How will the judges’ and firefighters’ case impact pensions?
Sometimes, legal changes creep up on us when we are looking the other way. When, in December 2018, the Court of Appeal decided in favour of the judges and the firefighters in their claim of age discrimination regarding the changes the government had made to their pensions, in Lord Chancellor v McCloud and others, no one thought much of it. It was expected that the government would appeal to the Supreme Court and the whole issue would settle down again.
Then, in June 2019, we learned that the government had been denied permission to appeal to the Supreme Court; so, the decision that the government had been unlawfully discriminating on the basis of age holds as the final word on the matter.
This is causing concern for businesses, as what the government did is what many employers do in closing down their final salary pension schemes: give more favourable terms to older people, recognising that these employees are much more affected by a closure of a scheme.
The judgment does not mean employers cannot give more favourable terms to older people, just that the way that the government did it was not acceptable.
This might mean, however, that employees start looking at whether they can make a complaint; the British Medical Association is already reportedly considering taking action about how its final salary scheme was closed in the light of this decision. The question arises, then: might private-sector employees do the same?
Historically, the focus when pension schemes are closed has not been the unequal treatment of employees, but this is likely to change. At the same time, employers that have already closed generous pension arrangements may find themselves having to dust off the reasoning behind their decisions, in order to defend against any future attack.
Partner Rosalind Connor
Read Rosalind’s article in Employee Benefits
The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.