Fighting fires

12 January 2022
2 min read

Lauren Boldy discusses the latest developments in the NHS pension age discrimination case.

The government is under fire once again as multiple organisations defend members of public sector pension schemes, including those affected by the NHS pension age discrimination case.

The Fire Brigade Union (FBU) and, most recently, the British Medical Association (BMA) are threatening legal action in relation to who will be footing the bill of the remedy costs.

As a dentist within the NHSPS, questions that will be at the forefront of your mind will be whether or not you will be contributing to this cost and at what point dental organisations will follow the precedent set by the FBU and BMA.

A brief background to the case
In April 2015, public sector pension schemes were reformed (including the NHSPS), with most members moved into new career average arrangements.

In December 2018, the Court of Appeal found that transitional protections that were put in place unlawfully discriminated against younger members of the judicial and firefighters’ schemes. In July 2019 the government accepted that the judgment applied to all the main public service pension schemes, including the NHS.

The 2020 consultation was the government’s remedy to remove this discrimination from all public sector pension schemes. In February 2021, the government confirmed it would proceed with the Deferred Choice Underpin (DCU) option as a way to remove the discrimination – where members could decide on their preferred section of the scheme upon retirement.

Who is affected by the case?
All public sector schemes including the NHS.

Dentists who were in the NHS before March 31, 2012 and on or after April 1, 2015. This includes members who were in service on March 31, 2012 and then took a qualifying break of less than five years. This includes members who left pensionable service, or who took their pension benefits, after April 1, 2015.

What is the latest?
The BMA has followed the precedent set by the FBU in a recent press release, threatening legal action over who will be paying the estimated £2.5bn yearly cost to rectify the age discrimination against members.

The government has admitted the cost of the remedy will be passed down to public sector scheme members. This will include members of the NHSPS and, most controversially, those who were found to be discriminated against as part of the McCloud judgement.

The BMA argues that the government will, by trying to pass the costs of its mistakes onto scheme members, take away the enhanced benefits members would otherwise been entitled to under the terms of the Cost Control Mechanism.

What should you do in response?
It’s critical not to make rash decisions in relation to this case around whether or not it’s worth being a member of the NHSPS.

It’s understandable that developments such as these could make you question whether the NHSPS is worth the hassle, but the reality is that it’s largely considered to be a scheme with some of the strongest financial benefits for its members. Leaving the scheme without expert guidance might leave you at a financial disadvantage or create unforeseen barriers down the road for your retirement plan.

A term that comes to mind would be ‘cutting off your nose to spite your face’.

Speaking to a financial specialist that understands the complexities of the NHSPS and the ongoing NHS pension discrimination case could help you make better informed choices to strengthen your financial position and help you keep your retirement plans on track.