McCloud age discrimination remedy - update

This week has seen a major step in the implementation of the McCloud age discrimination remedy with the Public Service Pensions and Judicial Offices Bill laid before Parliament on 19 July. The Bill amends the Public Service Pensions Act and its equivalent in Northern Ireland, making provision to rectify unlawful discrimination in the way in which schemes were reformed in 2015 (2014 for the LGPS in England and Wales) and includes retrospective measures. As expected, it confirms the remedy period as covering membership from the date of reform 1 April 2014 to 31 March 2022 for eligible members.

For the LGPS (referred to as Chapter 3 schemes in the Bill), the Bill enables LGPS regulations to make provision for final salary benefits to be paid in respect of the remedy period (1 April 2014 to 31 March 2022), i.e. it is the enabling legislation which will allow the LGPS regulations to implement the McCloud remedy by extension of the underpin. Our understanding is that draft LGPS regulations are expected by the end of 2021.

No implementation date is specified for the LGPS, the recent Written Ministerial Statement said that the Government’s intention is that regulations for the LGPS will come into force on 1st April 2023.

The Bill can be accessed at

Separately, HM Revenue and Customs has published a draft amendment to the Finance Act 2004 along with policy paper ‘Pension Scheme Pays reporting: information and notice deadlines’ at which extends the period within which a member can opt to use Scheme Pays to pay their annual allowance charge for previous years. This will ensure they have a minimum of three months after the date of notification of a change in their pension scheme input amount to give notice that they wish to use Scheme Pays. This legislation is intended to provide a route to deal with tax charges arising as a result of the McCloud remedy. The measures will come into force from 6 April 2022 but will apply retrospectively to 6 April 2016.