Update

As previously reported in the June/July 2022 edition of the Maritime Pensions Campaign Newsletter, in 2015 the UK Government made changes to Public Sector final salary pension schemes, which resulted in the introduction of Career Average Revalued Earnings (CARE) pension arrangements.

Like other Public Sector workers, our members employed by the RFA who contribute to the Principle Civil Service Pension Scheme (CSPS) and Orkney Ferries, who are members of the Local Government Pension Scheme (LGPS), were advised at the time that they would either be allowed to stay in their current final salary arrangement, or they would be moved into the new CARE Pension Scheme. This decision to allow some members to stay in Final Salary was based on an individual’s closeness to retirement.

The Government’s decision to split workers into groups was later found by the Court of Appeal to be discriminatory because it was seen as describing someone’s closeness to retirement is just another way of describing a person’s age. While the introduction of CARE pension schemes was not seen as unlawful in its entirety, the Court of Appeal ruled that a remedy must be found that is not age discriminatory.

The McCloud Court Case in 2018 ruled that a solution must be fair to all members regardless of age and therefore put in place a solution for each Public Sector Pension Scheme effected by the McCloud:

RFA CSPS Solution

1. The first part of the process was completed on 1st April 2022 which resulted in all contributing RFA pension scheme members being moved into Alpha.

2. The second part of the process was to correct the discrimination that has taken place between 2015 and 2022. This is known as the “McCloud Remedy”. This in effect means that some RFA pension scheme members, who were contributing to the CSPS between 31st March 2012 and 1st April 2015 will have a choice between two different types of benefits i.e. the legacy final salary CSPS or the reformed Alpha CARE Pension Scheme.

We are advised that, after October 2023, affected members within the scope of the 2015 “McCloud Remedy” will be offered a choice at retirement as to which benefits they would prefer to receive for any service between April 2015 to April 2022. This is not necessary an easy choice because in some cases members benefits may be higher under the Alpha CARE Pension Scheme depending on an individual’s age and salary progressions during the run up to retirement.

However, to assist members the Government Actuary’s Department has set up Retirement Modeller Calculators across the 12 different Public Sector pension schemes to assist members with their retirement decisions.

One of these Retirement Modeller Calculators has been set up to assist members of the CSPS which will help RFA members understand the pension implications of the McCloud ruling. The CSPS Retirement Modeller Calculator can be accessed by visiting https://retirementmodeller.civilservic epensionscheme.org.uk/remedy

Click here for the CSPS Retirement Modeller Calculator

The retirement calculator aims to help scheme members eligible for the ‘McCloud Remedy’ to make an ‘informed decision’ on which scheme is better for them.

In addition to this, the calculator will allow members to compare these benefits using different retirement options, such as early or late retirement, or exchanging pension for a cash lump sum etc.

Therefore, if you were a member of the CSPS between 31st March 2012 and 1st April 2015 you are likely to be affected by the McCloud ruling and should visit the CSPS Retirement Modeller website for more information.