Introduction of the CARE Scheme
In March 2011 the Hutton review of public service pensions recommended that public service pension schemes change from being based on final salary (like the Police Pension Scheme 1987 and New Police Pension Scheme 2006) to being based on the earnings in each year of membership (known as a Career Average Revalued Earnings, or CARE, scheme). The Government accepted this recommendation and the Police Pension Scheme 2015 (“CARE 2015 Scheme”) was introduced on 1 April 2015
Please find below further details about the scheme:
For information regarding schemes prior to 1 April 2015 please visit our general Pensions webpage.
Police Pension Scheme 2015 – the legal position
In 2010 a review of pensions was carried out across the public services known as the Hutton Review. As a result the Government brought in new schemes across the public services including a new police pension scheme. The new scheme, the Police Pension Scheme 2015 (the CARE Scheme), came into effect on 1 April 2015. PFEW opposed the introduction of the CARE Scheme and its application to existing officers. However, because the CARE Scheme was introduced by the enactment of new primary legislation which avoided the protections contained in the earlier legislation, and because the Government were not required to negotiate with it, PFEW could not prevent the changes.
A group of officers decided to mount a legal challenge against the transitional protections affecting members closer to retirement which were put in place as part of the introduction of the CARE Scheme. PFEW sought legal advice which strongly advised that any challenge was unlikely to be successful. This was based on case law in the UK and the rest of Europe supporting the use of transitional arrangements as not being discriminatory because they were a proportionate means to achieving a legitimate aim. Those cases also confirmed that governments have the right to make wide ranging changes to laws relating to social policy including pensions.
Throughout the pension reform process PFEW has listened to the views and concerns of members including the Pension Challenge group, and has worked to achieve the best deal it could for as many of its members as it could. PFEW has taken advice from its lawyers and from leading counsel about the legality of the Government’s changes. It also took further advice from leading counsel after the enactment of the Police Pension Regulations 2015 governing the CARE Scheme in order to ensure that the position had not changed.
All possible challenges have been considered including:
Public law as primary legislation was used to introduce the CARE scheme judicial review was not available.
European law and Human Rights law (in several recent cases the European Court of Human Rights has not been swayed by arguments that those on the public service have had to bear the brunt of economic reform)
Discrimination. (The key challenge here considered was whether these pension changes would be age discrimination: however, the law states that age discrimination can be justified as a proportionate means to a legitimate end, and it is likely to be considered as such in this instance).
At this time, we will therefore not be challenging the introduction of the Police Pension Scheme 2015. However, we will continue to monitor how the scheme operates in practice and we maintain an open mind should circumstances change that give rise to a potential successful legal challenge.
We have also produced a video which explains in more detail the issues we have considered. You can watch the individual frequently asked questions and answers as below or watch the whole film here.
Q1 What are the pension reforms about?
Q2 So, PFEW wasn't able to negotiate on these changes [to the career average (CARE) scheme]?
Q3 Who do these changes actually affect?
Q4 Is the CARE scheme as good as the 1987 pension scheme?
Q5 Is the CARE scheme better than the 2006 scheme that was introduced?
Q6 What is all this about a 'pensions challenge'?
Q7 What’s the basis of this legal challenge? What are they attempting to challenge?
Q8 Does the challenge include everyone?
Q9 Have you seen the legal advice that they [the challenge group] have been offered?
Q10 What’s the Federation position on transitional arrangements?
Q11 Why are you [PFEW] not taking the same action [as the challenge group]?
Q12 Why are you not funding the challenge?
Q13 What’s the PFEW legal advice on the introduction of these [CARE] pensions?
Q14 How many people have you actually sought [legal] advice from?
Q15 How much have you [PFEW] spent on your legal advice?
Q16 Why have you not published it [the PFEW legal advice]?
Q17 What actually happens if these pension challenge claimants win?
Q18 How confident are you that you’re legal advice is sound?
Q19 The Fire Brigades Union is taking action - why are they doing it and you’re not?
Q20 The judges are taking action, what's the basis of the judges’ claim?
Q21 Are you stuck in this position - is there anything that could happen that could change your mind?
We hope this will assist you in finding the necessary information; however, if you are unclear, please contact your local Branch who will be able to help.