BMA to take govt to court over NHS pension concerns

The British Medical Association (BMA) Pension Committee has issued a letter before claim for Judicial Review proceedings against the government over the use of the cost control mechanism in the 2015 NHS Pension Scheme.

The letter from the BMA, a trade union and professional body for doctors in the UK, challenged the Public Service Pensions Directions 2021 made on 7 October 2021.

These directions gave effect to the government’s decision to lift the suspension of the cost control mechanism and to include the full costs of the McCloud remedy for the purposes of resuming the cost control mechanism and completing the 2016 valuation.

However, the BMA has argued that it is “wrong in principle” that the McCloud remedy cost should be borne by scheme members, arguing that, in the circumstances, it is “artificial for the government to present its solution as increasing the value of the scheme”.

"The true position is simply that the government is providing restitution for its previously unlawful discrimination,” it stated.

“Had it acted lawfully at the outset, the McCloud remedy would not have arisen and cannot properly be said to be an unexpected event of the type which the mechanism was intended to accommodate”.

The letter also claimed that there has been a failure to consider or consult upon the overpayment of contributions for the duration of the pause for some categories of scheme member and the loss of value in accrued pension benefits.

It also suggested that consideration had not been given to the "indiscriminate burdens and disadvantages" to particular scheme members, such as new joiners of the 2015 NHS Pension Scheme who could bear the cost of the McCloud remedy despite not being members at the time of the unlawful treatment.

Furthermore, whilst the BMA acknowledged there are concerns about the effectiveness of the cost control mechanism, as previously raised by the Government Actuary’s Department, it argued that these are “irrelevant to the current set of valuations”.

In light of the concerns, HM Treasury has been urged to “urgently acknowledge the defects of the 2021 directions”, and amend or revoke them to ensure that costs of the McCloud remedy are excluded from the cost cap cost valuation of the 2015 NHS scheme.

Commenting in response to the letter, a government spokesperson said: “We cannot comment on ongoing litigation.”

The government has been given until 3 December to respond formally.

The Fire Brigades Union (FBU) recently took similar action against the government, issuing a letter before claim for Judicial Review proceedings against the government at the start of the month.

    Share Story:

Recent Stories

Are current roads into retirement delivering member value?
Laura Blows explores HSBC Master Trust’s recent report, Converting pension pots into incomes, with HSBC Retirement Services CEO, Alison Hatcher.

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Making pension engagement enjoyable through technology
Laura Blows speaks to Nick Hall, business development director and Chartered Financial Planner at UK-based Wealth Wizards about the opportunities that technology provides for increasing people’s engagement with pensions and increasing their retirement wealth. Please click here for an edited write-up of the video

Pension portfolios – the role of asset-backed securities
Laura Blows is joined by Royal London Asset Management (RLAM) head of sterling credit research, Martin Foden, and its Senior Fund Manager, Shalin Shah to discuss the role of asset-backed securities (ABS) within pension fund portfolios
Incorporating ESG into fixed income
Laura Blows is joined by TCW head of fixed income ESG, Jamie Franco, to discuss incorporating environmental, social and governance (ESG) strategies into fixed income portfolios