NEU will be responding collectively to the consultation. NEU members should wait for the NEU Guidance before responding to the consultation individually.
The Department of Finance is consulting on options to address discrimination identified by the Courts in the transitional arrangements which were part of the 2015 reform of all public service pension schemes.
The consultation document itself, a Public Service Pensions Leaflet which sets out a summary of the proposals and an accompanying Policy Screening form can be found here.
The government is seeking to address discrimination caused by the ‘transitional protection arrangements’ when career average pension schemes were introduced in 2015.
This applies to all of the main public service pension schemes, including the NI Teachers’ Pensions Scheme.
Transitional protection is the policy which allowed some older scheme members to stay in the unreformed pension schemes instead of moving to the new career average pension schemes.
The court ruling that transitional protection gave rise to unlawful discrimination against younger scheme members has become known as the McCloud Judgment.
The ‘McCloud and Sargent’ cases concern the transitional protections given to members of the Fire Fighters and Judges Pension schemes, who in 2012 were within 10 years of their normal retirement age, as part of public service pensions reform.
These protections were challenged at an employment tribunal where they were deemed to be unlawful on grounds of age discrimination.
The judgement deemed that "transitional protection" introduced in April 2015 led to unlawful discrimination for judges and firefighters.
In short, the judgement found that when the public sector pension schemes were changed in 2015 (as a result of the Hutton Report) the manner in which the transitional provisions in schemes have been implemented has given rise to unlawful direct age discrimination.
As a result the Dept of Finance is consulting on how this discrimination can be addressed in all NI public sector pension schemes – including the NITPS.
If a NI Teachers Pension scheme member was ‘in service’ on the 31 March 2012 and still in service on 1 April 2015 then the consultation will apply.
The consultation provides an opportunity to provide feedback on the proposals.
The two possible approaches are:
1. an immediate choice;
2. a deferred choice.
Both approaches would give members a choice whether to receive benefits from the legacy or reformed pension schemes in respect of their service during the period between 1 April 2015 and 31 March 2022. See Public service pension schemes: changes to the transitional arrangements to the 2015 schemes consultation.
NEU are in discussions and will issue guidance to members to inform the decisions.
A paper is going to the NEU National Bargaining and Negotiations Committee on 5 September.
Our initial view is that we have concerns about the Immediate Choice option, and are inclined to support Deferred Choice.
There are so many unknowns that members can't resonantly be expected to choose between the two options. Things like future salary paths and future inflation will play a part. Individual financial advice will not be available.
Neu believe that members can realistically only make this decision at retirement when they know whether career average or final salary would have been better for them.
Our advice today is that members hold off responding to the consultation until we are able to provide a more detailed response and guidance to members.
The consultation will run for 12 weeks and closes at midnight on 18 November 2020.