Government go with deferred choice approach after 2018 McCloud ruling

Common sense prevails...

2018 McCloud ruling is a good outcome for teachers

Here at Punter Southall Aspire we’re pleased to see common sense now prevailing in Government following 2018’s McCloud Judgement and their subsequent appeals against it.

This is a good outcome for teachers, who will be able to make an informed decision on which pension scheme section is best for them, though some form of support/guidance and comparison will need to be produced by the teachers’ pension schemes to help them make that decision.

What is the 2018 McCloud Judgement?

By way of a reminder, the McCloud Judgement ruled that when the “final salary” section of the teachers’ and other public sector pension schemes were closed in 2015, the transitional arrangements put in place allowing those closer to retirement to remain in this section were age discriminatory.  As a result, teachers and all other impacted members will be given the option to choose whether certain parts of their benefits are treated as part of the final salary section or career average section.

Choice will help teachers

The Government’s decision to allow the choice to happen at or near retirement will help teachers make informed decisions. Those who are already in receipt of a pension that is impacted by this ruling will also be offered a choice which can be applied retrospectively.

The alternative, asking members to choose upfront, really made no sense. Not only would some members have struggled to make a choice, but it was pretty much inevitable that some would have made the wrong decision and end up worse off, though they wouldn’t have known that until it was too late.   

Whether your school remains in one of the teachers’ final salary pension schemes or has exited at any time since 2015, this will be a positive story for many teachers.  Please do ensure you share the good news with them.

To find out more please visit our comprehensive web resource: A complete guide to pension challenges faced by independent schools'