A ‘structured’ financial loss compensation scheme will be rolled out by the Department of Health for NHS pension scheme members who have been affected by age discrimination.
The Government committed age discrimination when reforming the NHS pension scheme in 2015 when most public service pension schemes were reformed.
The reforms did not apply to scheme members who were within 10 years of their normal pension age on the 31 March 2012, instead they remained in their legacy schemes with ‘transitional protection’.
After legal challenges were brought by doctors, judges, firefighters and others, the Court of Appeal found this amounted to ‘unlawful discrimination on grounds of age,’ as the protection was offered only to older members of the scheme.
In March, the Department of Health launched a consultation on a draft statutory instrument which will make changes to NHS Pension Schemes Regulations.
The draft regulations have now been amended following the consultation and regulations are being laid in Parliament and, subject to the will of Parliament, will come into force on 1 October.
The Department of Health said that these regulations will facilitate the implementation of the retrospective part of the McCloud remedy, ‘an important step in rectifying the discrimination identified by the Court of Appeal in 2018’.
The DHSC intends to establish a structured public service pension scheme remedy financial loss compensation scheme with scheme rules that will be published on the NHSBSA website shortly after these regulations come into force.
Details on the application process for compensation will also be made available on the website and all applications will be considered on a case-by-case basis.
Andrew Pow, board member of the Association of Independent Specialist Medical Accountants (AISMA), said: ‘It’s good news that the Department of Health and Social Care has taken on board many of the comments from AISMA and other organisations contributing to the consultation.
‘It appears that several of AISMA’s recommendations, including a flexible approach for NHS pension scheme members looking to reinstate part of their opted-out service, will be implemented.
‘We also welcome the DHSC’s intention to establish a compensation scheme for pension scheme members suffering tax losses due to 2019 to 2020 tax year annual allowance charge adjustments as part of the wider compensation arrangements.’
Graham Crossley, NHS pensions expert at wealth management company Quilter, said: ‘Recognising the extensive efforts of the unions and other stakeholders in highlighting the myriad of ways members could have been financially disadvantaged, it’s commendable that the DHSC seems to have integrated the majority of their suggestions to address the discrimination.’
The NHSBSA will be responsible for delivering the retrospective part of the McCloud remedy from 1 October.
A version of this story first appeared on our sister title Pulse.
