Jurisdiction(s):
United Kingdom

McCloud Remedy costs are member costs: Court of Appeal upholds Treasury Directions; no indirect discrimination, no duty to consult, and PSED challenge fails under PSPA 2013 cost control mechanism

Published on: 30 April 2024

Published by a LexisNexis Pensions expert

Legal News

Article summary

R (on the application of the British Medical Association) v His Majesty’s Treasury and another; R (on the application of The Fire Brigades Union and others) v His Majesty’s Treasury and another [2024] EWCA Civ 355

What are the practical implications of this case?

Barring any further appeal, the Court of Appeal’s ruling places the McCloud Remedy’s costs on present scheme members, in the same way as other valuation components tied to member profiles (for example life expectancy and pay growth), rather than on scheme employers. Employers, together with the Exchequer, continue to shoulder variability from financial and technical assumptions, such as the discount rate and actuarial methods. Unsurprisingly, members are unlikely to view this favourably, particularly where it can fairly be said that the government’s own failure to avoid discriminatory treatment when setting up the new public sector pension arrangements gave rise to the McCloud Remedy in the first place. Nevertheless, the outcome aligns with the way the Remedy has been constructed and with the policy context of the PSPA 2013, notably the perceived need to curb the cost to taxpayers of public sector pensions...

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