When the Local Government Pension Scheme (LGPS) changed from a final salary scheme to a career average scheme in 2014 (known as CARE), older, and longer serving, members were protected from the changes. These protections are known as ‘the underpin’, and work by comparing benefits in the old final salary scheme to the benefits in the new career average scheme. The member receives the benefit which is the highest.
In 2018, the Courts found that younger members had been discriminated against because the protections did not apply to them. This ruling is called the McCloud judgment, after a member involved in the case.
Due to this ruling, there will be changes to all public service pension schemes that provided transitional protection, including the LGPS. The changes are called the McCloud Remedy and are intended to remove the age discrimination found in the McCloud court case. The changes apply from 1 October 2023.
The McCloud Remedy essentially extends the underpin to all members who meet the criteria, outlined below, regardless of age.
Underpin protection only applies to pensions built up in the remedy period (1 April 2014 to 31 March 2022). The protection stopped earlier if you left the Scheme or reached your final salary normal retirement age (usually 65) before 31 March 2022.
There’s no underpin protection from 1 April 2022 onwards. Pensions built up after this date are based on the career average scheme only.
Your LGPS pension is protected by the McCloud remedy if:
- you were a member of the LGPS or another public service pension scheme before 1 April 2012
- you were a member of the LGPS in the remedy period between 1 April 2014 and 31 March 2022
- you were under age 65 in the remedy period, and you have not had a disqualifying gap.
Due to the time constraints your pension records have not yet been tested to see if you are affected by the judgment. The Cheshire Pension Fund will seek to carry out a test as soon as we can, if the results show that you would be entitled to an increase, we will inform you accordingly.
Please note: Most members will be unaffected by the McCloud remedy and for those that are, any benefit increase is likely to be modest. You do not need to contact us. If you are affected, we will let you know.
You can find more information on the LGPS website – https://www.lgpsmember.org/mccloud-remedy/
Including a video, FAQs, key dates, and more in-depth information about the case.