Do I have underpin protection?

In 2014, the LGPS changed from a final salary scheme to a career average scheme. Older members who were closer to retirement were protected from these changes. Members were protected if they met these conditions:

 

 

When a protected member retired, their pension fund compared the career average pension they built up before age 65 with the pension they would have built up in the final salary scheme. If the final salary pension was higher, the difference was added to their pension. This protection is called the underpin.

 

There were problems with the underpin. The ‘old’ rules did not guarantee that all protected members got a pension at least as good as they would have got under the final salary scheme.

 

 

The courts ruled that younger members of the firefighters’ and judges’ pension schemes had been discriminated against because the protections for older members did not apply to them. This ruling is known as the McCloud judgment after a member of the Judges’ Pension Scheme involved in the case.

 

The Government committed to changing all public service pension schemes, including the LGPS, to remove the discrimination. These changes are known as the McCloud remedy.

 

 

The LGPS rules changed from 1 October 2023 because of the McCloud remedy. The changes are backdated to 1 April 2014, when the career average scheme started. If you qualify for underpin protection, you will be protected even if you have already left the LGPS or taken your pension.

 

The McCloud remedy means two main changes for LGPS members:

 

 

The new underpin rules are very complex and will affect a large number of members. Merseyside Pension Fund must review all the pensions it is paying to work out which ones will increase. Although these changes came into force from 1 October 2023, it will take your the Fund some time to review all the pensions it is paying.

 

 

Not all LGPS members are affected by the McCloud remedy. You can use the 'Am I affected?' tool to find out if you are affected. The basic rules are also set out below.

 

You will not be affected by the McCloud remedy if:

 

 

Your LGPS pension is protected by the McCloud remedy if:

 

 

Underpin protection only applies to pensions built up in the remedy period (1 April 2014 to 31 March 2022). The protection stopped earlier if you left the Scheme or reached your final salary normal retirement age (usually 65) before 31 March 2022. 

 

There’s no underpin protection from 1 April 2022 onwards. Pensions built up after this date are based on the career average scheme only.