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NAHT Northern Ireland

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NAHT Northern Ireland represents principals and vice-principals in around two-thirds of 1,150 schools in Northern Ireland. NAHT Northern Ireland provide advice, training and support for its members on a range of issues faced by senior leaders in schools. Along with our colleagues in England and Wales, we are there to defend and extend the rights of school leaders.  

NAHT NI is democratic and member-led, and supported by its Belfast-based team of staff alongside their colleagues based in both Wales and England.

NAHT Northern Ireland
Carnmoney House
Edgewater Office Park

Belfast
BT3 9JQ

nahtni@naht.org.uk
02890 776633 

The government responds to the consultation on arrangements to rectify the age discrimination in public sector pension schemes in Northern Ireland

Key takeaways for the Teachers' Pension Scheme (TPS) NI members

The government has chosen the 'deferred choice' option. This was NAHT's preferred approach, and it means that members of the TPS will only be required to make a choice about their pension when they retire. This is good news because you will have as much certainty as possible at this point.

Members do not need to take any action in relation to their pension in the NI TPS at the moment. The NI TPS will soon begin an exercise to address all pensions to ensure that the remedy (if applicable to that person) is applied. It will start with any pensions that have already been paid out that require revisiting, and then it will look at pensions that are not already in payment.  The NI TPS will contact you about this; you do not need to take any action.  Please note this process is complex and will take considerable time.

If you consider retirement in the near future, your pension will likely be paid based on the current regime. However, as noted above, the NI TPS will contact you when it is ready to review the pension you have been paid. Again, no action is needed, and you do not need to delay taking your pension if this is what you were planning. 

Context

Last year, the Department of Finance consulted on proposals to remove age discrimination from public sector pension schemes, including from the Teachers' Pension Scheme NI (TPS), in the wake of a court judgement from 2018.

There was a separate consultation for the schemes impacted in England and Wales, which you can access the details for that response here.

Background in relation to the TPS

The proposal follows court cases brought by judges and firefighters in the wake of changes in 2015, when members of the UK's public sector pension schemes were compulsorily transferred to less generous new schemes. However, in the NI TPS and other similar schemes, scheme members within 10 years of retirement age were permitted to remain in their previous, often more generous, schemes rather than transfer to the new schemes.

In December 2018, the Court of Appeal (CoA) ruled that the Ministry of Justice had discriminated against younger judges on the grounds of age (because older people were protected, and younger people weren't). It found in favour of a group of firefighters on the same issue. The court said the government must remedy the discrimination.

The government proposed to provide members with the option to choose between receiving legacy (the former, final salary scheme) or reformed scheme (the new, career-average scheme) benefits in respect of their service between 1 April 2015 and 31 March 2022 (known as the 'remedy period').

The consultation sought views on that proposal, and especially on which of the two possible approaches should be taken when making this choice and how each of these approaches might work. The two possible approaches were as follows:

  1. An immediate choice – here, members would make this decision in the year or two after the point of implementation in 2022 (which might be many years ahead of their retirement and at a time when there is still some uncertainty over the precise benefits that would accrue to them in the alternative schemes)
  2. A deferred choice underpin (DCU) -  here, a decision would be deferred until the point at which a member retires (or when they take their pension benefits). 
The government's decision

Following extensive feedback, including from NAHT, the government has confirmed implementing the 'Deferred Choice Underpin' to remedy the discrimination.

This means that those affected will receive a choice of which pension scheme benefits they would prefer for the period between 2015 and 2022 (known as the remedy period). The choice will be between the legacy (final salary) or career-average (reformed) scheme benefits.

The choice will be made at the point in time when benefits are put into paymentwhich for the majority of individuals, will be at retirement.

The response also confirms that the final salary (legacy) scheme will end on 31 March 2022. Any pension members have built up in the final salary (legacy) scheme up to that date, and the normal pension age at which benefits can be taken in full, are protected.  This means that from 1 April 2022, all legacy scheme benefits will remain in place, but benefits for future service will then build up in the career-average (reformed) scheme. 

NAHT's view

NAHT welcomes the government's decision to implement the deferred choice underpin. As outlined in our response to the consultation, NAHT believes this option maximises the likelihood individuals will be able to choose the scheme that's most beneficial for them. We also feel this option is fairer, given all members will decide at the point of retirement where no assumptions on life and career choices will have to be made.

Next steps

Members do not need to anything at this stage. The NI TPS will contact those affected, and it is currently working on the timescales for this.

We would encourage members to keep up to date with the information provided by the NI TPS. There is also a helpful leaflet that members may wish to look at.

NAHT will continue to work closely with the government and the NI TPS on the implementation of the decision to ensure it remains as appropriate as possible for members, including consideration of some of the technical issues this change will create, and that members are effectively supported to make the best decision for them and their situation at the point of retirement.

First published 02 March 2021