The employment tribunal has recently ruled in favour of judges in a challenge to changes to the judicial pension scheme.
In McLeod and Others -v- the Lord Chancellor and Secretary of State for Justice and Another (ET/2201483/2015) an employment tribunal considered changes made to pension provision for the judiciary introduced in 2015. The existing judicial pension scheme closed in March 2015 and was replaced by the new judicial pension scheme. The new scheme provided a lower level of benefits as follows:
- lower accrual rate on a career average rather than final salary basis;
- removal of lump sum entitlement;
- aligning normal pension age to state pension age; and
- smaller survivor's pensions.
Transitional provisions were introduced meaning that older judges would remain in the existing judicial pension scheme either until their retirement or up to an end of a period of tapered protection. Judges born before 2 April 1957 were therefore unaffected by the changes.
Claims were brought by judges on the basis of indirect sex and race discrimination as younger judges were more likely to be female or of an ethnic minority. Claims were also brought on the grounds of age discrimination.
The government accepted that changes involved less favourable treatment because of age and that there was a disproportionate impact on female and ethnic minority judges. However, the government's argument was that there was a legitimate aim in implementing the changes namely to protect those closest to retirement from the financial effects of the change in pension.
Employment tribunal decision
The employment tribunal held that the transitional provisions were not objectively justified. The government had failed to show that treatment of the claimants was a proportionate means of achieving a legitimate aim. In the employment tribunal's view, those closest to retirement would not be most adversely affected by the reforms because they would have accrued a higher level of pension benefits under the old, more generous scheme.
The tribunal stated that even if it had accepted the government's aims, it would have concluded that the transitional provisions were not proportionate. The tribunal concluded that, in considering proportionality it was necessary to consider whether the chosen means were appropriate and reasonably necessary to achieve the aim. In this instance the employment tribunal concluded that the transitional period was arbitrary.
The transitional provisions were previously recognised as being potentially age discriminatory by the Independent Public Services Commission, set up to examine the reform of public sector pension schemes. The Commission's report (at paragraph 7.34) stated that special protections for members over a certain age should not be necessary.