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Pension Reform - The Remedy has been proposed

Discussion in 'News' started by diddydave, Jul 17, 2020.

  1. diddydave

    diddydave Established commenter

    https://www.gov.uk/government/consultations/public-service-pension-schemes-consultation-changes-to-the-transitional-arrangements-to-the-2015-schemes

    My Notes

    • · Everyone is moved to Career Average on 1 April 2022
    • · Only applies to those who joined before 1 April 2012.
    • · If you had service before 1 April 2012 and re-joined within 5 years it also applies.
    • · You can choose but it has to be for the whole period: 1 April 2015 to 31 March 2022, you cannot pick a date to move from one scheme to the other.
    • · There are two options relating to WHEN teachers have to choose which scheme to have their 2015-2022 service counted under:
      • Immediate Choice (IC) (though this won’t be until after 1 April 2022 at the earliest). It would be irrevocable. Will be time limited, 12 months is suggested.
      • Deferred Choice Underpin (DCU). To be chosen when you take the benefits
    • Flexibilities – page 39 onwards
    • Faster Accrual and Additional Pension. If the other scheme were chosen these would be converted to that scheme’s equivalent. Details are not provided on how this would be achieved. (A.14)
    • Early Buy out – only applies to the Career Average scheme so if Final Salary was ‘chosen’ the payments already made would be refunded. (A.19)
    • Contingent decisions (A.43) – where decisions were made on the basis of changing from one scheme to the other.
      • Require individuals to make their cases
      • Require back payment of employee AND employer contributions + interest
     
    install, letap and jonnymarr like this.
  2. diddydave

    diddydave Established commenter

    The questions that they invite answers to are:
    PensionsRemedyProjectConsultation@hmtreasury.gov.uk


    How to respond

    1.36 This consultation will run for 12 weeks and will close at midnight on Sunday 11 October. Responses can be submitted by email to:

    PensionsRemedyProjectConsultation@hmtreasury.gov.uk

    1.37 Alternatively, please send responses by post to:

    Pensions Remedy Project Team
    HM Treasury
    2/Red
    1 Horse Guards Road
    London
    SW1A 2HQ


    Question 1: Do you have any views about the implications of the proposals set out in this consultation for people with protected characteristics as defined in section 149 of the Equality Act 20109? What evidence do you have on these matters? Is there anything that could be done to mitigate any impacts identified?

    Question 2: Is there anything else you would like to add regarding the equalities impacts of the proposals set out in this consultation?

    Question 3: Please set out any comments on our proposed treatment of members who originally received tapered protection. In particular, please comment on any potential adverse impacts. Is there anything that could be done to mitigate any such impacts identified?

    Question 4: Please set out any comments on our proposed treatment of anyone who did not respond to an immediate choice exercise, including those who originally had tapered protection.

    Question 5: Please set out any comments on the proposals set out above for an immediate choice exercise.

    Question 6: Please set out any comments on the proposals set out above for a deferred choice underpin.

    Question 7: Please set out any comments on the administrative impacts of both options

    Question 8: Which option, immediate choice or DCU, is preferable for removing the discrimination identified by the Courts, and why?

    Question 9: Does the proposal to close legacy schemes and move all active members who are not already in the reformed schemes into their respective reformed scheme from 1 April 2022 ensure equal treatment from that date onwards?

    Question 10: Please set out any comments on our proposed method of revisiting past cases.

    Question 11: Please provide any comments on the proposals set out above to ensure that correct member contributions are paid, in schemes where they differ between legacy and reformed schemes.

    Question 12: Please provide any comments on the proposed treatment of voluntary member contributions that individuals have already made.

    Question 13: Please set out any comments on our proposed treatment of annual benefit statements.

    Question 14: Please set out any comments on our proposed treatment of cases involving ill-health retirement.

    Question 15: Please set out any comments on our proposed treatment of cases where members have died since 1 April 2015.

    Question 16: Please set out any comments on our proposed treatment of individuals who would have acted differently had it not been for the discrimination identified by the Court.

    Question 17: If the DCU is taken forward, should the deferred choice be brought forward to the date of transfer for Club transfers?

    Question 18: Where the receiving Club scheme is one of those schemes in scope, should members then receive a choice in each scheme or a single choice that covers both schemes?

    Question 19: Please set out any comments on our proposed treatment of divorce cases.

    Question 20: Should interest be charged on amounts owed to schemes (such as member contributions) by members? If so, what rate would be appropriate?

    Question 21: Should interest be paid on amounts owed to members by schemes? If so, what rate would be appropriate?

    Question 22: If interest is applied, should existing scheme interest rates be used (where they exist), or would a single, consistent rate across schemes be more appropriate?

    Question 23: Please set out any comments on our proposed treatment of abatement.

    Question 24: Please set out any comments on the interaction of the proposals in this consultation with the tax system
     
    letap likes this.
  3. letap

    letap Occasional commenter

    Diddydave,
    Thank you very much for this, and I know this has been said before, but many thanks for your sterling contributions to the retirement thread.
     
    Mrsmumbles, install, ukpaul and 2 others like this.
  4. ridleyrumpus

    ridleyrumpus Star commenter

    What's this about?
     
  5. shevington2

    shevington2 New commenter

  6. shevington2

    shevington2 New commenter

  7. janepailing

    janepailing New commenter

    I’m 53. Does this mean I will be going back to my final salary pension and able to get all benefits from 60 instead of a portion at 67? Will my lump sum increase too? Would really appreciate it if you could let me know how this will affect me?
     
    install likes this.
  8. andywhizz1

    andywhizz1 New commenter

    My understanding is that you will be able to have final salary and lump sum entitlement for another 7 years ie April 2015 until April 2022. You would be entitled to this final salary pension from 60.Any future pension payments will be on the career average which although you can access earlier will only pay out in full if you take in at 67. Please correct me if I am wrong.
     
    install likes this.
  9. diddydave

    diddydave Established commenter

    It means you can choose to go back to the Final Salary - from what I have seen almost everyone will be doing that - though there could be circumstances where it isn't the best option.

    At 53 you have a mixture of schemes (so long as you started before 2012).

    From 2015 you were moved into the CARE scheme.
    You will be able to choose to have the period from 2015 to 2022 counted in either the Final Salary OR CARE schemes. By then you will be 55.

    From April 2022 you will start the CARE scheme.

    So if you retire at 60, in 2027, you will have most of your pension in the Final Salary scheme and 5 years in the CARE scheme. In that sense the getting the benefits at different times is the same as it is now it's just that you can get a bigger proportion at 60, and yes, your lump sum will be bigger too.
     
  10. diddydave

    diddydave Established commenter

    Short version;
    • Pension changed in 2012
    • Went from Final Salary (FS) to Career Average (CA)
    • Existing teachers were moved from FS to CA depending on their age between 2015 and 2022
    • Union won court case that this was age discrimination
    • Government has to remedy this
    • Government publish their proposals...the link at the top.
     
  11. janepailing

    janepailing New commenter

    Thank you so much for making that clear.
    It still seems a bit off that I can’t stay on the final salary though- what is the reasoning behind changing everyone to the CARE scheme in 2022? It’s very confusing.
     
    install likes this.
  12. janepailing

    janepailing New commenter

     
    install likes this.
  13. diddydave

    diddydave Established commenter

    After 2022 there is no final salary scheme for anyone.

    The reasoning is very simple. It is more expensive because people are living longer.

    Used to be that you'd retire at 60 and draw your pension for about 10 years and die. (1970)
    Now, with life expectancy about 10 years higher (2020), if you retire at the same time you'd be paid twice as much in pension payments.
     
    install likes this.
  14. janepailing

    janepailing New commenter

    It just seems odd to me. I understand the financial reasons but if it was discriminatory to change me onto the new scheme surely it will still be in 2022?
     
    install likes this.
  15. diddydave

    diddydave Established commenter

    Easy mistake to make.

    The new scheme is not discriminatory, it is discrimination because older member did NOT have to change to it at the SAME time as younger ones. By changing it so that everyone, no matter what their age is, moves to the new scheme on 1 April 2022 there is no discrimination.
     
    install likes this.
  16. ridleyrumpus

    ridleyrumpus Star commenter

    If you are 53 at the moment then your normal retirement age will be 67 not 60
     
    install likes this.
  17. ridleyrumpus

    ridleyrumpus Star commenter

    Are there any calculators out there to help you make a decision?
     
    install likes this.
  18. shevington2

    shevington2 New commenter

    If you consult the pension advisors for your Union(see their web sites for which company they are linked to) then you should be able to receive some financial advice It is likely they will have calculators.
     
    install likes this.
  19. install

    install Star commenter

    Thank you for this. Do you know if it’s still possible to ‘freeze’ one’s pension ?
     
  20. install

    install Star commenter

    Thanks @diddydave for creating this thread. It is very helpful ;)
     

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