Pensions - Articles - Implementing changes from McCloud case may take over 2 years

The Pensions and Lifetime Savings Association (PLSA) has warned that proposed changes from the McCloud Judgement to the Local Government Pension Scheme (LGPS) members in England and Wales could take over two years to implement.

 The views come as part of the PLSA’s McCloud Judgement consultation paper response which looks at how the judgement will affect LGPS members in England and Wales.

 In its response, the PLSA said the 12 month time proposed by the Government to aggregate previous periods of LGPS membership may not be enough and that it recommends administrative authorities should be given the discretion to extend this 12 month period given the complexity of the changes. In some cases, members have said that changes may take over 24 months to fully implement.

 The McCloud judgement follows a ruling made by the Court of Appeal in December 2018 stating the pension reforms unlawfully treated scheme members differently based upon the members’ age on 1 April 2012.

 Whilst the McCloud judgement applies specifically to public sector pension arrangements, the Government has accepted that the Court of Appeal decision has implications for all public sector pension schemes.

 Joe Dabrowski, Head of DB, LGPS, and Standards, PLSA, said: “ Implementing these changes will present a significant challenge to funds and their administrators given the number of members who could be potentially impacted. A substantial number of pension records will need to be updated while benefit calculations relating to members who have left the scheme since 2014 will need to be reviewed. This will be a very large undertaking, particularly at a time where pension administrators are already stretched due to the impact of Covid-19 and an increasing workload resulting from GMP rectification as well as projects to improve their data and systems.

 “When we spoke to LGPS members, almost 40% stated that this process would take over a year to complete. From our conversations, members have said that implementing the changes could take between 12 to over 24 months due to the amount of resource they have to dedicate to implementing such large scale changes alongside their necessary functions. It is therefore important that administering authorities are given enough time to implement the proposals to ensure that their other tasks, such as benefit payments, do not suffer as a result.”

 To read the full response 

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