"Continuing to resist the full implications of the judgment in Court would only add to the uncertainty experienced by members."
The Court ruled that the changes, which meant workers 10 years from retirement were protected from reforms which saw younger workers moved to less generous pensions, "gave rise to unlawful age discrimination".
Under the 2015 changes, workers 10 years from retirement were protected from reforms which saw younger workers moved to less generous pensions.
As ‘transitional protection’ was offered to members of all the main public service pension schemes, the government believes that the difference in treatment will need to be remedied across all those schemes. This includes schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and fire and rescue workers.
Initial estimates suggest remedying the discrimination will add around £4bn per annum to scheme liabilities from 2015.
In a written statement Elizabeth Truss, chief secretary to the Treasury, said the government "respects the Court’s decision and will engage fully with the Employment Tribunal to agree how the discrimination will be remedied.”
"Continuing to resist the full implications of the judgment in Court would only add to the uncertainty experienced by members."
Jon Greer, head of retirement policy at Quilter, commented: “As the two remaining Tory party candidates battle it out for the final week they are pledging anything that will win over party members, including to fix the NHS pensions allowance crisis if they are brought to power. This is, however, a pension issue that may pale into insignificance compared to the £4 billion a year public sector funding gap they need to plug thanks to a monumental mistake presided over by the coalition government.
“Today Elizabeth Truss confirmed that, following the Supreme Court judgement that reforms to judges and firefighters pension schemes was unlawful, the government will now have to remedy the policy across other public sector schemes including the NHS, civil service, local government, teachers, police, armed forces and judiciary.
“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.”
