Govt consults on Teachers' Pension Scheme changes

The Department for Education has launched a consultation on proposed changes to the Teachers’ Pension Scheme (TPS), which look to address the age discrimination identified in the McCloud case.

The 2018 McCloud ruling found that changes made to firefighters and judges' pension schemes had been discriminatory, with the government later confirming that this would apply to all public sector pension schemes.

In light of this, the government has proposed closing the final salary section of the TPS to all remaining members.

Under the proposals, both sections of the legacy scheme would be closed to further accrual on 31 March 2022, with all remaining active members of the legacy scheme then moved into the new scheme on 1 April 2022.

Members transferring to the new scheme will retain a salary link to the legacy scheme, so that their accrued final salary scheme benefits are calculated using their pensionable pay at retirement rather than the point of transfer.

A further consultation relating to the second part of the government's McCloud remedy is expected in 2022, which will provide members with a choice of benefits for the period 1 April 2015 to 31 March 2022.

The draft regulations are being consulted on at the same time as the Public Service Pensions and Judicial Offices Bill progresses through parliament, in an effort to ensure that upon becoming an act, the necessary scheme rule changes can be enacted for 1 April 2022.

Similar consultations are also underway in regards to a number of public sector pension schemes, including the NHS Pension Scheme and Civil Service pension schemes.

However, the government is also facing potential legal action in light of its proposed McCloud remedy, with the Fire Brigades Union, British Medical Association, and GMB Union launching judicial reviews in light of concerns that members will bear the cost of the remedy.

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