The civil service’s biggest union has said it plans to launch a High Court challenge over the government’s decision to pause a mechanism that should have reduced Civil Service Pension Scheme members’ contributions last year.
The PCS said ministers were effectively “robbing” its members of 2% of their pension contributions by making them pay more than a 2018 independent valuation suggested was necessary.
Its announcement comes just over a year after then chief secretary to the Treasury Liz Truss said the government was pausing a scheduled formal valuation of public-sector pension schemes because a December 2018 Court of Appeal judgement related to firefighters made it impossible to do the scheduled valuation “with any clarity”.
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She argued that the ruling – which found “transitional protections” introduced in 2015 in connection with the creation of new pension schemes effectively discriminated against younger firefighters – could have an impact of £4bn a year on public sector pensions. Although the court case was brought by the Fire Brigades Union, it has implications for all public-sector pensions.
Truss subsequently said that changes to employee benefits that unions were expecting based on provisional valuations would only be introduced if the government was successful in challenging the Court of Appeal’s firefighters decision. The Supreme Court subsequently refused its appeal.
The same 2015 pensions reforms that introduced the transitional protection arrangements also included a “cost control mechanism” designed to trigger automatic changes to members benefits and contributions based on periodic valuations. The government accepted that provisional valuations had indicated the mechanism would be triggered by the formal valuation that should have taken place last year, and PCS said the result would have been a 2% cut in contributions for civil servants, in addition to bolstered death-in-service benefits and improved accrual rates for "alpha" scheme members.
PCS said that at a meeting in Whitehall last week, it had been told that the government was planning to seek parliamentary authority to make civil servants carry on paying pension contributions at the current rate – effectively avoiding the cost-control readjustment that should have taken place last year.
Union general secretary Mark Serwotka said that ministers’ decision was “totally unacceptable” and would be challenged jointly with the Fire Brigades Union.
“If you think about it, every month when you get your paycheck, 2% that you give the government should be in your pay packet,” he said.
“It’s completely unfair and we’ve told the government that they need to give you that money as soon as possible. But at the moment they’re not listening.
“We’re telling the government to cut your pensions contributions immediately by 2% and guarantee that by moving forward they will implement the legal case won by the firefighters to improve everybody’s pension.
“We met with representatives of the Fire Brigades Union and we will now, jointly with them, be seeking a judicial review to force the government to give you the pensions money back.”
In an answer to a parliamentary question last week, Treasury minister John Glen said that the government was "committed to addressing the discrimination identified in McCloud in all public service pension schemes, while ensuring all members can keep their accrued benefits”.
He added: “Schemes are currently discussing high-level proposals to achieve this with employer and member representatives, to inform a full public consultation. In addition, Employment Tribunals are considering the remedy for claimants in the various cases. While these processes are underway, the cost control mechanism remains paused as the value of pension schemes to members cannot be assessed with certainty.”