power to meet any costs, charges or expenses incurred administering the scheme from the fund itself, and we would encourage administering authorities to take the same approach with regard to any costs associated with the McCloud project.

178. A number of respondents raised concerns about the treatment of the McCloud remedy in relation to the cost control element of the 2016 scheme valuations. The government has separately set out its decision and rationale for its approach on this issue^{[footnote 46]}.

Key points

• Good communications will be vital to members’ and employers’ understanding of McCloud remedy and the government is grateful to the SAB and its working group for the work they have done so far and the work they are planning on developing a range of McCloud communications products.
• The administrative requirements of the McCloud remedy will be significant and funds should be putting in place resourcing plans to ensure administrators are equipped to tackle the additional work.
• The government will work with the SAB and a sector working group to consider the central guidance that will be necessary to help with local implementation and ensure a consistent approach across the LGPS.
• The government’s central estimate of the costs of McCloud remedy for the LGPS suggest a total cost in the coming decades of £1.8 billion. However, costs to individual employers will vary and will be based on local valuations, taking into account their memberships’ experience.

Annex A – Overview of remedy

This annex summarises the remedy to the McCloud discrimination described in this document. The remedy will be made through scheme regulations which will come into force on 1 October 2023.

The remedy will apply retrospectively, with the changes taking effect from 1 April 2014. The retrospective effect of the regulations means that the remedy may affect pensions paid and calculations performed between 1 April 2014 and 30th September 2023. These payments and calculations will need to be reviewed and potentially corrected to ensure the remedy is fully applied. This approach means that underpin protection will apply equally to members originally in scope of transitional protections and those who gain protection because of the remedy.

Underpin protection

The McCloud discrimination will be removed from the LGPS by extending underpin protection to younger qualifying members. Underpin protection was introduced on 1 April 2014 when the LGPS changed from a final salary benefit structure to a career average structure.

For the underpin period, members will receive an addition to their career average pension if their final salary pension over the same period would have been higher.

Qualifying criteria

Underpin protection will apply to qualifying members. A qualifying member is a member who:

• was active in the LGPS or another public service pension scheme on or before 31 March 2012
• was a member of the career average LGPS, and
• did not have a disqualifying gap in service (more than 5 years).

Underpin period

Underpin protection will apply in the underpin period. When an administrator compares a member’s career average benefits with the final salary benefits that would have built up, it is only benefits built up in the underpin period that it will compare.

The underpin period for a qualifying member’s pension account will run from 1 April 2014 to the earliest of:

• 31 March 2022
• the date the member leaves active service, or
• the day before the member reaches their final salary normal pension age (for most members, this will be age 65).

After the end of the underpin period, an active member will continue to accrue service in the career average scheme without underpin protection.

The underpin calculations

For most members, underpin calculations will involve two or three stages. At the first stage, on the underpin date, the administrator will calculate provisional figures. Those provisional figures will form the basis of:

• the final underpin calculation, generally done when the member takes their pension
• the calculation of adjustments to the survivor pension paid when the member dies.

In simple terms, the underpin will involve a comparison of the benefits the member built up in the career average scheme in the underpin period with the benefits they would have built up in the final salary scheme in the same period. Certain adjustments will be needed to make sure the benefits can be compared fairly. For example, the following will be ignored:

• any reduction in contributions when the member was in the 50/50 section of the scheme
• most transfers into the career average scheme
• any additional pension awarded by the employer or bought to boost the member’s pension
• AVC contributions.

Underpin date

A qualifying member’s underpin date for a pension account will be the earliest of:

• they date they leave active service
• the day before the reduction in hours or grade, if the member is taking flexible retirement, or
• the day before they reach their final salary normal pension age (usually 65).

On the underpin date, the administrator will calculate provisional figures:

• Provisional assumed benefits: the benefits the member built up in the career average scheme in the underpin period, after the adjustments mentioned above.
• Provisional underpin amount: the benefits the member would have built up in the underpin period, had they built up in the final salary scheme. The member’s final salary on the underpin date will be used to work out the provisional underpin amount, even if they don’t leave active service until later.

The provisional figures will include any ill health enhancement that falls within the underpin period, up to the member’s 2008 Scheme normal retirement age.

The provisional figures may give members an indication of how underpin protection will affect their benefits. However, there will be no change to their pension until their final underpin date.

Final underpin date

A final comparison of benefits will take place on a member’s final underpin date. For most members, this will be when they take their pension.

On the final underpin date, the type of benefit the member is taking from the scheme and the value of that benefit is known. Performing a final underpin check at this time ensures that the underpin is based on the type of benefit that is being paid and truly reflects the benefits that would have been paid from the final salary scheme.

Scheme regulations will provide that a qualifying member’s final underpin date is the earliest of these events:

• the day before they start to receive their pension (on normal age, ill health or redundancy grounds
• the day before the reduction in hours or grade, if the member is taking flexible retirement
• the date they transfer out
• the date they receive a trivial commutation payment in respect of their benefits.

How will the underpin change a member’s benefits?

The underpin will apply differently to qualifying members, depending on how their LGPS benefits are paid out. This section explains the rules that will apply when a qualifying member’s benefits are paid out in different ways.

Age retirement

When a protected member retires voluntarily between age 55 and 75, the administrator will calculate the LGPS benefits they are entitled to. They will then perform a final underpin check. The provisional figures calculated on the underpin date are adjusted to reflect the date of retirement and the member’s age on that date. Those adjustments may include:

• inflationary increases for the period between the underpin date and the final underpin date. Inflationary increases may even apply if the member is retiring from active status. This will happen if the member retires after their 2008 scheme normal pension age. Inflationary increases will also apply to the underpin amount if the final pay used to work it out is based on a period ending before the member’s last day of service.
• actuarial adjustments relating to the member’s age and based on the early or late retirement factors set out in actuarial guidance.

The provisional figures will be known as the final assumed benefits and final underpin amount after these adjustments.

If the final underpin amount is higher than the final assumed benefits, the difference is added to the member’s pension. The addition is known as the final guarantee amount.

Redundancy or efficiency retirement

A similar approach to the one described above for age retirements will apply when a member retires due to redundancy or business efficiency. The difference is that there will generally be no actuarial adjustment for early retirement.

Ill health retirement

If a protected member retires from active status with a tier 1 or 2 ill health pension, the provisional figures calculated on the underpin date will include any relevant enhancement to the member’s pension. The enhancement is relevant if it falls within the underpin period and before the member’s 2008 scheme normal retirement age.

If the member retires with a tier 3 ill health pension or retires from deferred status, no enhancement is included in the provisional figures.

The provisional figures are adjusted to reach final assumed benefits and final underpin amount. The provisional figures are increases by any inflationary increases that apply. If the member is retiring after their 2008 scheme normal pension age, actuarial increases will apply to the underpin amount.

If the final underpin amount is higher than the final assumed benefits, the difference is added to the member’s pension.

Special rules apply to a member who is paid a tier 3 ill health pension. These rules can complicate the operation of the underpin. You can read more in the later section covering Special cases.

Flexible retirement

The underpin will broadly offer the same protection to a member who takes flexible retirement as it does to a member who voluntarily retires.

If a member took flexible retirement before 31 March 2022 (and before their 2008 scheme normal pension age), they may build up more benefits during the underpin period after flexible retirement. A member taking flexible retirement may choose not to take all of the benefits they built up in the underpin period when they retire. If a member takes only a part of the pension built up in the underpin period, the regulations need to set out how that will affect any guarantee amount payable immediately and when the member takes the remainder of the benefits.

The government will consult on proposals for how the underpin will operate for a member who takes flexible retirement. This will aim to result in fair and consistent treatment of qualifying protected members. The new approach will reflect the fact that a member who takes flexible retirement:

• may have more than one underpin date
• may have more than one final underpin date in respect of the same benefits if they do not take all of their benefits built up in the underpin period when they first flexibly retire.

Trivial commutation

A qualifying member with a small LGPS pension may be able to receive a one-off lump sum instead of an ongoing pension under the trivial commutation or small pot payment rules.

If this type of lump sum is paid after the pension is in payment, the member will already have had a final underpin date. If their pension includes a final guarantee amount, that will increase the lump sum that they receive.

If a member takes a trivial commutation or small pot payment before the pension is paid, the payment date will be the final underpin date. The lump sum paid will be based on the pension that they would have been entitled to, including any final guarantee amount.

Transfer out

If a qualifying member transfers their benefits out of the LGPS, the calculation date of the transfer payment will be their final underpin date. On transfer, the cash equivalent transfer value (CETV) of the member’s benefits is paid to the new pension arrangement.

To ensure the value of the underpin is reflected in the CETV, LGPS administrators will need to calculate CETVs of:

a) the member’s total accrued rights in the LGPS (assuming membership of the career average scheme)

b) the provisional assumed benefits, including inflationary increases to date

c) the provisional underpin amount, including inflationary increases to date.

If the CETV of the provisional underpin amount c) is greater than the CETV of the provisional assumed benefits b), then the difference would be added to a) to reach the total CETV payable.

Special rules will apply when a qualifying member transfers their pension form one public sector pension scheme to another. You can find out more in the Special cases section below.

Special cases

As the sections above show, most qualifying members will have:

• an underpin date when provisional assumed benefits and provisional underpin amounts are calculated
• a final underpin date (which may happen on the same date) when the provisional figures are used as the basis of a comparison between the benefits in the career average and final salary schemes. Where the final salary benefits are higher, the pension or other payment being made is increased.

In this section we look at cases which do not fit this pattern.

Refunds

When a member leaves the LGPS without the right to a deferred or immediate benefit from the scheme, they are entitled to a refund of their contributions. If a qualifying member leaves with an entitlement to a refund, they will have had an underpin date on their date of leaving or on their 2008 scheme normal pension age.

If they complete a transfer to another pension scheme, the calculation date will be their final underpin date and the amount transferred will reflect their underpin protection, as set out in the ‘Transfers’ section above.

If the member claims a refund, this is not a final underpin date. The refund amount is calculated and paid as normal. In this circumstance, the member will have an underpin date but no final underpin date.

Death

A qualifying member who dies as an active or deferred member will have an underpin date but no final underpin date. You can read more about how underpin protection affects the benefits paid when a qualifying member dies in the ‘Underpin and survivor benefits’ section below.

Aggregation

A member may have multiple LGPS pension accounts. In certain circumstances, separate pension accounts may be joined up, known as aggregation. The government will consult on rules about how the figures calculated on an underpin date are treated when a member has multiple records.

Tier 3 ill health

When a member retires with a tier 3 ill health pension, they are awarded a temporary pension. It will stop after a maximum of three years, or it will be boosted to a tier 2 pension after a review. If a qualifying member is awarded a tier 3 pension, underpin protection will mean that:

• The member’s last day of LGPS membership will be their underpin date and their first final underpin date
• If the tier 3 pension stops after three years, after an employer review or because the member starts ‘gainful employment’, the member will become a deferred pensioner member. The member will have a further final underpin date in the future when a further final underpin amount and assumed benefits will be calculated. These will be based on the provisional figures calculated on the original underpin date.
• If the pension is boosted to a tier 2 ill health pension, the provisional figures calculated on the original underpin date will be re-visited if any of the ill health enhancement falls within the underpin period.

The underpin and survivor benefits

Following the death of an LGPD member, one or more of the following will be paid:

• a death grant
• a partner’s pension
• children’s pensions.

Death grants

Underpin protection will not change the death grant paid when an active member dies. This is because the death grant is based on the member’s pay.

Any death grant paid when a pensioner member dies is based on the pension that was being paid. If the pension includes a final guarantee amount, that will increase the death grant paid.

The death grant paid when a deferred member dies is based on the level of pension that would have been paid to the member. Any guarantee amount that would have been added to the member’s pension will be included when working out the death grant payable.

Survivor pensions

The pension payable to a survivor in the LGPS is a proportion of the pension the member has built up. However, any actuarial adjustment based on the member’s age at retirement is not reflected in a survivor pension.

Our scheme regulations will provide for the calculation of a survivor guarantee amount. This will be based on the provisional figures calculated on the member’s underpin date, increased in line with any inflationary increases that have applies since the that date. If the underpin amount is higher than the assumed benefits after this adjustment, the difference is the survivor guarantee amount. A proportion of the survivor guarantee amount will be added to the survivor pension. The proportion will depend on what type of survivor pension is being paid.

The public sector transfer Club

There are special arrangements to enable transfers between different public service pension schemes. Known as ‘Club’ transfers, the rules that apply are set out in the public sector transfer Club memorandum. When protected service is transferred between public sector pension schemes, that service will ‘inherit’ the protection offered by the new scheme. Benefits will only be protected if they were built up in the remedy period. For most schemes, the remedy period runs from 1 April 2015 to 31 March 2022, but it will start from 1 April 2014 for the LGPS in England and Wales. The Club memorandum will be updated to reflect the additional information that schemes will need to share when benefits are transferred to make sure members remain protected.

Club transfers in

When the LGPS receives a transfer of protected benefits, the member will be awarded with career average benefits that have underpin protection. The transferred benefits, combined with any LGPS benefits the member built up before the end of the underpin period, will be used in the provisional calculations performed on the member’s underpin date.

Club transfers out

When a member transfers protected LGPS benefits on Club terms, those benefits will acquire the protection provided by the receiving scheme. In most cases, this will be ‘deferred choice’ protection, meaning that the member will have a choice between final salary and career average benefits when they take their pension. At retirement, the protected LGPS service transferred will be combined with any other protected service the member has in that scheme and the member will make a single choice covering the whole protected period.

Pension sharing on divorce

When an LGPS member has a divorce or a dissolution of their civil partnership, a Court may order that their LGPS rights are split by issuing a pension sharing order. The Court uses a cash equivalent value of the member’s LGPS when valuing assets and deciding how they should be split. For a qualifying member, that cash equivalent value would be calculated as if it was a non-Club transfer (see above). This means that the value of the underpin, or an estimate of its value, would be taken into account by the Courts.

Any percentage split of the member’s LGPS benefits would be applied in line with the Court order. This could happen before or after the member’s underpin date or final underpin date. The government intends that any calculations related to a divorce or dissolution of a civil partnership will not change a member’s underpin date or final underpin date. However, the government will consult on further issues in relation to pension sharing and the underpin.

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1. Ministerial statement on Local Government Pensions. ↩

2. Independent Public Service Pensions Commission: final report by Lord Hutton. ↩

3. In this document, ‘LGPS’ refers to the LGPS in England and Wales. Changes to the underpin as it applies in LGPS Scotland and LGPS Northern Ireland have been consulted on separately: LGPS Scotland consultation (PDF, 879KB) and LGPS Northern Ireland. ↩

4. S.I.2014/525. ↩

5. Approved Judgment (PDF, 699KB). ↩

6. Public service pension schemes consultation: changes to the transitional arrangements to the 2015 schemes. ↩

7. Amendments to the statutory underpin. ↩

8. Ministerial statement on Local Government Pensions. ↩

9. Public Service Pensions and Judicial Offices Act 2022. ↩

10. ‘Excess teacher service’ is defined in section 110(2) of the Public Service Pensions and Judicial Offices Act 2022. It refers to pensionable service through which a member may have been entitled to membership of the LGPS or the Teachers’ Pension Scheme (TPS), depending whether they were a member of the legacy or reformed TPS in relation to their main post. ↩

11. A small proportion of members who had transferred into the LGPS from other parts of the public sector have a protected normal pension age of 60 under the final salary scheme. ↩

12. A continuous gap in service of active membership of a public service pension scheme of more than 5 years. ↩

13. See paragraphs 49 to 64 for more information on aggregation. ↩

14. Public Service Pensions and Judicial Offices Bill, Assessment of Impacts, page 1 (PDF, 261KB). ↩

15. The end of a member’s underpin period will be the earlier of 31 March 2022, the date the member leaves active service, or the date they reach their final salary normal pension age. ↩

16. Section 72 broadly requires that schemes do not contain rules which mean that leavers prior to normal pension age are treated less favourably than leavers at normal pension age. ↩

17. Independent Public Service Pensions Commission: final report by Lord Hutton. ↩

18. ‘Budget 2011’, HM Treasury, March 2011, Paragraph 1.132. ↩

19. Public service pensions: good pensions that last. ↩

20. In our next consultation, the government will seek views on whether members with pensionable service in another public service pension scheme before 1 April 2012 will need to transfer that into the LGPS for a member to benefit from underpin protection in the scheme. ↩

21. Economic activity and employment type for men and women by age of the youngest dependent child living with them in the UK. ↩

22. Regulation 4 of the Local Government Pension Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014, S.I. 2014/525. ↩

23. This was referred to as the ‘underpin crystallisation date’ in the 2020 consultation. ↩

24. Public Sector Transfer Club. ↩

25. Public service pension schemes consultation: changes to the transitional arrangements to the 2015 schemes. ↩

26. Paragraphs 98 to 99. ↩

27. Where members take payment of all the benefits they have accrued in the LGPS at the point of their flexible retirement. ↩

28. Where members take payment of only some of the benefits they have accrued at the point of their flexible retirement. ↩

29. Member benefits: lump sums: trivial commutation lump sum. ↩

30. Member benefits: lump sums: small pension payments. ↩

31. Paras A.58 to A.62 at Public service pension schemes: changes to the transitional arrangements to the 2015 schemes consultation (PDF, 851KB). ↩

32. Public Sector Exit Payment Cap. ↩

33. Para A.106. ↩

34. In this document, ‘DCU scheme’ means a scheme to which Chapter 1 of Part 1 of the PSPJOA 2022 applies. ↩

35. Paras A.107 to A.112 at Public service pension schemes: changes to the transitional arrangements to the 2015 schemes government response to consultation (PDF, 639KB). ↩

36. Simpler annual benefit statements: draft regulations and statutory guidance. ↩

37. The maximum amount of tax-relieved pension savings that can be accrued by an individual in a year. ↩

38. This allows members to carry forward any unused annual allowance from the previous 3 years. ↩

39. Section 11, Finance Act 2022. ↩

40. The Public Services Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023. ↩

41. The Public Service Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023. ↩

42. Further details set out in paragraphs 7.2 and 7.5 of the Guidance on the Public Services Pension Schemes (Rectification of Unlawful Discrimination) (Tax) Regulations 2023. ↩

43. Public Service Pensions and Judicial Offices Act 2022: Treasury Directions. ↩

44. Equality analysis for Local Government Pension Scheme (England and Wales) consultation – addressing unlawful age discrimination (PDF, 302KB). ↩

45. Service data for the McCloud remedy (PDF, 249KB). ↩

46. Update on the 2016 and 2020 Valuations. ↩