McCloud, What Happens Next?

By David Scholey, Regional Manager South East and East.

On 1 April 2012, the government announced that on 1 April 2015 it was introducing new pension schemes across the public sector.  The purpose was to reduce the cost of pensions to the taxpayer.  It was stated that those existing personnel who were generally within ten years of normal pensionable age on their existing scheme would not be transferred onto the new schemes.  For the armed forces this generally means that anyone born on or before 1 April 1967 would have what is known as Transitional Protection.   Several organisations challenged this ruling on the grounds of age discrimination.  The Employment Tribunal ruled in the case of ‘McCloud’ that this was indeed so and ordered the government to remedy the situation across the whole of public sector.  Not all people are eligible for the Remedy.  To be eligible one must have been in service on or before 31 March 2012 and also on or after 1 April 2015.  The governments remedy is that for the period of service accrued between the date of introduction of the new schemes, 1 April 2015 and 31 March 2022, the individual will be given the choice over which scheme that service would be on; legacy or AFPS15.  All service for all personnel regardless of age will be on AFPS15 from 1 April 2022 going forward, no matter their choice for the ‘Remedy Period’

There are remaining a few policy issues with the Remedy and the Treasury has ordered all departments to have those policy issues rectified by October 2023.  Therefore, it is likely that the Remedy will not be put into practice until that time.  Anyone who leaves the service on immediate benefits before October 2023 will be discharged under the present arrangement of AFPS15 since 1 April 2015 and Legacy for service prior to then.  From October 2023 those people will be contacted with an offer of reverting the Remedy Period back onto their legacy scheme.  Both choices will be fully detailed in the offer at the time.  Their choice will be backdated.  Any tax bill which arises from a choice will be down to the individual.  From October 2023 all personnel leaving on immediate benefits will be given the choice as they leave the service. For those leaving at any time who are not due immediate benefits such as pension or EDP, they will be given the choice when the first of those deferred pensions are put into payment.  This method is known as Deferred Choice Underpin.  To assist people with coming to a decision on which choice is best for them, a new ‘Interim AFPS Calculator will replace the existing pension calculator some time in 2022.  Nobody must make any choice over the Remedy before October 2023.  For further assistance in understanding your AFPS options contact your local White Ensign Association representative.