What is the consultation for?
The consultation is to put in place the scheme regulations to give the scheme manager the power to put right the discrimination identified following the introduction of the 2015 reformed public service pension schemes (alpha) for the Northern Ireland Civil Service.
What does this mean for Northern Ireland Civil Service Pension Scheme members?
This will allow Civil Service Pensions, as scheme administrator, to start offering ‘remedy’ options for all in-scope members, as soon as is reasonably practicable after 1 October 2023. This follows many months of planning and work developing the systems needed to carry out this work. The consultation covers the proposed new Northern Ireland Civil Service Pension Scheme regulations that will allow for the 2015 Remedy (McCloud) work to be carried out.
Members will be given the choice between legacy PCSPS(NI) pension scheme benefits (Classic, Classic Plus, Premium and Nuvos) or pension benefits equivalent to those available under the 2015 reformed scheme (alpha) for service during the period 1 April 2015 to 31 March 2022, which we call the remedy period.
We will give members a choice of pension benefits for those 7 years when they retire. For eligible members who already have a pension in payment, a choice will be offered as soon as is practical after 1 October 2023.
The proposed scheme regulations aim to cover all aspects of members' pension benefits and rights that may be affected by the discrimination and the remedy process.
Why is this happening now?
It was always planned to do this work in 2 phases; the first phase happened on 1 April 2022 when all current Northern Ireland Civil Servants were put into a single scheme (alpha) and the Classic, Classic Plus, Premium and Nuvos Sections of the PCSPS(NI) were closed.
This second phase concerns the treatment of a member's pension rights built up between 1 April 2015 and 31 March 2022. To begin with, we will put all members who were placed in alpha on or after 1 April 2015 into their appropriate legacy PCSPS(NI) Sections (Classic, Classic plus, Premium or Nuvos) for this period. This will put all affected members in the position they were in before the discrimination happened.
Why has it taken so long to get to this point?
The main reason is the size of the task. The 2015 Remedy (McCloud) affects all Public Service Pension Schemes who introduced reformed schemes on or after 1 April 2015. For Northern Ireland Civil Service Pensions there are approximately 40,000 members in scope of the remedy.
The Department of Finance has been overseeing the delivery programme across all public service schemes in Northern Ireland, including Northern Ireland Civil Service Pension Scheme. They have led on the legislative changes needed for NI schemes as set out in the Public Service Pensions and Judicial Offices Act 2022 (PSPJOA). This Act sets out the framework for how schemes must carry out the remedy for their members.
In addition, HMRC is introducing new tax legislation to make a number of technical changes to the tax treatment of those impacted by the remedy. It aims to put people, as far as possible, in the tax position they would have been in, had the discrimination not happened. It does not apply more widely.
Why are members being moved back to the PCSPS(NI) Classic, Classic Plus, Premium or Nuvos schemes?
This is part of the government’s remedy design. When the proposed scheme regulations come into force, the PSPJO Act directs that all members who were put into alpha on or after 1 April 2015 are returned to their former (legacy) scheme, known as rollback. This removes any difference in treatment in terms of scheme membership for the remedy period. The remedy policy and scheme regulations are designed to operate from this starting point. This was the subject of a public consultation in 2022.
Why is there a public consultation?
To give members affected by the remedy, unions and any other interested parties the opportunity to review and comment on the scheme regulations and the policy behind the remedy solutions.
We believe that the proposed scheme regulations and policy behind the regulations are fair and will remove the discrimination, by allowing members the choice between their Legacy scheme or 2015 reformed scheme for the 7 year remedy period.
We may not have thought of everything, so this is an opportunity for others to contribute their thoughts whether that be to agree or to raise something new. We are extremely keen to receive feedback from members and the public to help shape the regulations that are put in place.
Have equality considerations been taken into account?
Yes. An equality screening exercise has been carried out to accompany the draft regulations, this has been published with the proposed scheme regulations.
What happens next?
The consultation will run until 2 June 2023. When the consultation closes all the responses will be reviewed and any matters that need further thought or clarification will be addressed, and this may mean amending the proposed regulations. A full consultation response will be issued in September 2023.