Consultation outcome

‘McCloud’ remedy in the LGPS – supplementary issues and scheme regulations: government response

Updated 8 September 2023

Introduction

1. In recent years the government has been taking steps to address the findings of the McCloud case^{[footnote 1]} in public service pension schemes. In that case, the Court of Appeal found that transitional protections the government had given older members of the public service pension schemes when schemes were reformed in 2014 and 2015 had unlawfully discriminated against younger members on grounds of age.

2. In the Local Government Pension Scheme in England and Wales (LGPS), we are addressing the McCloud discrimination by extending ‘underpin’ protection to the younger members of the scheme whom the courts found had been treated unlawfully. In the LGPS, the underpin is the means through which transitional protection was provided to older members.

3. All LGPS members were moved to the reformed, career average scheme on 1 April 2014, but for older protected members, the pension payable was underpinned against what they would have built up in the legacy final salary scheme. The extension of the underpin was the government’s preferred option for addressing the difference in treatment in the LGPS when we consulted on this matter in 2020 with most stakeholders also agreeing with this approach.

4. After detailed consideration and consultation, the government introduced a bill into Parliament in the summer of 2021, and in March 2022, the Public Service Pensions and Judicial Offices Act 2022 (the 2022 Act) received Royal Assent, providing the framework within which the McCloud discrimination will be addressed.

5. Following the 2020 consultation, we published a government response in April 2023 setting out how we would proceed, how the remedy would work and including a general overview of the approach we were taking. We also confirmed we would be consulting again in order to consider some issues associated with the remedy.

6. Between 30 May 2023 and 30 June 2023, we sought further views on issues relating to the McCloud remedy, where we had said we would reconsult or where our initial consultation in 2020 did not address an issue which had subsequently been considered by the government. The consultation also sought comments on a draft of the regulations and on equalities issues.

7. The policy matters we sought general views on were as follows:

• aggregation – determining the rules applicable to decide whether a member with multiple LGPS memberships has underpin protection in some or all of these
• club transfers – determining the rules applicable to decide whether a member with previous membership of another public service pension scheme has underpin protection in respect of their LGPS membership
• flexible retirement – how the underpin should work in respect of flexible retirement, particularly for cases of ‘partial’ flexible retirement, where a member does not take all their accrued career average benefits
• divorce – how the scheme’s divorce and underpin calculations interact
• injury allowances – how a retrospective increase to a member’s pension arising from McCloud remedy may impact any injury allowances payable

8. In a few other areas, the policy approach had been determined and we sought technical comments and comments on implementation:

• excess teacher service – the retrospective admission to the LGPS of certain teachers who have multiple employments
• compensation – the circumstances where a member may be paid compensation where they have suffered a loss relating to the age discrimination found in the McCloud case or the McCloud remedy
• interest – the interest terms that will apply where payments are made later than would have been the case, due to the McCloud discrimination.

Consultation responses

9. Our consultation closed on 30 June 2023 and there were 27 responses. Most responses were from LGPS administering authorities, although we also received responses from software suppliers, actuarial advisors, employers, the Local Government Association and one from an individual.

10. Consultation responses were carefully considered, and the following chapter summarises the comments received on each topic and outlines how we intend to proceed.

Next steps

11. We are now taking steps towards making our regulations to address the McCloud discrimination. We expect these will come into force on 1 October 2023 and enable administering authorities to continue their detailed and important work on the remedy. We are mindful that a significant amount of work lies ahead for LGPS administrators, software suppliers and advisors, and are grateful for the engagement of the sector as we have developed our proposals in recent years. We are particularly grateful for our continued close working with the Local Government Association on the McCloud remedy, which has been invaluable over a number of years.

12. As set out in the April 2023 government response, those responsible for the running of administering authorities should ensure they have sufficient resourcing in place to effectively deliver the McCloud remedy.

Prioritisation

13. In the period after the regulations come into force, a range of McCloud-affected cases will need to be considered by LGPS administrators. To encourage a broadly consistent approach from the start, we will be providing initial guidance on how McCloud cases should be prioritised to administrators through the Local Government Association shortly. Administering authorities should consider this in determining how to take forward their McCloud work. We intend to include guidance on prioritisation in statutory guidance on the McCloud remedy.

Guidance

14. In the course of the work on the remedy (including in responses to our most recent consultation), a number of issues where national guidance could be helpful have been identified. As set out in the consultation document, we have set up a national guidance working group to consider McCloud guidance in more detail. Where topics for statutory guidance are identified, we intend to undertake a technical consultation on draft guidance with selected stakeholders representing those affected.

15. The government believes guidance for the implementation of the McCloud remedy in the LGPS should be statutory where it is necessary to achieve a consistent approach on an important aspect of the McCloud remedy and that certainty is not already provided through the regulations. Our view is that other national support, such as worked examples, is better provided through non-statutory guidance. Non-statutory guidance will also be easier to amend and update over time. We will consider with the Scheme Advisory Board and the Local Government Association who is best placed to issue any non-statutory guidance.

16. We are also working closely with the Government Actuary’s Department on aspects of the remedy where updated actuarial guidance will be needed, which we understand is particularly important for software development, and intend to issue this as soon as possible.

Further regulations

17. In addition to guidance, we have identified a number of areas where we believe further regulations relating to the McCloud remedy will be needed – for example, to effectively implement the remedy for excess teacher service. We will work with lawyers on developing these regulations and intend to undertake a technical consultation on these with selected stakeholders representing those affected in due course.

Our proposals – responses

Aggregation

18. In question 1, we asked for views on the rules that will apply where a member has multiple employments under the scheme. We proposed a different approach to our original proposals. Under our new approach, members who had multiple LGPS employments would not have to join up or ‘aggregate’ these to qualify for underpin protection, where they would not otherwise meet the underpin qualifying criteria.

19. This approach would mean that, where a member was in active service in the LGPS on or before 31 March 2012, and they did not have a disqualifying gap^{[footnote 2]}, they would have underpin protection on their LGPS service in the underpin period. This would be the case even if the service in the underpin period is in a different LGPS membership, unaggregated from the membership they were in on or before 31 March 2012. The consultation also set out details of the rules that would apply where a member with underpin protection on their LGPS service later leaves and rejoins or has concurrent membership.

20. 25 of 27 respondents commented, with 24 supporting our approach, principally on the basis that the proposal was seen as fair to members and consistent with the current underpin regulations. The respondent who disagreed with the proposal had concerns about the additional administrative burdens that this approach would create and these concerns were shared by other responses that were otherwise supportive (although some supportive responses did also note that requiring aggregation would also be administratively challenging). Particular concerns were raised about how administrators would identify members affected by this change and some queried whether the national LGPS database could be amended so that it could be used to more easily identify members who qualify for underpin protection from unaggregated service.

21. Statutory or national guidance was also requested by some respondents and two particular areas for guidance came up multiple times – guidance on identifying members in scope and administrative guidance/ examples for complex cases (for example, where a member may have multiple underpin dates).

22. Our response – our regulations will implement the approach outlined in our consultation, which we believe is fair to members and avoids some of the significant legal and practical complexities of introducing an aggregation requirement at this stage. We will consider what guidance could helpfully cover on aggregation with the guidance working group but intend to issue statutory guidance on the steps administrators should take to identify members in scope of underpin protection. Administrative guidance and examples for complex cases may be better covered in non-statutory guidance, which will be easier to update and amend, and which we believe is more appropriate than statutory guidance.

23. We understand that the Local Government Association intend to amend the national LGPS database to help administrators identify which of their members may qualify for underpin protection from previous unaggregated LGPS membership.

Previous public service pension scheme membership

24. In question 2, we asked for views on our proposed approach regarding members who had moved into the LGPS from other public service pension schemes. In line with the approach being taken in other schemes, we had set out that members would not need to have transferred that previous membership into the LGPS to qualify for underpin protection in the LGPS. Instead, if an LGPS member had membership of another public service pension scheme on or before 31 March 2012 and did not have a disqualifying gap^{[footnote 3]}, they would have underpin protection on their LGPS service in the underpin period (even if the previous service was not transferred to the LGPS).

25. 25 of 27 respondents commented, with 23 agreeing with our proposals. A number of supportive responses noted that our proposal was consistent with the wider approach being taken in the public sector. However, there were also significant concerns expressed by 20 otherwise supportive respondents around the administrative burden of this broader approach and trying to retrospectively apply it to members who have already joined the scheme. In particular, administrators were concerned that, if a member has not transferred in previous public service pensions membership and did not inform the administering authority when they joined the LGPS of the previous membership, administrators will not know if that person is entitled to underpin protection. The two responses which disagreed with our proposals also had concerns that arose from the significant administrative difficulties in identifying members.

26. The Local Government Association and a few other responses highlighted in response to this question or question 15 that giving members underpin protection on their transferred public service pension scheme membership could potentially disadvantage certain members, being those who:

• were in the scope of either full or tapered transitional protection in their original public service pension scheme, and subsequently
• transferred final salary membership that was built up in the underpin period to the LGPS (or do so before 1 October 2023)^{[footnote 4]}.

27. These responses said that there may be circumstances where it may be better for a member in this situation to retain the final salary benefit on the transferred service rather than have that final salary benefit replaced with a career average benefit that attracts underpin protection, as we had proposed would apply. Some noted that this could mean a member faces a reduction to a pension in payment and queried if compensation should apply in such cases.

28. Other comments made under this question include:

• that statutory guidance on the steps that should be taken to identify if a member was entitled to underpin protection should be issued
• the government should consider if data sharing between public service pension schemes is possible to make the identification of members easier
• that an updated version of the memorandum for the Public Sector Transfer Club^{[footnote 5]} to reflect the McCloud remedy is needed promptly so that software systems and administrative processes can be updated to reflect the new requirements

29. Our response – the government intends to proceed on the proposals we outlined in our consultation. We are grateful for the detailed comments on this issue, and in particular note the concerns raised by respondents about the challenges identifying members in scope of underpin protection where they have not transferred in their previous public service pension scheme membership. The government believes that processes for identifying relevant members is an issue that should be covered in statutory guidance and we will discuss the content of that guidance with the guidance working group.

30. We will consider if data sharing between public service pension schemes could be a practical tool to help identify members who qualify for underpin protection based on their prior public service pension scheme membership. The government is also working on an updated version of the Club memorandum to take into account the McCloud remedy and this will be published as soon as possible.

31. Regarding the concerns raised by the Local Government Association and others (paragraph 26), the government has considered this issue carefully. We agree it is possible that there may be rare circumstances where members who had transitional protection in their original pension scheme and subsequently transferred to the LGPS could be worse off as a result of this change in approach (that is awarding underpin protection to transferred service that was protected in the previous scheme, instead of final salary benefits). Whilst underpin protection is designed to give members the ‘best of both’ schemes for a protected period, the timing of members’ pay rises may mean that, in individual cases, it could be better for a member to have final salary membership for part of the underpin period, as well as underpin protection for another part. Specifically, if a member had a significant pay rise after joining the LGPS, it may be that a final salary pension on the transferred service, plus underpin protection on the LGPS service, may give them the better overall outcome than underpin protection for the whole period.

32. However, if we were to protect members in this situation, we could treat them better than their younger colleagues and create a difference in treatment based on age. This is because the potential detriment we describe can only affect members who were originally in the scope of transitional protection (and who are therefore older). We therefore believe it is right to proceed with the change we have outlined as we believe it is the fairest approach to remedy generally.

Flexible retirement

33. In question 3, we sought views on a proposal that, where a member takes flexible retirement before 31 March 2022 or their final salary normal retirement age (if earlier), they should accrue underpin protection for the membership after their flexible retirement, for the remainder of their underpin period. 25 of 27 respondents commented, with 24 of these agreeing with the proposal. Of those who explained why they agreed with the proposal, most mentioned that it was consistent with the wider remedy approach and therefore would ensure the remedy applies fairly to all members. The respondent who disagreed with the proposal explained that members are taking an active decision to flexibly retire and that therefore they should not have underpin protection after taking that decision.

34. In question 4, we sought views on a proposal that, where a member takes ‘partial’ flexible retirement, there should be multiple final underpin dates to assess the value of the benefits being taken at different stages. 25 of 27 respondents commented, with 24 of these agreeing with the proposal. Supportive responses mentioned that it seemed a fair approach which was consistent with the wider remedy but some did express concerns about its complexity. Some respondents requested statutory or other national guidance to help administrators deal with complicated cases. The respondent who disagreed with the proposal thought the approach was excessively complicated.

35. Our response – on both questions concerning flexible retirement, our regulations will implement the proposal we consulted on. We believe it is a fair and proportionate approach, which is consistent with the way the remedy is being applied to LGPS members in other circumstances. We agree that for partial flexible retirement cases in particular, these could be very complicated, and note the requests for national guidance to assist with these cases. Whilst we agree that national support would be helpful on this, in line with the approach we set out in paragraph 15, our starting point is that statutory guidance is not normally the best source for administrative guidance or examples.

Divorce

36. In question 5, we sought views on our proposal for how cash equivalent values should be calculated in cases of divorce and dissolution of civil partnerships. 26 of 27 respondents commented, with all who commented agreeing with the proposal. A small number, particularly software suppliers, requested actuarial guidance on this at the earliest opportunity.

37. In question 6, we sought views on a technical amendment to the underpin calculations to prevent the possibility of negative underpin figures occurring, which could be difficult to explain to members. We set out our view that this would have no impact on the results of underpin calculations. 25 of 27 respondents commented and all who did agreed with the proposal.

38. Our response – on both the matters we consulted on regarding divorce, we are proceeding with our consultation proposal. We will work with the Government Actuary’s Department to issue actuarial guidance on divorce and dissolution cases as soon as possible.

Excess teacher service

39. In question 7, we sought comments on the approach provided for in the 2022 Act regarding members with ‘excess teacher service’, an issue that affects some teachers who have had periods when they were in both full-time and part-time employment. 22 of 27 respondents commented, with all of these commenting that this is a complex part of the remedy. Many of these responses said that they felt that the government’s solution was overly complex, particularly given that this is a relatively small group of members, and that a different approach should have been taken. Two responded to say they felt the approach was the right one, in spite of the challenges. One alternative approach that was mentioned a number of times was that excess teacher service should be pensionable in the TPS for the 1 April 2015 to 31 March 2022 period.

40. Other points that came up in response to question 7 were:

• there are challenges of transferring data and collecting missing data for these members, and potentially software developments will be needed in relation to this group
• there is a need to agree workable processes between Teachers’ Pensions and the LGPS to help limit the administrative difficulties
• the excess teacher service remedy presents communications challenges and will be hard for many members to understand
• central support and guidance is necessary regarding these members, and the cross-scheme working mentioned in the consultation document is positive

41. In question 8, we sought suggestions for areas where specific regulations would be needed in relation to excess teacher service. 19 of 27 respondents agreed that there should be regulations on this issue. Particular points raised were as follows:

• that regulations should not be overly detailed, and the normal operation of the LGPS Regulations 2013 and the LGPS (Transitional Provisions, Savings and Amendment) Regulations 2014 should apply as far as possible
• that excess teacher service members who are retrospectively rolled back into the LGPS should not be allowed to transfer in previous rights, as they would have had this opportunity to do so in their time in the TPS
• that excess teacher service members who are retrospectively rolled back into the LGPS should not be allowed to retrospectively opt-out, join the LGPS 50/50 section or purchase additional pension

42. Our response – the government recognises the strength of feeling on this issue and notes that, as with many aspects of the McCloud remedy, there are significant complexities in seeking to fairly implement a retrospective remedy to the courts’ findings in already complex pension schemes. As excess teacher service involves the interaction between two pension schemes, the LGPS and the TPS, the remedy has particular complications which do not arise for other issues. The approach we are taking will see the LGPS become the appropriate pension scheme for excess teacher service for the period up to 31 March 2022 in most cases and the government believes this is the right policy, in line with the wider principles being adopted for McCloud remedy.

43. We continue to work with the Department for Education, TPS administrators, the Local Government Association (LGA) and a group of LGPS administrators to consider issues relating to excess teacher service, including the transfer of data between the two schemes. Where relevant, communications regarding the process that will apply for this group will be shared with LGPS administrators via the LGA. We plan to discuss what guidance may be needed in relation to excess teacher service with the guidance working group.

44. We are grateful for the respondents that commented on the regulations that may be needed in relation to this group. As outlined in paragraph 17, we intend to undertake a consultation later this year on further regulation changes relating to McCloud and we plan that this will include draft provisions relating to excess teacher service. These will be developed taking into account the comments made.

Compensation

45. In question 9, we sought comments on the government’s approach to compensation in relation to McCloud. 22 of 27 respondents had comments, with a number noting compensation within the LGPS was expected to be rare. 20 responses requested national guidance or other central support to help ensure consistency in how the issue of compensation is approached and applied in the LGPS. Some also requested central guidance on the circumstances where compensation could be payable in an LGPS context, as it was unclear based on the legislative framework alone.

46. 5 responses set out a view that it was unfair that local funds were expected to meet the costs of compensation and that these costs should be met by central government instead.

47. Our response – we note the strong desire in responses for central guidance to assist with cases of compensation and intend to discuss this in more detail in the guidance working group. In particular, we note the requests for greater clarity on the circumstances where the government believes direct and indirect compensation could apply in the LGPS, based on the provisions in the 2022 Act and in the accompanying HM Treasury directions.

48. In relation to how individual compensation applications should be considered, we note there is already a strong central framework set out in HM Treasury directions within which decisions must be made. In particular, direction 33 sets out the factors that administering authorities must consider in making decisions on whether to pay compensation. Direction 42 sets out the information that must be provided to an administering authority as part of an application for compensation, as well as the information that must be provided to a member after consideration of an application. It will need to be considered what LGPS specific guidance could helpfully add on these aspects of the compensation process.

49. In relation to the costs of compensation, we have considered the concerns raised but believe that, in a funded scheme, it is most appropriate that costs relating to pensions are met from pension funds. Cases of compensation are expected to be very rare and we do not expect the costs arising to be significant at a local level.

Interest

50. In question 10, we sought comments on the government’s approach to interest for backdated payments in respect of McCloud remedy. 18 of 27 respondents had comments, with most of these concerning the complexity of having bespoke interest terms for the McCloud remedy. Some queried why the government had taken this approach when the LGPS has its own interest terms under regulation 81 of the LGPS Regulations 2013, and noted the approach could delay the availability of software for the McCloud remedy as software for the McCloud interest terms would need to be developed. On the use of the ‘mid-point’ date for calculating interest for some purposes, some respondents noted that this was helpful and would reduce some of the complexity.

51. A small number of respondents also queried if there was an inconsistency between the interest table included in the consultation document (paragraph 71) and the draft regulations in annex A, concerning the interest period applicable for:

• retrospective additions to lump sums (including pension commencement lump sums, death grants and trivial commutation payments), and
• retrospective additions to transfers out

52. Our response ­­– the interest provisions which will apply in relation to backdated McCloud payments have been set centrally through HM Treasury directions, so that the same interest rates shall apply to members of all public service pension schemes who have been affected by this court case. The government believes this is the right approach. The specific interest rates applicable were determined taking into account a number of factors, and the rationale for the government’s approach is described more fully in a letter from HM Treasury to the Government Actuary’s Department (PDF, 201 KB) which was published alongside the HM Treasury directions in December 2022.

53. Regarding the issue mentioned in paragraph 52, there was an inconsistency between the consultation document and the draft regulations and we are grateful to those who noticed this for highlighting it. The consultation document was accurate, meaning that the interest period applicable for retrospective additions to certain lump sums, including death grants, trivial commutation payments and transfers out is the period ‘from the date the original payment was made to the date of the payment of the addition’. Our final regulations have been updated to reflect this.

54. Since our consultation, we have refined our proposed approach to interest for additional pension commencement lump sum (PCLS) payments arising from the McCloud remedy. Additional PCLSs may arise where a member is entitled to a higher pension as a result of McCloud remedy and elects to convert some of that pension to lump sum. As the increased pension and / or lump sum will constitute a new benefit crystallisation event (BCE) for tax purposes, we believe it is most appropriate that the amount of the PCLS is determined based on the rate of pension applicable at the time of the new BCE. For this reason, applying interest on the PCLS backdated to the original retirement would be inappropriate as the PCLS would be calculated at a ‘present rate’ which would include uprating, based on the Consumer Prices Index, allowing for the period since that earlier retirement. Under our final regulations, interest will therefore only apply to an additional PCLS for the period from the new BCE to the date of payment of that PCLS.

Injury allowances

55. In question 11, we asked for views on the approach we had proposed for injury allowance payments. In paragraphs 72 to 75 of the consultation, we had set out our view that specific regulations would not be needed in relation to cases where members qualified for allowances under the Local Government (Discretionary Payments) (Injury Allowances) Regulations 2011 (‘the 2011 Regulations’) and were also affected by the McCloud remedy.

56. 18 of 27 respondents responded to this question. Of those who responded, all agreed with our proposed approach with a number commented that it seemed a sensible way of dealing with these cases. No respondents disagreed with our approach. It was noted by some respondents, particularly administering authorities, that injury allowance payments are very rare and three administering authorities mentioned that they did not have any such cases.

57. Our response – We will proceed on the basis of our consultation proposal and our remedy regulations will not include specific provision regarding these members. These cases are rare and, as set out in the consultation, where there are cases, administering authorities may wish to consider whether to re-visit funding for past payments with their affected employers.

Equalities

58. In the consultation, we had provided a link to the government’s equality impact assessment (EIA), published in April 2023, on the LGPS McCloud remedy and asked respondents two questions regarding the equalities impacts of the McCloud remedy. Question 12 asked for comments on the EIA. Question 13 asked if respondents were aware of additional data sets that would help us assess the impacts of the McCloud remedy on the LGPS membership.

59. In response to question 12, 22 of 27 respondents did not have any comments. Of the remainder:

• two expressed disappointment that, in their view, a full EIA was not possible due to a lack of suitable data. These respondents asked the department if it could consider how it can support the LGPS in providing this data for future consultations
• one said they were content with the data used in the EIA, as all readily available data sets had been considered
• one noted that the changes would appear to apply equally to all
• one expressed a view that local discretionary decisions could impact different protected groups

60. In response to question 13, no respondents were aware of additional data sets that would help us assess the impacts of the McCloud remedy. Two commented that additional data on protected characteristics was not held by administrators, with one of these suggesting that employers may hold additional protected characteristics data but this may also not be complete.

61. Our response – the government is grateful for the responses on the equalities impacts of our proposals. Whilst we recognise the concerns expressed by some respondents regarding the data that is available on other protected characteristics, we believe the data from the Annual Population Survey 2021 to 22 that has been used for the characteristics of race, disability, marital status and religion is a good match for the LGPS. The LGPS is a very large pension scheme with a membership spread across a number of workforces, and we believe that using the public sector workers category of the Annual Population Survey, which has a large sample size and which is compiled from interviews for the Labour Force Survey along with additional regional samples, gives us a close proxy for the LGPS overall.

62. In line with feedback from consultees, we do not believe there are currently readily available alternative data sets that we could use for our analysis for other protected characteristics. Going forward, the department will consider its responsibilities under the public sector equality duty in the usual way as and when changes to the scheme are being proposed and made. This will include consideration of the appropriate evidence to be used to evaluate the equalities impacts of those changes.

63. The operation of the underpin will be set out in regulations and there will not be local discretion in how the provisions apply to affected members. For this reason, we do not consider that matters of local discretion will affect how the underpin applies to different groups.

64. The government’s final equality impact assessment in relation to the McCloud remedy we are implementing in scheme regulations has been published alongside this government response and is available here .

Draft regulations and other comments

65. In question 14, we sought comments on the draft regulations attached to the consultation that were drafted to deliver the McCloud remedy. 15 respondents provided comments and we are grateful for the time and consideration that was given to the draft provisions, particularly given their breadth and complexity. Comments received covered a range of issues, and a number of technical and drafting improvements have been made to the final SI to reflect some of the comments made.

66. In question 15, we sought general comments from consultees on the McCloud remedy in the LGPS. Reflecting the nature of the question, a range of points were raised in responses to this question, including:

• general concern with the administrative complexity of the remedy, with a number of respondents particularly highlighting that the original discrimination was not the fault of scheme employers or those working in the LGPS locally
• concern that the regulations are being made so close to 1 October 2023, giving very little lead in time for software suppliers and administrators, and raising the prospect of administrators having to undertake manual calculations for a period of time. There were also concerns about the timing of statutory and actuarial guidance
• suggestions that work should be undertaken at the national level on communications relating to the McCloud remedy
• comments about the cases of potential detriment for transfers from other public service pension schemes mentioned in paragraph 27
• one response from an individual which queried why the consultation did not cover the interaction between the LGPS McCloud remedy and cases of ill-health

67. Our response – the government is grateful for the points raised in response to this question and we respond to each of the points outlined above as follows, respectively:

• in taking the decision to implement transitional protections at the time of public sector pensions reform in 2014 and 2015, the government at the time thought this was the right approach. However, since the Court of Appeal’s December 2018 judgment that the protections were unlawful, the government has taken steps to actively address the discrimination in a fair and proportionate way. Whilst this will have some significant administrative impacts for those working in the LGPS, particularly in the coming two years, we believe it is unavoidable. Oversimplification of the remedy process would risk failing to achieve the policy intention of remedying the discrimination. 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. We are confident this puts the scheme in a strong position to deliver the McCloud remedy effectively and efficiently
• we understand frustration at the short period between our remedy regulations being made and them coming into force on 1 October 2023. The McCloud remedy project has been a significant cross-government workstream and there has been substantial complexity in seeking to develop fair and proportionate proposals for addressing the discrimination across a variety of different member situations. The government’s work on the remedy has also included the passage of the 2022 Act through Parliament, which was essential to give departments the powers to address the case robustly in respect of their own individual schemes. Whilst the remedy will come into force on 1 October 2023, the delivery of the remedy to affected members will extend over the period after this date. The government is considering how cases should be prioritised and is circulating a draft policy to all LGPS administrators (see paragraph 13)
• on communications, the Local Government Association’s national communications working group is considering what template and sample communications should be produced in respect of the LGPS McCloud remedy and details of this work will be shared with LGPS administrators through the Local Government Association mailing list
• our response to the transfers issue raised by some respondents is set out in paragraphs 30 to 32. In relation to the respondent who queried the lack of information about ill-health, our 2020 consultation had dealt with the interaction between the McCloud remedy and ill-health. Further detail on the government’s approach to such cases can be found in Annex A of our government response which was published in April 2023.

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1. The Lord Chancellor and Secretary of State for Justice v McCloud & Others [2018] EWCA Civ 2844 ↩

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

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

4. The current LGPS regulations provide that where a member transfers in final salary membership from another public service pension scheme and there has not been a disqualifying gap in service, they are awarded a final salary benefit in the LGPS. ↩

5. A document that provides the detailed rules for transfers of benefits between public service pension schemes, where a transfer meets certain requirements to be a ‘Club’ transfer ↩