Pensions - Articles - Pension plans for public sector workers hugely complex

The Government has today issued a written statement about how it plans to respond to a recent Court of Appeal ruling about age discrimination in public sector pension schemes.

 The full text of the statement can be found here:

 The key points are:
 - The government will consult later in the year on a plan which would involve millions of public sector workers being allowed to make a choice to have their pension for certain years worked out under the old (pre-reform) rules rather than the new rules, if this would give them a better outcome;
 - The statement leaves open the possibility that any change could affect tax calculations going back several years; if this is so, many members will need complex advice to decide what to do;
 - The government has not yet said how members will be advised what to do or who will pay for any advice;
 - The government has not yet said how it plans to address the issues of discrimination going forward;

 Commenting Steve Webb, partner at Lane Clark & Peacock said:'Today's statement shows the massive complexity of unpicking public sector pension reforms following the recent decision by the Court of Appeal. If the government goes ahead with its plans, complex calculations will need to be made for millions of public sector workers, including retired members, to help them decide which scheme would be of most benefit. Worse still, there is a chance that retrospective changes to pensions could affect tax calculations going back several years. Members will need access to good advice to make the right choice and the government has not yet made it clear who will pay for this. There is a strong case for ministers to waive any knock-on consequences for tax bills for previous years, otherwise the decision could be extremely complex for some workers and retired public servants’'.

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