Pensions Update

IMPORTANT NOTE: This summary attempts to condense 10 years of pension reform into one readable article. For definitive positions you must refer to the JCC Circulars over this time. We appreciate though that some will want a more general briefing- this is what this document tries to do here but potentially at the expense of important detail.

In 2010, the then UK Coalition Government established a pensions commission, chaired by Lord Hutton to review public sector pensions. Lord Hutton reported that the current structures were financially unsustainable and needed immediate reform.

In 2011, the commission recommended changing almost all public sector schemes from final salary schemes to career average schemes. Many Scottish Police Pension Scheme members, who constitute a tiny fraction of the numbers impacted, were affected by these UK reforms.

All possible challenges were considered including age discrimination. We were advised that the in law, age discrimination could be justified if the discrimination was a proportionate means of achieving a legitimate aim. Our legal advice considered the prospects of successfully challenging this discrimination as poor. Following that legal advice, the SPF did not pursue legal action and continued to monitor the entire matter. This was the position that was adopted by majority of Staff Associations and Unions across the public sector.

Over the next four years, the SPF, along with other police staff associations, whilst maintaining opposition to the changes, worked hard to achieve the best possible pension provision for its members. This was against an inferior pension scheme design that would have been imposed had the police staff associations not done so. It is important to understand that pensions are not negotiable. Concessions were however achieved, not least the ability of Police Officers to realistically retire at 55 instead of 60.

Transition – The Initial Proposal

When the UK Government’s initial proposals were first set out, it was proposed that on the first day of the new scheme (1st April 2015), that everybody would move to the 2015 CARE scheme. This could see somebody due to retire a day after 1st April 2015 with 30 years’ service having to work for another 11.5 years to access their full pension benefits.

In response, SPF and others argued that, if a new scheme had to be introduced, all existing officers should remain on the scheme that they had started on when they joined.

The Government rejected this proposal on grounds of “affordability” and instead a ‘tapering’ mechanism was introduced whereby the changeover date to the new scheme would vary dependent on an officer’s age and service. This meant that older officers were in a better position than younger officers.

The Legal Advice

Whilst obviously an inequality, the question was whether that age discrimination was justified. The SPF legal advice at the time advised its decision-making body, the Joint Central Committee, that the prospects of successfully challenging the justification were poor. The Joint Central Committee accepted this advice and decided to monitor events.

A challenge to this discrimination was taken by McCloud (a Judge) and Sargeant (a Firefighter) and last year the Employment Tribunal finally found in their favour. As a consequence, the transitional arrangements have been levelled out across almost all public sector schemes. Following on from this judgement, SPF is now funding the recent claims for “injury to feelings” by members impacted.

Pension Challenge

A number of Police officers who were unhappy with the pension changes chose to join the “Pension Challenge” group and privately funded their own action through Leigh Day solicitors.

This action was done independently of the Scottish Police Federation. Like all private actions, those who took the risk of incurring legal expenses will not be reimbursed by those who didn’t.

The Cost Cap

Separate but related to this dispute is the “Cost Cap”. Police pensions are paid by contributions from serving members, and the employer (the Police Authority supported by the Scottish Government). The amount of contributions from each party are reviewed every four years and are determined on actuarial data such as how long you are expected to live after retirement. In 2019, the first review identified that members would be paying in too much and the employer too little. More money needed to be returned to members and it was decided that this would be done by increasing the annual growth in a member’s pension. This was to be funded by an increase in the employer contributions.

When the McCloud/Sargeant case was determined, the UK Government stated that whilst the employer contributions would still go up, they would retain the member benefits (the additional growth) to help pay for the cost increases of the Appeal Court judgement. SPF, along with Trade Unions are legally challenging this decision.

Had the member benefits been passed on (in the absence of the McCloud/Sargeant challenge) then younger officers on the CARE scheme would have received significantly enhanced benefits too. What this demonstrates is the complexities of the pension environment and the multitude of factors SPF officials have to consider when representing all our members.

What now?

The UK Government has put forward proposals to deal with the McCloud/Sargeant case. Broadly speaking, officers who were in the scheme prior to April 2012 will not move on to the CARE 2015 scheme until 31st March 2022. If you have not retired by that date then you will still move on to the 2015 scheme at that point.

Shortly after the Appeal Court judgement, SPF and others identified that there are some members and indeed survivors who would be better off on the CARE 2015 scheme. This was acknowledged by the Government and the option to choose to stay on the CARE 2015 scheme is to be given to those affected by this judgement.

The Government has now launched a consultation on when that choice should be made- immediately (immediately means April 2022) or at the point of retirement. It is important note that this is the extent of the consultation, it is not an opportunity to revisit the unfairness of pension reform, it is a” do you want to choose now or later” question.

The consultation has over 20 questions and SPF will of course respond representing the best interests of all our members but we would encourage anyone interested to read the information that the Government has published.


To further complicate matters, part of that consideration will also need to factor in tax implications. As a consequence of the last Scottish police pay deal, a number of Federated members became liable for a tax charge due to the annual increase in their (salary related) pension. Under the 1987 scheme, we can expect that number to increase dramatically. It would be unacceptable to see officers get increased benefits only to see these benefits eroded or even wiped out by a tax bill.


Police Pensions are technically very complicated, but they are also very valuable. The Government pays in another 23% of your salary into your pension and they offer ill health and death benefits that are unrivalled by any other pension or investment. The Police CARE 2015 pension remains one of the best pensions in the country and the envy of many, it’s just not as good as the previous version.

The CARE pension is here to stay and nothing in the judgements have changed that. The issue in dispute has been about when people transition to it. For those affected, that will be in 2022, but with the option of moving earlier if people so choose. The consultation just now is about when that choice is made. We encourage you to now read the documents and feed your thoughts in through your Federation representatives to shape our response back to Government.