Brought on by the 2015 reforms, members of all the public service pension schemes (including firefighters, police, NHS, Civil Service, Teachers, LGPS, Judicial and Armed Forces) were treated differently based on their age. To date, close to £16bn has been spent to remedy this. In July of this year, the government confirmed its commitment with the Employment Tribunal to rectify these discrepancies and to protect schemes from unaffordable costs.
While we await to hear more about the remedy, our experts have identified four ways that schemes and scheme administrators can get ahead of the game:
Identify members likely to be affected
This is vital for administrators to estimate the size of the challenge ahead and to best plan data collection and resourcing early on.
Identify gaps in your data that require a data cleanse and any additional data needed from employers or payroll providers.
Calculate benefits using the remedy
To make sure that benefit calculations set out by the remedy in the future are performed correctly, this will mean changes to the system for all active members. Choices might need to be extended for certain members, this can be determined by running an options exercise.
Communicate the changes to members
There will be many facets and parts to the remedy which can cause confusion amongst members. Messages about benefits need to be carefully handled to reassure members.