Firefighters’ Pension Scheme: Opt-out Contingent Decisions

In 2014 and 2015, the previous Government reformed public service pension schemes. These reforms introduced “transitional protections” that allowed members closest to retirement to remain in their legacy schemes rather than move to the reformed schemes. In December 2018, the Court of Appeal found that these protections in the judicial and firefighters schemes constituted unlawful age discrimination: the McCloud and Sargeant judgments.

To remedy this, Parliament enacted the Public Service Pensions and Judicial Offices Act 2022. The Act gives affected members a choice between legacy and reformed scheme benefits for the period 1 April 2015 to 31 March 2022 and permits certain pension decisions to be revisited where they would have been made differently but for the discrimination.

However, an unintended consequence has arisen for firefighters who opted out of their pension scheme because of the discrimination. The Act fixes the “relevant legacy scheme” in legislation. As a result, some affected members cannot be reinstated into the actual legacy scheme in which they last accrued service, preventing them from buying back opted-out service and leaving them without a full remedy.

To resolve this, the Government will use the Act’s special-case power to amend regulations with the effect of disapplying sections 4(2) and 4(3) for the particular cohort of eligible members who opted out due to the discrimination and who now elect, under section 5 of the Act and regulation 6 of the Firefighters’ Pensions (Remediable Service) Regulations 2023, to buy back opted-out service between 1 April 2015 and 31 March 2022—the remedy period. This will mean that opted-out service within the remedy period can be treated as pensionable service in the last-accrued legacy scheme.

The Government will now bring forward a statutory instrument under the Act’s special-case power to correct this position and will do so as soon as parliamentary time allows.

[HCWS1479]