A judicial review hearing has started in the High Court last week in relation to the Government’s handling of the McCloud remedy costs.
We’ve previously written about the expensive and complex remedy arising out of the McCloud judgment. However, the British Medical Association and the Fire Brigades Union have brought related claims in relation to this (supported by a number of other trade unions).
They are challenging the Government’s approach on how to treat the £17bn of costs associated with addressing the unlawful age discrimination in public service pension schemes identified in McCloud.
This is all to do with the operation of the cost cap mechanism, which was introduced when reforms were made in 2015 to ensure that the cost of providing public sector pensions remained affordable.
The McCloud remedy – i.e. giving members in scope a choice of scheme benefits for the remedy period – will increase the value of schemes to members. This has therefore been captured as a ‘member cost’ in the cost control process and means that valuation outcomes have revealed higher costs than otherwise would have been the case.
The Court will therefore need to decide whether the Government’s decision to pass the remedy costs on to members in this way is lawful.
This blog was written by Hannah Taylor.