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Thursday 25 July 2019

July pensions update

By Lucille Thirlby
pensions-847

Assistant General Secretary discusses the latest on same sex couples' survivor benefits, the McCloud and Sergeant judgement, and civil service pensioners' overpayment letters.

Same sex couples' survivor benefits

First, some great news: same sex couples are set to benefit from the Government's response to the Supreme Court Walker judgement.

Previously, survivors of a civil partnership of same sex marriage had their survivors' benefits restricted. They were only entitled to benefits based on accruals from December 2005 onwards. The Supreme Court decided that this restriction should be lifted, and the Government agreed.

A Written Ministerial Statement has been issued, clarifying the Government's position. It states: "following the court ruling, the Government has decided that in public service schemes, surviving male same-sex and female same-sex spouses and civil partners of public service pension scheme members will, in the majority of cases, receive benefits equivalent to those received by widows of opposite sex marriages.

"The exception to this may be in specific schemes where, in the past, improvements in female members’ survivor benefits have led to increased contributions. Departments will consult on and take forward changes as soon as possible. Schemes will notify their members of changes and any actions they need to take."

The FDA is negotiating the detail of how this decision will affect the civil service. This includes looking at the historical scope and extent of who will benefits, so that the changes in policy can be implemented as soon as possible. We will keep our members updated on progress.

Additionally, we will be urging reform for those members in the civil service scheme who are in a long term “common law” relationship, whose surviving partners would receive no survivor pension regardless of sexual orientation following the Brewster judgement.

McCloud and Sargeant judgements

The Government has been denied leave to appeal to the Supreme Court on the McCloud and Sargeant judgement.

The judgement deemed that "transitional protection" introduced in April 2015 led to unlawful discrimination for judges and firefighters. The matter has now been remitted to the Employment Tribunal (ET). It will be for the ET to decide how it will manage the remedy hearing.

A Written Ministerial Statement was issued by Liz Truss (then Chief Secretary to Treasury). In it, she sets out the Government’s approach to the Court’s decision and admits that it affects all public service pension schemes.

In the last week, there has been a meeting of the Civil Service Pensions Scheme Advisory Board and the Joint Superannuation Committee, both of which have FDA representation, where the approach to the decision has been discussed.

Additionally, the TUC and public service unions have met with Treasury officials to discuss the Government’s approach. This has been crucial, as the Treasury has overarching responsibility for all public service pensions schemes that the judgement impacts upon. We did so with a view to developing engagement with unions. Presently it is not clear what the outcomes will be and if or how the tapered and full protections will be unpicked to roll back the discrimination.

The FDA is calling for a scheme by scheme approach, due to different schemes across the public sector. However, as the same or similar unlawful protections were applied to civil service, firefighters and the judiciary, the FDA can rely on McCloud and Sargeant going forward and would not need to submit claims to Employment Tribunal to secure pension scheme change. 

Given the complexity of these issues, and the fact that currently there is no clear timeline for the ET process, unravelling these issues is likely to take some time, but we will keep members updated as soon as we know more.

Civil service pensioners' overpayment letters

The FDA has been advised that 540 Classic pension scheme members have received letters from MyCSP relating to a reduction in benefits and a potential reclaim of overpaid benefits.

Following a 2016 Internal Control framework Review (ICFR), MyCSP identified that since 2012 (when MyCSP took over administration) it failed to act on 200,000 revision notifications. Moreover, pre-2012, the previous administrators had also failed to review and process a further 100,000 revision that required revisions of benefits as well. Of the 300,000, 13,000 required changes to benefits in payment, with the 540 resulting in reduction in benefits and potential reclaim of overpaid benefits. The FDA and other civil service unions had not been informed of these prolonged contractual failures to act on trigger notifications and are raising our concerns with the Cabinet Office.

A pension scheme member can as with all overpayments set out, if appropriate, why they feel recovery action will be inappropriate, particularly if it would result in financial hardship. If you are an FDA member (current, associate or retired) and have received such a letter and wish to receive advice and support please email pensions@fda.org.uk.

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