Heywood Pension Tech
Heywood welcomes the government’s latest consultation on rectification of age discrimination in the LGPS, which follows the publication of its response on the initial consultation on amending the statutory underpin. This is an important step in ensuring that pension scheme members across the public sector receive the benefits they are entitled to following the McCloud judgment.
We are pleased to note that the supplementary issues consulted on better align the LGPS with other public service pension schemes. This extends protections to the individual rather than a particular employment, where a transfer or change of employment has taken place. At the same time, this reduces the level of administrative burden in asking members to revisit historic decisions and should simplify communications. We acknowledge that this may result in additional data collection requirements and remain committed to assisting our customers in meeting those requirements.
There are several unique challenges to implementing the McCloud rectification in the LGPS, including aggregation, flexible retirement, and excess teacher service (part-time membership built up by teachers which was not able to be credited to the Teachers’ Pension Scheme under final salary scheme rules). It is positive to see the government’s acknowledgement of those challenges and commitment to working with the sector to reach outcomes which provide the best member experience possible.
We also welcome sight of the draft statutory instrument which will enact the proposals into law.
Heywood is considering the proposals and draft regulations in detail from a technical perspective and will be responding to the government's consultation by the deadline of 30 June.
The implementation of McCloud is one of the largest and most complex retrospective rectification exercises that many scheme administrators will face in their lifetimes. The effects of which are likely to be felt for many years into the future – until the last member with legacy scheme service retires. There is also the possibility that further legal challenge will arise because of the rectification exercise.
Heywood will continue to evolve and develop data-driven, technology-enabled solutions to help its customers meet those complex challenges and comply with changes in legislation, both now and in the future.
