The McCloud remedy has been a long and complicated process, with deadlines changing along the way.
For many Civil Service Pension Scheme members, the most important thing to know is that if you are retiring now, you should not have to wait for the wider Remedy exercise to be completed before making your choice.
However, for pensioners who retired before the Remedy was fully implemented, there is still outstanding work.
Why was the remedy needed?
In 2015, the Government introduced reforms to public service pension schemes. In the Civil Service, most members were moved into the new career-average scheme, alpha.
However, transitional arrangements meant that some older members were allowed to remain in their existing pension schemes rather than moving immediately to the new arrangements.
In 2018, the Court of Appeal found that these arrangements were discriminatory on the grounds of age. The Government subsequently introduced the 2015 Remedy, commonly known as the McCloud remedy, to put this right.
The remedy covers the period from 1 April 2015 to 31 March 2022. For affected members, the benefits they built up during this period will ultimately be based on whichever scheme is better for them, subject to the rules of the Remedy.
What happens if you're retiring now?
This is an important distinction.
The Civil Service Pension Scheme uses what’s called a Deferred Choice Underpin (DCU) for members who have not yet retired.
Since 1 October 2023, eligible members retiring have received an expanded retirement quote showing what their pension would look like under both their Legacy scheme and alpha for the Remedy period.
At retirement, members can then choose which benefits they want to receive for the period between 1 April 2015 and 31 March 2022.
In other words, if you are approaching retirement now, you should receive your Remedy options as part of your retirement quotation. You do not need to wait for the outstanding work affecting existing pensioners to be completed.
There can, of course, be individual circumstances which require additional work or information. The Scheme says that some cases, such as certain transfer arrangements, may need to be dealt with separately.
So who is still waiting?
The situation is different for members who had already retired before the Deferred Choice process was introduced.
These members are subject to what’s known as Immediate Choice. They need to be given information showing their options for the Remedy period and then choose whether they want their benefits based on their Legacy scheme or alpha.
The original Civil Service Pension Scheme timetable said that retired members would receive their Remediable Service Statement (RSS), setting out their Immediate Choice options, by 31 March 2025.
The RSS is intended to provide the information needed to make that choice, with members given 12 months from the date of their letter to make their decision.
What happened to the timetable?
The Remedy has already experienced delays.
The original timetable published by the Civil Service Pension Scheme in 2023 aimed for:
- 31 August 2024 – affected active members to have received their Remediable Service Statement information through their Annual Benefit Statement.
- 31 March 2025 – retired members to have received their Remediable Service Statement and Immediate Choice information.
- Members retiring from October 2023 onwards would receive their Remedy options through their retirement quotation under the Deferred Choice Underpin.
While the retirement process has continued under the Deferred Choice Underpin, the work required to deal with the remaining Immediate Choice cases has proved more difficult.
Where are we now?
This is where the current problems with pension administration come into play.
The remaining Remedy work is currently on hold while Capita deals with the wider problems affecting the administration of the Civil Service Pension Scheme.
That is particularly frustrating for existing pensioners who have been waiting for their Immediate Choice information. For someone already receiving their pension, the Remedy could mean a change to the benefits they have been receiving since retirement, but they cannot make their final choice until they have the information from the Scheme.
For people retiring now, however, the position is different. Your Remedy choice should form part of your retirement process and you should receive the relevant options with your retirement quotation. The Civil Service Pension Scheme has specifically stated that delays affecting Remediable Service Statements should not impact members who are planning to retire.
CSPA's view
We recognise that implementing the McCloud remedy is complicated. It involves reviewing individual pension records, recalculating benefits and providing members with information about two different pension schemes.
But for pensioners who have already retired, these delays have been going on for a considerable time.
The original timetable said that retired members would have their Immediate Choice information by March 2025. We are now well beyond that date, with some members still waiting.
For those members, this is not simply an administrative exercise. They are waiting to find out whether the Remedy changes the pension they are entitled to and which option is right for them.
CSPA will continue to press for the outstanding work to be completed as quickly as possible and will keep members updated as further information becomes available.
If you are affected by the McCloud remedy and have questions about your pension, CSPA members can contact our pensions support service for help and guidance.
