How the public service pensions remedy affects pension scheme administrators
Find guidance on how the public service pensions remedy (known as McCloud) may have affected you as a pension scheme administrator and what action you need to take.
This collection brings together all of the relevant guidance for pension scheme administrators whose members were impacted by the public service pensions remedy.
The public service pensions remedy is a solution to address the discrimination that occurred in the public service pension reforms from 2014. It involved making changes to the pensionable service of public service pension members over the ‘remedy period’. The purpose of the remedy is to make sure that members are, as far as possible, in the same tax position they would have been in if the discrimination had not happened.
The action you may need to take is different depending on the type of pension scheme you administer. These are split between:
- Chapter 1 schemes — these are any public service pension schemes other than schemes for judges or local government employees
- Chapter 2 schemes — these are judicial pension schemes
- Chapter 3 schemes — these are local government pension schemes
How members are affected
Members affected by the remedy are defined based on how they were treated during the remedy period. They are either:
- protected, this includes:
- Chapter 1 and Chapter 2 members who remained in the legacy scheme for all of the remedy period
- Chapter 3 members (for sub-schemes in England and Wales the remedy period started 1 April 2014) who would have been entitled to the final salary underpin when they started taking their benefits
- taper-protected — Chapter 1 and Chapter 2 members who remained in the legacy scheme for part of the remedy period, but moved to a reformed scheme before 1 April 2022
- unprotected — members who, from 1 April 2015:
- for Chapter 1 members, started to build up pension rights under a new scheme
- for Chapter 2 members, started to build up pension rights under a 2015 scheme
- for Chapter 3 members, (or from 1 April 2014 for sub-schemes in England and Wales) who would not have been entitled to the final salary underpin when they started taking their benefits
Members are also treated differently depending on their status in a scheme as of 30 September 2023. These are either:
- active members — those who were still building up pension benefits in their public service pension scheme and have not yet started taking any of their pension benefits
- deferred members — those who were no longer building up pension benefits in their public service pension scheme and have not yet started taking any pension benefits
- pensioner members — those who had started taking their pension benefits
- deceased member
Member guidance
HMRC Secure Data Exchange Service
You will need to register to use the Secure Data Exchange Service to transfer data to, and receive data from HMRC.
Changes in annual allowance
Changes to a member’s benefits as a result of the remedy may mean their annual allowance tax position has changed. Check how to calculate pension input amounts, find out how to request a refund and report a change.
Changes in lifetime allowance
If a member had a benefit crystallisation event during the remedy period, their lifetime allowance tax position may have changed. Find out how to request a refund, report a change, and how you may be able to discharge your liability.
How unauthorised payments are affected
Check how members’ who had, or may now have, unauthorised payment charges as a result of the remedy could be affected.
How pension contributions are affected
Check how member contributions should be treated during the remedy period.
Compensating members
Find out about compensation for members who now have overpaid annual allowance, lifetime allowance, or unauthorised payment charges.