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Unlawful firefighter pension changes will now apply across public sector

16 July 2019

Elizabeth Truss, chief secretary to the Treasury, has confirmed the recent Supreme Court ruling that changes made to firefighter’s pensions in 2015 were discriminatory will apply to all public sector schemes.

Under the 2015 changes, workers 10 years from retirement were protected from reforms which saw younger workers moved to less generous pensions.

The policy will apply across the NHS, civil service, local government, teachers, police, armed forces and judiciary.

Commenting on the statement Jon Greer, head of retirement policy at Quilter, estimates this will create a new funding gap of several billion.

Greer said: “Truss says the Government will be trying to control costs and so it’s likely they will want to move everyone onto the 2015 basis for future accrual as soon as possible.

“This needs to be worked through and means that the younger members are entitled to have their benefits ‘levelled up’ so that they are treated as having the same protection as the older members, until a non-discriminatory amendment can be made.

“The cost to the Government is significant since they will have to provide pre 2015 members with higher benefits for a longer period than expected and it’s not clear that the full cost has been factored into the £4bn cost approximation or if indeed there will be an even bigger hole in the new Prime Minister’s pockets.

“Arguably this will feel like a bigger pensions headache for the new Prime Minister than the tapered annual allowance relative to the NHS. But perversely at the same time there is a risk the judgement exacerbates that issue if senior NHS staff are awarded compensation.”

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