BMA challenges pension scheme cost decision

by Neil Hallows

Price of remedy to age discrimination passed on to pension scheme members

Location: UK
Published: Wednesday 6 July 2022
vish sharma

The BMA has been given permission to take up a judicial review into the Government’s ‘indefensible’ handling of NHS pension reforms.

It will consider the Government’s attempts to make NHS pension scheme members pay for changes which have been made necessary by the so-called McCloud remedy.

The remedy arose because in 2015 the Government made changes to the majority of public service pension schemes. The reforms did not apply to members within 10 years of their normal pension age on 31 March 2012 – instead they remained in their legacy schemes with ‘transitional protection’. The BMA, along with judges and firefighters brought legal cases against the Government, which conceded that the protection offered to older, but not younger, members resulted in unlawful age discrimination.

It is now the way that the Government is seeking to remedy this, that the BMA, along with the FBU (Fire Brigades Union), is to challenge.


Surplus wipe out

The Government is loading the extra cost to the NHS pension scheme on to the scheme’s members. The pension scheme was in surplus at its last published valuation in 2016, and that should have led to reduced costs or increased member benefits. But the Government paused the implementation of these changes and late last year it announced that the costs of the McCloud case would count as a ‘member benefit’ – thus wiping out the surplus. The BMA immediately launched a judicial review against the decision, and it has now been given leave to proceed.

BMA pensions committee chair Vishal Sharma (pictured above) said: ‘It’s hugely significant that the BMA, along with the FBU, has been granted permission to proceed to judicial review appealing Government’s attempts to make members pay for the McCloud age discrimination remedy.

‘If Government had acted lawfully when reforming the NHS pension scheme in 2015, then the McCloud judgement wouldn’t have happened, and there would’ve been no need for the remedy that Government is now proposing that scheme members pay for.


Messy reform

‘After all, there was absolutely no rationale for Government to withhold the increase in benefits that NHS scheme members were entitled to under the cost control mechanism in the first place. Instead, the only thing Government has been successful in doing is making a mess out of these reforms, causing widespread distress to hard-working staff, and further complicating the NHS pension system.

‘The BMA has repeatedly said that this, along with punitive pension taxation arrangements, is a key reason behind falling recruitment and retention in the health service, and yet, Government has done nothing about it.

‘The Government has lost these pension challenges time and time again – precisely because they are trying to defend the indefensible by making others pay for their mistakes. To have been granted permission to now take up a judicial review case to be heard by the High Court is another major achievement, and we look forward to continuing to fight for what our members rightly deserve.’