Public Service Pensions And Judicial Offices Act 2022

Overview of the Act

1. The Public Service Pensions and Judicial Offices Act 2022 ("the Act") includes measures that:
   1. Address discrimination that arose when existing public service pension schemes were closed to certain members between 2014 and 2016;
   2. Deliver changes to public service pension schemes to ensure that all eligible public service workers have access to high quality defined benefit schemes on a fair and equal basis;
   3. Ensure there are no reductions to members’ benefits following completion of the cost control element of the 2016 valuations, and that the cost control mechanism will be reformed ahead of the completion of the 2020 valuations;
   4. Improve the terms for judicial resourcing to support the effective functioning of the judiciary, to meet future demands; and
   5. Confer powers upon the Treasury to establish new pension schemes to house the pension liabilities of UK Asset Resolution (UKAR) Limited.
2. When reformed public service pension schemes were introduced in 2014/2015 (in each case, a "new scheme") the Government agreed, following discussions with trade unions, to allow active members of pre-existing public service pension schemes (in each case, a "legacy scheme") who were close to retirement to remain in those schemes, rather than requiring them to start to accrue pension benefits in a new scheme. This was called transitional protection.
3. Following a judgment by the Court of Appeal that found transitional protection to be unlawfully discriminatory in the schemes for the judiciary and firefighters, the Government consulted on proposals to allow all eligible members of the main public service pension schemes a choice between legacy and new scheme benefits in respect of any pensionable service between 1 April 2015 and 31 March 2022, so that they are able to opt for the benefits (new scheme or legacy scheme) of the greatest value to them. Eligible active and deferred members of the main public service pension schemes will be able to make this choice close to the time that their pension benefits are paid when it is clearer which option is most beneficial for them. Some members with relevant service are already in receipt of pension benefits in relation to the affected period. This group will be able to choose which benefits they wish to receive in relation to their affected service once all relevant legislation comes into force and where there is a change in entitlement as a result; any change will apply retrospectively.
4. Separate arrangements are being made in the local government pension schemes because the transitional arrangements in those schemes were made in a different way. Judicial scheme members will make an immediate choice given the unique nature of their legacy schemes. All members of the public service schemes, regardless of age or joining date, will accrue benefits in the relevant new scheme from 1 April 2022. This aims to ensure fair and equal treatment going forward.
5. This Act recommits to the objectives underpinning the 2015 reforms: fairness between lower and higher earners; value for the taxpayer; and ensuring a sustainable, affordable approach is taken to public service pensions. Measures in the Act deliver changes that will ensure greater fairness in future public service pension provision and provide members with greater certainty about their benefit entitlement.
6. Taken together, the Act: ensures that public service pension benefits are affordable, sustainable and form part of a generous remuneration package for public servants; brings forward bespoke measures required to support the judiciary now and in the future; and confers the necessary powers on the Treasury to establish new pension schemes for the pension liabilities of UKAR.