The changes to the Scheme

  • Answer:

    • If a member is eligible, they’ll choose between their final salary (legacy) and career average (reformed) pension scheme benefits for service between 1 April 2015 and 31 March 2022 (the remedy period). they’ll make their choice at the time they take their pension benefits (e.g. when you retire), this is named the Deferred Choice Underpin (DCU)
    • Initially, members who were moved to the career average (reformed) scheme in 2015 (or later if they had tapered protection), will be moved back into the final salary (legacy) scheme for the remedy period. However, when they then take their pension benefits, for example at retirement, they’ll get to choose between their final salary (legacy) and career average (reformed) scheme benefits. At this point, they’ll receive the necessary information to be able to make a choice about which pension scheme benefits are better for them
    • Affected members who have already taken benefits from the final salary (legacy) scheme, or will before April 2022, will be given a choice between their final salary (legacy) and career average (reformed) scheme benefits for service between 2015 and the date they take their pension benefits. This choice will be offered as soon as possible after legislation is implemented and any change to benefits will be backdated
    • From 1 April 2022 all active members will accrue service in the reformed career average scheme.

  • Answer:

    It’s important to remember that the period of service affected is that between 1 April 2015 and 31 March 2022. This is known as the remedy period.

    As, for many members, the career average scheme is more beneficial, they’ll be given the opportunity to make a choice at retirement as to whether they wish to take final salary (legacy) scheme benefits or career average (reformed) benefits in respect of their service during the remedy period. It cannot be a combination of the two. This is referred to as the Deferred Choice Underpin (DCU). We’ll provide sufficient information to enable them to make an informed choice based on what best suits them.

  • Answer:

    You can find further information on the response on the government website (This link opens in a new window) or in our factsheet.

  • Answer:

    Depending on members’ personal circumstances, many members may be better off in the career average (reformed) scheme so it’s not fair to simply move everyone back into the final salary (legacy) schemes. The government therefore wants to provide members with the option to choose between these scheme benefits for the period between 1 April 2015 and 31 March 2022.

  • Answer:

    The government has also confirmed that from 1 April 2022, all those who continue in service will only be eligible to do so as members of their respective reformed pension schemes, i.e. those introduced in 2015, and of which many are already members in relation to service from that date. Therefore, all active members will be placed in the career average (reformed) scheme from 1 April 2022. The final salary link for members with prior service in the final salary (legacy) scheme would be retained.

  • Answer:

    The government’s response to the consultation informs that members affected by the discrimination will be given the opportunity to decide which scheme they have built up service in during the remedy period. This may or may not, change the value of their pension benefits.

  • Answer:

    The government acknowledges that many members may wish to retain their current arrangements until the point at which they retire, even if this is after 1 April 2022. However, the government does not believe it would be fair to allow some members, and not others, to continue under different arrangements and as members of different schemes, after the discrimination has been addressed and the remedy period ends.

  • Answer:

    The government believes that the proposal that anyone who remains in service from 1 April 2022 will do so as a member of their respective reformed career average scheme is right and ensures equal treatment in terms of scheme membership. Some individuals may be better off in the career average scheme, therefore putting everyone back into the old schemes would mean that some members may be made worse off. Providing the choice means that individuals can receive scheme benefits that are best for them.

  • Answer:

    Members are best placed to make this choice as it will depend on their personal circumstances and preferences. We’ll provide them with information that reflects both their final salary and career average scheme benefits. This will provide them with visibility of their expected benefit entitlements for the remedy period in advance of their decision, normally at the point a pension is paid.

  • Answer:

    The government is clear that the DCU will provide greater certainty for members and is also the right approach for schemes and the government. DCU avoids the need for those affected to make assumptions around things such as their career, and retirement age, which would increase the risk of making an incorrect decision, particularly if they’re a younger member.

  • Answer:

    Yes, as all active members will be placed in the career average (reformed) scheme from 1 April 2022. The final salary link for members with prior service in the final salary scheme will be retained.

  • Answer:

    No, they’ll be able to choose to receive their benefits from either the final salary (legacy) scheme or from the career average (reformed) scheme, for any period of service between 1 April 2015 and 31 March 2022.

  • Answer:

    No, they don’t have to remain in pensionable service through to 2022 to receive the benefits of the remedy. The remedy will be applied to all service between 1 April 2015 and 31 March 2022, irrespective of when their pensionable service ends.

  • Answer:

    No. Normal Pension Age (NPA) in most of the reformed schemes is linked to the State Pension age, reflecting that most people can expect to live longer and have longer working lives. Nobody, though, is required to work longer if they don’t wish to do so. If a member has reached their Minimum Pension Age they can take their pension before NPA with the pension being adjusted fairly to reflect the fact they’re likely to be paid for longer. They can also choose to work beyond their NPA and receive a bigger pension. There are options available for them to increase their pension benefits prior to retirement.

  • Answer:

    The DCU will offer a choice of having the benefits accrued in the remedy period paid on either a career average or final salary scheme basis during the remedy period. The final salary element will be based on the section of the final salary scheme that a member accrued benefits in (protected / tapered protection members) or would have if they hadn’t been moved to the career average scheme (transition / tapered protection members).

  • Answer:

    No, all active members will be placed in the career average (reformed) scheme from 1 April 2022.

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