The UK government has issued a consultation that is seeking views on the draft regulations for the implementation of the McCloud remedy on NHS pension schemes.

As reported by our sister title, Pensions Age, with the Public Service Pensions and Judicial Offices Bill making its way through parliament, the government is consulting on a draft Statutory Instrument making changes to NHS pension schemes’ regulations necessary to implement the first part of the McCloud remedy.

The draft regulations propose amendments to scheme rules that are required to ensure the closure of the legacy schemes to future accrual and the transfer of all active members to the new 2015 NHS Pension Scheme from 1 April 2022.

The 2018 McCloud ruling found that changes made to firefighters and judges' pension schemes had been discriminatory, with the government later confirming that this would apply to all public sector pension schemes.

The consultation is similar to recent consultations for the Civil Service pension schemes and the Teachers’ Pension Scheme as the government looks to remedy the issues identified.

It is the first of two consultations to be published by the government on the NHS pension schemes, with this consultation focusing on amendments to facilitate the closure of the existing schemes to future accrual the movement of active members to the newer scheme.

Under the proposals, transferring members will retain a final salary link, so their legacy scheme benefits are calculated using pensionable pay at retirement, rather than at the point of transfer.

It is also seeking views on updating existing rules that make provision for the treatment and payment of legacy benefits during or following a period of membership of the 2015 scheme.

The second consultation, which will be published separately “in due course”, will focus on the implementation of the deferred choice underpin (DCU) and offer eligible members a choice over the set of benefits they wish to receive during the remedy period of 1 April 2015 to 31 March 2022, correct any overpayment or underpayment of pension benefits or member contributions already paid in relation to a member because of their choice, and facilitate the payment of appropriate compensation.

In this first consultation, the government has published the draft regulations and is asking respondents whether they agree or disagree that the proposed amendments deliver the policy objective and requirements set by the bill.

It also asked whether there were any further considerations and evidence that the Department for Work and Pensions should take into account when assessing any equality issues arising from the proposed amendments, and whether there were any other benefits, costs or wider impacts of the proposed amendments that had not been mentioned.

The consultation will close on 20 January 2022.

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