NHS and Public Sector Pensions: How we can help you make the right choices about McCloud

EPC can assist individuals impacted by the UK Government’s changes to Public Sector Pension Schemes, known as the McCloud decision. They offer guidance on the “Remedy Period,” explain the options available to members, and provide comprehensive analysis to help individuals make informed decisions about their retirement benefits. The services include validating scheme information (using pension calculator), comparing different remedy options and identifying refund of tax eligibility.

Understanding the Remedies for Public Sector Pension Changes

The government is now remedying a decision they made in 2015, by reverting all members back into the 1995/2008 pension scheme for the seven-year period from April 2015 to March 2022. All members will then join the 2015 pension scheme from April 2022 regardless of age.

The Government has released legislation which sets out how public sector schemes should action the remedy and the timing for doing so because your pension statements issued over the past 7 years are incorrect.

We can explain your position and help you understand the impact of this remedy, provide you with details of the different choices on offer and how they impact on you personally.

We will provide a clear analysis of your data to enable you to make an informed decision about your pension and your retirement benefit choices.

Reformed Public Sector Pensions

This case study outlines an example of how we can help individuals understand their retirement position within the public sector which has gone through significant change in recent years. We can help retirees and members of the public sector schemes make informed decisions about their retirement benefits.

The UK Government’s changes to Public Sector Pension Schemes was declared as unlawful discrimination, known as the McCloud decision (2018).

The changes had affected members of the NHS, Local Government Pension Schemes (LGPS), Civil Servants Teachers, among others, with membership in the new scheme based on age.

The government responded in two ways. They established a “Remedy Period” from 1 April 2015 to 31 March 2022. During this period, members affected by the enforced membership will have the option to treat their service as if they were still in their original schemes.

This will necessitate recalculations of Pension Savings Statements and amendments to HMRC notifications regarding Annual Allowance charges. Also potentially Lifetime Allowance charges if you retired during the Remedy Period.

New Pension Savings Statements will be provided by October 2023 (probably landing in Nov/Dec 2023) and retired members will be reimbursed for any difference in pension payable following the recalculation – and that could be you.

Where a scheme administrator needs to send a pension savings statement to a member, they will have until the later of either:

  • 6 October 2024
  • 6 months after either an election is made or the end of the election period if the member has an ‘immediate choice’ because they were a pensioner or died before ‘rollback’.”

All members will join the new CARE scheme from 1 April 2022, eliminating discrimination – but, bringing in another element into the pension equation.

Subsequently, the budget in March 2023 also brought in annual allowance offsetting – which could be beneficial for members accruing in both schemes and the significant change to the lifetime allowance for retirees from 23/24 tax year.

And finally, those members who did opt out of the pension scheme (as a result of this discrimination), may have the opportunity to opt-back into the pension scheme as part of this remedy.

How am I able to make a decision on what is in my best interests?

We can help you by ;

  • Checking and validating the information you receive from the scheme
    Provide a comparator of having the Remedy Period treated as if you were under the old scheme
  • We will confirm if you are due a refund in respect of the reclaim years within the legislation
  • We will provide an overview of your position taking account of your total incomes from all sources and assess if you were caught by tapering rules.

How we can help

Peter and John have experience of helping IFAs with public sector clients who need specialist help, or indeed work directly with NHS/public sector employees to help them better understand their options. If you would like to discuss how we could potentially support you or your client, please do get in touch – we are always available for a virtual coffee.

Contact us

We love dealing with difficult and complex pension questions.
And we are always up for a virtual coffee chat. Drop us a line anytime.