DLUHC seeks further views on McCloud remedy for LGPS

Consultation looks to clarify underpin rules on aggregation, club transfers and divorce

Jonathan Stapleton
clock • 2 min read
The Court of Appeal ruled that April 2015 changes to public sector schemes discriminated against the young as they did not get protections granted to older members
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The Court of Appeal ruled that April 2015 changes to public sector schemes discriminated against the young as they did not get protections granted to older members

The government is seeking further views on the McCloud remedy in the Local Government Pension Scheme (LGPS), consulting on supplementary issues and scheme regulations.

A consultation document published by the Department for Levelling Up, Housing and Communities (DLUHC) yesterday (30 May) follows a separate consultation the government undertook in 2020 on proposals to address discrimination found by the courts in the ‘McCloud' case and its subsequent response in April 2023 setting out how it would proceed.

This original 2020 consultation led to the decision that the government would address  the McCloud discrimination by extending so-called ‘underpin' protection to the younger members of the scheme whom the courts found had been treated unlawfully. In the LGPS, the underpin is the means through which transitional protection was provided to older members.

In the consultation published yesterday, the DLUHC said it was now seeking additional views on issues relating to the McCloud remedy - looking to obtain further input on a number of areas or addressing areas not covered in the 2020 consultation.

It said it was also seeking views on draft scheme regulations which would implement the McCloud remedy in the LGPS.

The DLUHC said the policy matters on which it was particularly seeing views on included the issue of aggregation - determining the rules applicable to decide whether a member with multiple LGPS memberships has underpin protection in some or all of these.

It said it was also asking for input on so-called club transfers to determine the rules applicable to decide whether a member with previous membership of another public service pension scheme has underpin protection in respect of their LGPS membership.

The DLUHC is also looking for input as to how the underpin can work in respect of flexible retirement; how scheme divorce and underpin calculations interact; and how a retrospective increase to a member's pension arising from McCloud remedy may impact any injury allowances payable.

Commenting on the latest consultation, Aon senior consultant Virginia Burke said: "The government has given a well-considered response to contentious and complex issues such as aggregation and flexible retirement. We welcome the fact that Government is seeking further views on these areas to make sure it gets the policy right - the last thing LGPS members and administrators need are further tweaks down the line."

The DLUHC's latest McCloud consultation will run from 30 May 2023 to 30 June 2023.

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