28th June 2019 Rosalind Connor comments in FTAdviser on The Court of Appeal’s ruling against the government’s leave to appeal in judges’ and firefighters’ pension cases
In December, The Court of Appeal ruled that changes to the pension schemes introduced in 2015 were unlawful on age, sex and race discrimination grounds.
The government applied for permission to appeal to the Supreme Court, but this application was refused on Thursday because it did not raise an arguable point of law.
The Supreme Court refused the appeal because the government failed to “raise an arguable point of law”. The decision covered two cases for judges’ and firefighters’ pension claims.
Rosalind Connor commented: “The Court of Appeal ruling on this matter had far-reaching effects for government policy on pensions, and so it was expected that the government would appeal. Without leave to appeal, the government is faced with implementing the ruling.”
“The government has followed what has been common practice in the private sector when closing defined benefit pension schemes – It is accepted that the effects of pension scheme closure are often hardest on those closest to retirement, who don’t have time to save enough to make up the difference, particularly when leaving a final salary scheme, where the last few years are the most valuable. As a result, many employers have tended to give a ‘softer’ close to those members closest to retirement, where they continue in the more generous scheme for a period longer than the younger members.
“In this case, the court held that there was not sufficient justification for this softer close, so the government must approach a close in a different way, possibly reversing some significant steps taken to reduce the cost of public sector pensions by moving younger staff out of the final salary schemes.
“Ironically, the step taken in both professions towards diversity have added another argument against the government in this case. Because of those steps, there are a greatly increased number of younger members who are woman and/or Black, Asian and minority ethnic. This added another argument that the differentiating between younger and older members was indirect sex and race discrimination, as the vast majority of those benefiting from the more attractive pensions for older workers were white men.”
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