CIRC 037: PENSIONS CHALLENGE: THE 2015 PENSION SCHEMES AND AGE DISCRIMINATION

Circular 134/2017 advised members that the POA intended to initiate Tribunal proceedings alleging that the introduction of the new “alpha” pension scheme for prison officers, and the new 2015 NHS Pension Scheme for secure psychiatric workers amounted to unlawful age discrimination. Those proceedings were successful, and the purpose of this circular is to update members on the current position following that success.

The primary objective: reverting to “legacy scheme” terms

The so-called legacy schemes are the pension schemes that existed before 2015 – the Classic, Classic Plus, Premium and Nuvos Sections of the Principal Civil Service Pension Scheme for prison offers, and the 1995, 1998 and 2008 Sections of the NHS Pension Scheme for secure psychiatric workers.

The core allegation in the proceedings was that the way the 2015 Schemes were introduced was age-discriminatory. The 2015 Schemes are not discriminatory in themselves, but the transitional arrangements were: older members who were in service on 31 March 2012 and who were within 10 years of retirement age on that date did not have to transfer to the new 2015 schemes. Younger members did, either on 1 April 2015 or after a few months or years of so-called “tapered protection” depending on their age. 

The POA was the only Civil Service union to bring these claims. The Fire Brigades Union and Defence Police Federation launched similar claims for their members, and a large number of self-funding judges, police officers and others made claims for themselves.

These claims were all successful. The Tribunals have made declarations that the Claimants are entitled, if they so choose, to be treated as continuing members of their legacy scheme when they retire or leave the service before retiring. Following these victories, the Government announced that it would apply the same outcome to all public service pension scheme members, whether or not they had filed a Tribunal claim.

There are a number of important points to note:

  • The members who can claim the right to revert to legacy scheme terms are the members who were already in service on 31 March 2012. Anyone who joined the Service on or after 1 April 2012 had to join or transfer to the new schemes from 1 April 2015, regardless of their age. They were therefore not discriminated against.
  • What has been won is the right to choose legacy scheme terms, not the automatic transfer to legacy scheme terms.

This is important because in some cases the 2015 scheme terms are better than the legacy schemes. That is particularly the case for the Nuvos Section of the Principal Civil Service Pension Scheme and the 2008 Section of the NHS Pension Scheme. It is also often the case for members who retire early on the grounds of ill-health and also receive an injury pension because their illness or injury was work-related.

You do not have to be concerned about having to make a choice now. You will be told what your options are when you retire or leave the service if that is earlier. In most cases it will be obvious which is more financially advantageous.

  • This choice will only apply to the part of your pension that you built up from 1 April 2015 (or your tapered end-date if you were taper protected) and 31 March 2022. The reason for the 31 March 2022 cut-off is that the Government closed the legacy schemes to all members, regardless of age, on that date.

We will continue to press the case for an earlier pension age for all members, but the likelihood is that the final closure of the legacy schemes on 31 March 2022 is lawful.

  • You should not assume that this means you must continue working until you reach your State pension age. If you retire at your legacy scheme pension age (age 60 in most cases), your legacy scheme benefits will be unaffected. Your 2015 scheme benefits will be reduced, but the reduction might not be as severe as many members think. If you are thinking of retiring early, get a pension estimate.

Compensation claims 

It is also possible to claim compensation if you have been discriminated against, either for any financial expense you have incurred (such as financial advisers’ fees), or for non-financial injury such as anger, upset, distress, anxiety etc. These types of claims are often referred to as “injury to feelings” claims.

It is only possible to claim compensation if you have made a Tribunal claim. New regulations will be made allowing the employing department to pay compensation to non-claimants, but this is likely only to cover financial losses, not injury to feelings.

The claims filed

The claims which the POA filed for members were filed in two waves. We have agreed settlement terms with the Cabinet Office for the largest group in the first wave. Settling the other first wave claims is likely to follow shortly. Settling the second wave claims will take more time.

  • Circular 134/2017 invited members to make a claim by completing a questionnaire on the members area of the POA website. We received 4,600 responses. Some were incomplete, some were duplicates, and some were for members who did not have a claim to make (because they were old enough to be fully-protected from the changes for instance). Using the data obtained from the questionnaire responses our solicitors identified the valid claims and filed them.
  • The questionnaire announced in circular 134/2017 closed on 10 January 2018. Recognising that some members had not filled it in before the closure date, the POA opened a second questionnaire in 2020, as announced in circular 39/2020. It closed on 30 June 2020. We received 2,800 responses, again including a number of duplicates, incomplete replies and responses where the respondent had not been discriminated against. Our solicitors identified the valid claims and filed them.

There is a major difference between the 2017 and 2020 waves in terms of injury to feelings claims. That is because by 2020, the Government had announced that it would remedy the age discrimination for everyone. The Government Legal Department says that if a member did not compete the 2017 questionnaire their feelings cannot have been significantly injured. This is an issue which has yet to be resolved. 

Northern Ireland

In order to pursue a group Tribunal claim, one claimant must agree to be named as the lead claimant.

We asked the members serving in Northern Ireland if any of them were prepared to take on this role, but none of them was prepared to do so. Until someone does, we will not be able to file claims in the Industrial Tribunal in Northern Ireland.

The severity of injury to feelings 

Compensating someone for injured feelings is an inexact science – everyone’s circumstances are different. Everyone who made a claim has been caused anger, upset, distress and anxiety to some extent, and our lawyers made an injury to feelings claim for everyone whose claim has been submitted.

Circular 39/2020 invited members to say if they had reasons for saying that their position was worse than the ordinary case, and where members completed and submitted the form attached to the circular our solicitors made a claim for higher compensation on their behalf.

The present position regarding compensation claims

As mentioned above, we have agreed settlement terms for the largest group of claims, which is the group of prison officer members working in England and Wales. Settlement terms for other groups should follow shortly. The present position is as follows.

Prison officers serving in England and Wales: 2017 claims

The Cabinet Office has agreed to pay £2,650 to most prison officers serving in England and Wales who filed a Tribunal claim in 2017. The mechanics of putting this settlement into place will take a few weeks, but the outcome is that these members will receive a letter asking them to withdraw their Tribunal claim in return for a compensation payment of £2,650.

The exception is for members who returned the form to say that the extent of their injury to feelings was above the ordinary. The Government Legal Department will require an explanation as to why that is the case, but subject to that they will pay £5,250.

You will not have to agree to settle on these terms, but the POA believes, on the advice of their solicitors and barristers, that this is a good deal which should be accepted. If you want to pursue a claim for higher compensation you will be free to do so, but the POA will not provide further legal assistance if you do.

Either way, you do not have to do anything at this stage. The Government Legal Department may want some more information regarding the higher category claims, and if so, our solicitors will write to the members concerned. Subject to that, you will receive a letter asking if you will agree to withdraw your claim in return for the compensation payment.

You should note that these compensation payments are free of tax.

Prison officers serving in Scotland: 2017 claims

The claims for prison officers serving in Scotland were put on hold (“sisted”) pending the outcome of the settlement negotiations in England and Wales. It was accepted on all sides that what applies in England and Wales is equally applicable in Scotland.

Our solicitors are arranging for the sist to be lifted and for the 2017 Scottish prison officer claims to be settled on the terms outlined above.

Prison officers serving in Northumberland: 2017 claims 

The claims for prison officers serving in Northumberland have to be treated slightly differently because one of the respondents is the employer – Sodexo in the case of Northumberland. The 2017 claims against Sodexo are also on hold at the moment but they will be resumed with a view to getting the same settlement outlined above. We understand that the defence to the claims is being underwritten by the Government and we do not expect the interposition of a private sector employer will make any difference.

Secure psychiatric workers: 2017 claims

The claims for NHS Pension Scheme members are quite different from the claims for prison officers because the pension schemes are different. In some cases, the consequences of the 2015 changes were more severe for members in the special hospitals because their legacy scheme pension age was 55.

The NHS claims were also put on hold pending the prison officer claims. They have now been listed for a case management hearing on 15 September, when a hearing date for a final hearing will be set, probably in the first half of 2023. The likelihood is that they will also settle, at a level at least equal to the terms outlined above.

2020 claims: all claimants

As mentioned above, all of the claims filed following circular 39/2020 have an additional hurdle in their way. The Government Legal Department takes the view that any claimant who filed a claim after July 2019, when the Government announced that it would rectify the discrimination for everyone, is just jumping on the bandwagon – their feelings weren’t injured at all.

We don’t accept that, particularly for members whose circumstances changed between 2017 and 2020 (they retired on ill-health grounds for instance).

A negotiated settlement for these claims is also likely, but is still some way off. The present position is that we are waiting for the Government to state formally what their position is.

Immediate detriment cases 

This refers to the cases of members who have already retired on the grounds of ill-health (or will do so in the near future) and who are already losing money because they have been retired on the terms of the wrong pension scheme. 

We are close to agreeing a settlement with the Government about how these cases should be resolved without any further delay. That will be the subject of a further circular in the next few days.

What you should do now

We understand that some members will be concerned to check that their claims have been filed – a number of members have already been in contact to do that.

If you do want to check please send an email to nadine@poauk.org.uk. It would help if you could put “pension age discrimination claim check” in the subject line of your email so that the reason for your email is readily apparent.

We have asked our solicitors to double-check the claims filed in response to the two surveys. If there are any reasons to do so they will write to you to pick up any queries they may have.

We will keep you updated as the settlement process proceeds.

 

Yours sincerely

STEVE GILLAN
General Secretary

 

Representing over 30,000 Prison, Correctional and Secure Psychiatric Workers, the POA is the largest UK Union in this sector, able to trace its roots back more than 100 years.