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On 7 September 2021, the House of Lords is scheduled to debate the second reading of the Public Service Pensions and Judicial Offices Bill [HL].

The bill contains provisions in a variety of areas. First, for all public service pensions, it seeks to remedy unlawful discrimination that arose when existing public schemes were closed to certain members between 2014 and 2016. It proposes separate remedies for judicial schemes, local government schemes and all other public sector schemes.

The remedies follow a series of consultations. They are expected to cost around £17 billion. It is not yet clear who will bear these costs.

Other measures in the bill that change the reformed pension schemes brought in between 2014 and 2016 include reforming the ‘cost control mechanism’ (CCM). This was intended to protect both member benefits and the cost to the taxpayer from unforeseen changes in pension scheme costs. The reforms are aimed at striking a fairer balance between scheme members and taxpayers than was initially the case and making the CCM more stable.

Finally, the bill contains a number of provisions that aim to improve recruitment and retention in the UK judiciary. Some of these relate to the judicial pension scheme. The Government proposes to introduce further reforms, for example to make the scheme exempt from pension tax-free contribution limits and to improve accrual rates.

Other measures are unrelated to pensions. They include:

  • reforming the system of judicial allowances;
  • increasing the mandatory retirement age for the judiciary; and
  • widening the scope for judges to sit after they have retired.

The House of Commons Public Accounts Committee has criticised the Government for being overly focused on the cost of public pensions to the taxpayer. The committee argued there should be greater consideration of the benefits of pensions, such as in recruiting and retaining staff and in reducing the future cost of welfare benefits. It also argued for further evaluation of the 2014 to 2016 reforms.

Documents to download

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