HSC Employer – Notice to Scheme Members
Public service scheme members with fixed or enhanced protection
If, you are a member of the HSC Pension Scheme and hold a form of fixed or enhanced protection from lifetime allowance (LTA) charges, you will need to take action before 1 April 2022 if you want to avoid losing your protection.
You may wish to seek independent financial advice to help understand the impacts and decide the best course of action regarding protections from lifetime allowance charges.
In 2015, new career average schemes were introduced to replace a range of existing public service pension schemes. These career average schemes are commonly referred to as reformed pension schemes. The introduction of these reformed schemes was accompanied by transitional protection which meant members within 10 years of their pension scheme’s normal pension age when the reforms were announced in 2012, could remain in their existing scheme (legacy schemes) until they retired. Those within 10 years and 13years 5 months from their normal retirement age remained in their legacy scheme for a period of time after 01/04/2015. All other members moved to their reformed scheme immediately. It was this difference in treatment that the court found to be discriminatory (the McCloud case).
From 1 April 2022, all active members of public service schemes will accrue benefits under the reformed pension scheme.
To remedy the discrimination, in 2023 schemes will return individuals to their legacy scheme for the period 1 April 2015 to 31 March 2022. This will mean that individuals who originally lost their enhanced or fixed protection solely due to joining the reformed scheme (and not due to a subsequent action, such as benefit accrual) will not have lost their protection. However, they will lose their protection if they accrue benefits under the reformed scheme from 1 April 2022.
To keep fixed or enhanced protection:
- individuals who have not yet joined the reformed scheme will need to opt out of joining that scheme by 1 April 2022.
- individuals already in the reformed scheme will need to stop accruing benefits from 1 April 2022.
If you are impacted by this ruling and do not wish to lose your fixed or enhanced protection should visit the HSC Pension Scheme website at Leaving the Scheme – HSC Pension Service (hscni.net) to find out how to:
- opt out of the reformed scheme
- stop accruing benefits from 1 April 2022
Further guidance on what members need to do to reinstate their protection as a result of the 2023 McCloud remedy, will be provided at a later date.
PLEASE NOTE THIS RULING DOES NOT APPLY TO INDIVIDUAL PROTECTION 2014 OR INDIVIDUAL PROTECTION 2016