Policy background Public service pensions reform and the Court of Appeal’s judgment
In 2010, the Chancellor of the Exchequer invited Lord Hutton of Furness to chair the Independent Public Service Pensions Commission ("the IPSPC"). The IPSPC was tasked with undertaking a fundamental structural review of public service pension provision.
	The IPSPC published its final report in 2011, setting out recommendations to reform public service pensions to balance better the interests of taxpayers, employers and members. The Government accepted the IPSPC’s recommendations as the basis for discussions with public service workers, trade unions, and other representative bodies.
	In November 2011, the Government published a Command Paper 1 setting out the Government’s framework for reform of the public service schemes. Further discussions were undertaken with each of the workforces to develop scheme design proposals.
	In April 2015 (April 2014 in the case of the Local Government Pension Scheme in England and Wales), new schemes were introduced for each of the main workforces – local government, teachers, the NHS, the armed forces, firefighters, police, judiciary, and the civil service. The reforms were implemented by regulations made under the Public Service Pensions Act 2013 (PSPA 2013).
	As part of the 2015 reforms, those within 10 years of retirement remained in their legacy pension schemes. This transitional protection was not a recommendation of the IPSPC but was agreed following discussions with member representatives.
	In December 2018, the Court of Appeal found in Lord Chancellor v McCloud, Secretary of State for the Home Department v Sargeant [2018] EWCA Civ 2844 (the McCloud judgment) that transitional protection unlawfully discriminated against younger members of the judicial and firefighters’ pension schemes, and also gave rise to indirect sex and race discrimination. On 27 June 2019, the Supreme Court denied the Government permission to appeal the Court of Appeal’s judgment.
	On 15 July 2019, the Chief Secretary to the Treasury made a written ministerial statement 2 setting out that the Government considered that the Court of Appeal’s judgment had implications for all of the public service pension schemes and planned to come forward with proposals to remedy the discrimination across the schemes.
	On 16 July 2020, the Government published a Command Paper: Public service pension schemes: changes to the transitional arrangements to the 2015 schemes3. The consultation set out two proposed options for retrospectively removing the discrimination suffered by members who were not eligible for transitional protection due to their age and proposed that the legacy schemes would be closed to all members on 31 March 2022.
	It is normal practice in discrimination cases to remedy unequal treatment by reverting to the most beneficial option. However, the reforms that were introduced in 2015 were progressive reforms and were in part intended to even out the value of pensions between some of the highest and lowest earners, resulting in some, particularly lower and middle earners, being better off in the new schemes. Simply extending transitional protection to all affected members would address the discrimination identified by the Court but would also mean that some members would be placed in a worse position. Instead, the Government proposed that members should be given a choice of which scheme benefits they wish to receive during the period from when the new schemes were introduced to the date that the legacy schemes are to be closed. The consultation sought views on whether the choice should be made immediately (once the necessary legislative changes were made) or deferred until the point that a member’s pension benefits become payable.
	In February 2021, the Government published its response 4 , confirming that the legacy schemes would close on 31 March 2022 and that affected members would be given a choice of which pension benefits they wish to receive when those benefits are paid. The Government explained that it preferred this approach as it would provide members with greater certainty about their decision and avoid the need for them to make assumptions about matters such as their future career and retirement age, which would increase the risk of making imperfect decisions, particularly for younger members. The response confirmed that affected members who are already in receipt of pension benefits will be given a choice as soon as possible after necessary changes to the schemes are implemented via legislation, or earlier if possible.
	Separate consultations were undertaken in relation to the Judicial Pension Schemes and the Local Government Pension Schemes because of the unique arrangements within those schemes. The Northern Ireland Department of Finance also undertook a separate consultation in relation to the public service pension schemes that are their responsibility under the devolution arrangements.
	In the Queen’s Speech on 11 May 2021, the Government announced its intention to bring forward legislation to implement retrospective changes to remedy the discrimination that arose when transitional protection was afforded to older public service workers when new public service schemes were introduced in 2014/15 and to ensure equal treatment for all members within each of the main public service pension schemes by moving all members into the reformed schemes on 1 April 2022.
	For the main public service pension schemes (the non-judicial schemes), where the Act refers to the "new scheme", this refers to the reformed 2015 schemes, introduced following an independent review of public service pensions, and made under the PSPA 2013. In respect of the judiciary, the scheme made under the PSPA 2013 is referred to in the Act as the "judicial 2015 scheme" rather than "new scheme". This is to avoid confusion with the newly designed, reformed scheme which will provide for future accruals for the judiciary from 1 April 2022 onwards. The pre-2015 public service pensions schemes are in each case referred to as the "legacy scheme".