Civil service union eyes Supreme Court challenge over 'pensions robbery'

PCS says members of Civil Service Pension Scheme should not foot the bill for botched reforms
The Supreme Court in London Photo: Google Maps

By Jim Dunton

04 Jul 2024

The civil service's biggest union has this week pledged to take its battle with HM Treasury over pensions reform to the Supreme Court.

PCS said that it and other public sector unions would challenge an April decision at the Court of Appeal, which backed the government's plans to make public sector pension schemes fund the cost of repairing ministers' failed 2015 changes.

Those changes were declared illegal in 2018 by the High Court because of the way they discriminated against younger pension-scheme members. The Court of Appeal subsequently upheld the decision.

The so-called "McCloud judgment" resulted in the changes being set aside and forced the government to devise a remedy to fix the unfairness that had been identified.

The McCloud remedy is now estimated to come with a price tag of £19bn, and part of the government's solution involves keeping scheme members' contributions higher than they would otherwise have been under a cost-control mechanism baked into the original reforms.

PCS says the McCloud remedy is costing Civil Service Pension Scheme members an average of £53 a month – adding up to more than £3,000 for each contributing scheme member since 2019, when the cost-control mechanism should have kicked in and reduced contributions.

The union's general secretary Fran Heathcote described the situation as "the great pensions robbery".

"The valuation of our pension scheme proved that, if anything, we have all paid too much and are due money back," she said.

The Fire Brigades Union is the lead challenger in the case. PCS, the Prison Officers Association, the Royal College of Nursing and Unite are supporting the challenge. Civil service unions Prospect and the FDA are interested parties.

Last year the High Court sided with the government over the unions' McCloud remedy challenge on the cost-control mechanism governing member contributions.

Judge Mr Justice Choudhury said there was “nothing” in the terms of the Public Service Pensions Act 2013 – which underpins the 2015 pensions reforms – to stop the government from taking costs like the McCloud remedy into account in considering the financial health of public sector pension schemes.

"The fact that those costs are the result of a finding of discrimination against the government does not of itself render it absurd or unconscionable for them to be taken into account, any more than might be an increase in costs that were the result of irretrievably poor economic policy choices made by government," he said.

The judge's decision was upheld in April's Court of Appeal judgment.

If the unions are granted a Supreme Court challenge, the basis for both decisions will be probed by the UK's final court of appeal.

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