McCloud Judgment
What is McCloud?
When the Government reformed public service pension schemes in 2014 and 2015, older members were protected from the changes. However, in December 2018, the Courts ruled that younger members of the judges’ and firefighters’ pension schemes had been discriminated against because the protections did not apply to them.
The ruling is called the McCloud judgment after a member of the judges’ pension scheme involved in the case.
The rules of all public service pension schemes, including the Local Government Pension Scheme (LGPS), changed from 1 October 2023 because of the ruling. The changes are known as the McCloud remedy and they remove the age discrimination found in the McCloud judgment.
In the LGPS, older members were protected by the underpin. When a protected member retired, their pension in the career average scheme was compared with the pension they would have built up in the final salary scheme. If the final salary pension would have been higher, their pension increased.
From 1 October 2023, eligible younger members are also protected by the underpin. Not all LGPS members are eligible for protection. The underpin will protect the pensions of eligible members that they built up in the remedy period. The remedy period is from 1 April 2014 to 31 March 2022. Underpin protection stopped earlier if you left the LGPS or reached your final salary normal pension age before 31 March 2022.
What do you need to do?
Most members do not need to take any action. The pensions team will work out if you are protected. If you are, when you take your pension, we will work out if it will increase because of the underpin.
Not many members will get an increase in their pension because, for most members, the pension they built up in the career average scheme is higher than they would have built up in the final salary scheme.
Active members
If you are an active member (i.e. currently paying into the scheme) and the protections apply to you, we will include information about how the underpin might affect your pension in your 2025 annual benefit statement. We must issue this by 31 August 2025.
If you leave the LGPS, we will work out provisional underpin figures for you. We can only work out the final figures and if any increase is payable when you take your pension.
Deferred members
If you are a deferred member (i.e. not currently paying into the scheme but your pension is not yet due to be paid) and the protections apply to you, we will include information about how the underpin might affect your pension in your 2025 annual benefit statement. We must issue this by 31 August 2025.
We will work out final figures and if any increase is payable when you take your pension.
Pensioner members
If you are protected and your LGPS pension is already being paid to you, we will work out if your pension will increase. We will do this as soon as we can, but reviewing all pensions in payment will take some time.
Please be assured that we will contact anyone whose pension in payment will increase because of the McCloud remedy. We will only write to you if the new rules mean that your pension will increase.
Membership of other Public Service Pension Schemes
Some scheme members who were originally expected not to be affected by the judgment may still qualify for an additional amount of pension, if they have another public service pension that has not been transferred into the Leicestershire Pension Fund and if they meet the other qualifying conditions relating to the timing of membership.
Pension schemes classed as public service pension schemes are:
- Other LGPS Funds
- NHS Pension Scheme
- Police Pension Scheme
- Judicial Pension Scheme
- Teachers’ Pension Scheme
- Firefighters’ Pension Scheme
- Civil Service Pension Scheme
- Armed Forces Pension Scheme
If you have an entitlement to a public service pension scheme other than the LGPS administered by Leicestershire Pension Fund, please notify us by completing a declaration form.
You can request a form via our online enquiry service. Please complete your details, select the ‘General Query’ category and request a 'McCloud Membership Form.' Upon receipt of your request we will check to see if you are likely to be affected by this ruling. If you do not need to complete the form we will let you know.
It must be stressed that this is not an opportunity to transfer your other pension into the Leicestershire Fund and that entitlement will continue to remain separate.
Please note that only a very small number of scheme members will receive an increase in their benefits as a result of this rule.
If you left your pensionable employment with Leicestershire before 1 April 2014, you will not be affected by this rule change and you do not need to complete this declaration.
Unless you need to request a form to declare your membership of another public service pension scheme, you do not need to contact us.
Further information
The LGPS member website has further details about the McCloud remedy and whether it affects you.
The government have produced a Local Government Pension Scheme McCloud factsheet