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A New Judicial Pension Scheme (NJPS) was introduced in April 2015 under the Public Service Pensions Act 2013. Active scheme members on that date were transferred to it, except those covered by transitional protection arrangements for those ‘closest to retirement’, who were able to remain in their existing scheme (for most serving salaried judges, the scheme established under the Judicial Pensions and Retirement Act 1993 (JUPRA)) either until retirement or for a limited period, depending on their age.

The NJPS Scheme has significant differences from the earlier schemes. In particular:

  • It provides pension benefits based on career average revalued earnings (CARE) rather than final salary;
  • Members have a pension age linked to their State Pension age; and
  • It is registered for tax purposes (whereas the pre-existing schemes were tax-unregistered, which meant that members were not subject to annual allowance and lifetime allowance limits on tax-relieved benefits accrued within the schemes).

The MoJ says the 2015 reforms – which were largely consistent with those for other public service pension schemes – have had a disproportionate impact on the judiciary, leading to recruitment problems:

The comparatively high level of judicial salaries, and the fact that many senior judges have accrued significant private pensions before taking up judicial office, mean that tax charges are felt more acutely and by a significant proportion. Many in legal practice may have accrued significant private sector pensions approaching the lifetime allowance limit, in which case joining a tax-registered pension scheme is unlikely to be an incentive to leave private practice and join the bench. This is a clear impediment to attracting the best talent to the salaried judiciary. (Consultation on proposals for a reformed judicial pension scheme , July 2020).

The transitional protection arrangements for the 2015 pension reforms, were challenged in the courts. In January 2017 an Employment Tribunal found in McCLoud v Ministry of Justice, that the transitional arrangements for judges were unlawful. This was upheld by the Court of Appeal, which in December 2018 concluded that:

  • We have found that in both the judges’ and firefighters’ cases the manner in which the transitional provisions have been implemented has given rise to unlawful direct age discrimination. In neither case could the admitted direct age discrimination be justified. In the Judges’ case we see no error in the reasoning of Judge Williams either in his assessment of aims or means.

It remitted the matter back to the Employment Tribunal to determine a remedy in respect of the litigants (HCWS 1725, 15 July 2019)

On 17 July 2020, the Ministry of Justice launched a consultation on a proposal to give judges in scope of McCloud, a choice whether to have retrospectively accrued benefits in either a pre-reform scheme or the NJPS from 1 April 2015. The choice would be made via a formal ‘options exercise’ after April 2022. At the same time, it is consulting on proposals for a reformed judicial pension scheme which it intends to introduce for future service from April 2022. The proposal is that all active scheme members would transfer to the new scheme. Most of the features of this reformed scheme would be in line with the principles of the 2015 public service pension schemes but it would be non-registered for tax purposes.

The MoJ is also responding to separate litigation in the O’Brien and Miller cases, which established the entitlement of fee-paid judges to pension benefits in respect of service before 2000.

There is a separate consultation on proposals to increase the mandatory retirement age for judges from 70 to 72 or 75.

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