
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
Background
Following a report in 2011, the Government announced that it would implement a wholescale reform of the public service pension schemes. The schemes would move from defined benefits to career average. In recognition of the disproportionate impact this would have on members who were nearing retirement, transitional measures were put in place ensure this group were not disadvantaged by having less time to make alternative provision.
In response, a group of firefighters and high court judges brought claims arguing that these transitional arrangements constituted indirect discrimination on the grounds of age, sex and race. On the latter point, it argued that there were fewer women and ethnic minority members in the protected older group.
The Court of Appeal heard these claims and ruled in December 2018 that these transitional arrangements were indeed discriminatory. It ruled that the Government would need to honour the transitional arrangements for all members of the schemes. The impact of this is huge; it could add £4billion to the public pension schemes’ liabilities, which most certainly will lead to an increase in contribution rates. The Government has been refused permission to appeal the Court of Appeal judgment, which means the decision of the Court of Appeal is binding law.
Government’s statement
The Government has now given some indication of how they propose that this compensation will be paid. The salient points are:
Next steps
The Government has concluded its discussions with all the stakeholders and hopes to release proposals later in the year. These proposals will be subject to consultation before any steps being agreed and implemented.
In the current climate, there is little way of knowing any more accurate time frame. However, it is clear from the Government’s statement that the time and cost of implementing the required changes will be very much borne by employers and is, therefore, something to bear in mind when budgeting for the future.
A copy of the statement can be found here https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Lords/2020-03-25/HLWS182/.
Please contact Alice Kinder for further information.
The Law Commission published its report on Technical Issues in Charity Law in September 2017 following a public consultation.
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