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Money And Finance

Public Sector Pension Changes: What This Means For The Armed Forces

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Armed Forces personnel are expected to receive an update on how a court ruling will affect their pensions.

The update comes after the Government accepted a Court of Appeal decision that ‘transitional arrangements’ and changes made to public sector pensions were discriminatory and, therefore, unlawful.

The Ministry of Defence has said that it is now examining its next steps in response to the ruling while the government said that plans were underway to remedy pension schemes across the public sector.

Armed Forces pensions fall under the public sector scheme but the implications of the court ruling on military pensions is not yet clear.

The court of appeal ruled, at the end of last year, that government protections for older firefighters and judges discriminated against younger workers, who were transferred to less beneficial schemes and the Supreme Court last month ruled that the Government could not appeal that decision.

Earlier this month, the Government issued a ministerial statement and confirmed that as ‘transitional protection’ was offered to members of all the main public service pension schemes, the difference in treatment will need to be remedied across all those schemes.

The implications for Armed Forces pension schemes, which fall under the public sector, are now under examination.

Elizabeth Truss Picture PA
Elizabeth Truss, The Chief Secretary to the Treasury, has responded - Picture PA

Elizabeth Truss, The Chief Secretary to the Treasury, in a written response to the ruling said: "The government is committed to providing public service pensions that are fair for public sector workers and for taxpayers. This is why we brought forward reforms in 2015, based on the recommendations of the Hutton report, to ensure that these pensions are sustainable in the future.

"The courts have considered cases regarding the implementation of the 2015 reforms. On 27 June 2019 the Supreme Court denied the government permission to appeal the Court of Appeal’s judgment that transitional provisions introduced to the reformed judges and firefighters pension schemes in 2015 gave rise to unlawful age discrimination.

"The government respects the Court’s decision and will engage fully with the Employment Tribunal to agree how the discrimination will be remedied.”

She added that initial estimates suggested remedying the discrimination would add about £4 billion per year to pension scheme liabilities.

What Does This Mean For Your Armed Forces Pension?

As the Government has now accepted the court's findings that the ruling should apply to all public sector pensions, it is to set out a remedy across all public sector retirement plans.

The Ministry of Defence said personnel would be updated on the next steps for the department once the details for Armed Forces pensions had been examined.

A Ministry of Defence (MoD) spokesperson said:

“We are working with HM Treasury to fully understand the implications of this ruling and our next steps.”

Members of the Armed Forces, however, are being reassured that they will not see any reductions to the pensions that they have earned to date.

The spokesperson added that service personnel, serving and retired, would be updated on the next steps “in due course”.