This proposed law seeks to reform pensions across the public sector. It would also make other changes to the rules related to judicial offices. The pension reforms partly respond to a finding of unlawful discrimination in existing schemes and are partly aimed at improving the operation of public sector pensions. The changes relating to judicial offices are intended to improve recruitment and retention in the judiciary.
Public Service Pensions and Judicial Offices Bill [HL] (339 KB , PDF)
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:
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.
Public Service Pensions and Judicial Offices Bill [HL] (339 KB , PDF)
The Northern Ireland Budget (No. 2) Bill is a government bill that would authorise government departments and certain other bodies in Northern Ireland to incur expenditure and use resources for the financial year ending 31 March 2024. The House of Commons has passed the bill and the Speaker has certified the bill as a money bill. In practice this limits the extent to which the House of Lords can propose significant changes.
The Pensions (Extension of Automatic Enrolment) (No. 2) Bill is a private member’s bill that would allow ministers to lower to 18 the age threshold at which qualifying workers are automatically enrolled into workplace pensions. It would also allow ministers to amend qualifying earnings limits so that pension contributions are calculated from the first pound earned. Ministers would have to obtain Parliament’s approval for any changes after first consulting on any proposals and reporting to Parliament on the consultations held.
The Finance (No. 2) Bill is a government bill intended to give statutory effect to the tax measures announced in the spring budget 2023, as well as other previously announced policies. These include the introduction of full expensing of capital expenditure on plant and machinery from 2023 to 2026, the abolition of the lifetime allowance of tax relievable pension savings and the freezing of fuel duty rates for 2023/24. The bill was introduced to the House of Lords on 21 June 2023 and its second reading and all remaining stages are due to take place on 4 July 2023.
