Further to the proposed regulation changes outlined in January’s edition of Pensions Line and at the PLOG’s last week, we have received the following email from the Scheme Advisory Board:
The Government has today published a written statement which announces a pause in the cost cap process for public service pension schemes pending the outcome of the application to appeal the McCloud case to the Supreme Court. A copy of the judgement can be found here
Although the statement gives no timescales for the outcome of this case we understand it could be late 2019 or early 2020 before we know.
The LGPS Advisory Board (SAB) will now consider whether, given this announcement, it should withdraw the benefit change recommendations made to MHCLG as a result of its own cost cap process.
We understand that the LGPS could, if McCloud is upheld, be required to make changes to the underpin and that such changes would need to be taken into account in a revised SAB cost cap result.
In taking a view, the SAB will be aware that delaying benefit changes to possibly 2020 while backdating them to April 2019 would constitute a significant administrative burden on administering authorities and employers. Although SAB will immediately start considering next steps it should be stated that even if the SAB wishes to press on any changes to benefits can only be made with the agreement of Government.
Therefore although administering authorities may wish to continue to prepare for the SAB recommended cost cap benefit changes (as set out in our email of the 21st December) they should not anticipate their implementation unless and until such time as MHCLG formally consult on them.
We will naturally keep you updated as we hear more.