McCloud Remedy

When the Local Government Pension Scheme (LGPS) changed from a final salary to a career average pension scheme in 2014, protections for older scheme members were introduced. Similar protections were provided in other public sector pension schemes.

The Court of Appeal in December 2018 found in the McCloud and Sargeant cases, unlawful age discrimination in transitional protection arrangements (that did not apply to younger members) in the Judicial and Firefighters’ Pension Schemes when they moved from a final salary scheme to a career average pension scheme. This ruling applied to all public service pension schemes.

In relation to the LGPS, the age discrimination operates in the different treatment that exists between two groups of LGPS members:

• Group1 were members in service on 31 March 2012 and were within ten years of Normal Pension Age (NPA) on 1 April 2012, therefore benefiting from underpin protection and ‘better off’ than Group2.
• Group2 were members in service on 31 March 2012 and were more than ten years from NPA, were not eligible for underpin protection and therefore ‘worse off’ than the protected members (as they were not guaranteed a pension of at least the level they would have received in the final salary scheme).

To remove the McCloud age discrimination, qualifying younger members will now receive the underpin protection too. This change took effect on 1 October 2023 with the implementation of the McCloud Remedy regulations.

Underpin protection only applies to pension built up in the remedy period, between 1 April 2014 and 31 March 2022. The underpin will have stopped earlier if you left the scheme or reached your final salary normal retirement age (usually 65) before 31 March 2022. 

From 1 April 2022, there is no underpin protection. Pension built up after this date is based on the career average scheme only.

More information on the McCloud Remedy is available on the LGPS Member website.