McCloud is commonly used to refer to the court judgment which ruled that the protection given to older members of the public service pension schemes, when they reformed to CARE Schemes, was discriminatory.
For the LGPS the discrimination related to the underpinning of the pension a member would receive for pensionable service during the period 1 April 2014 to 31 March 2022, as this protection was only applied to members who, on 31 March 2012, were within 10 years of reaching their 65th birthday. Members who benefited from this protection would, on their retirement, receive the higher of their CARE pension or the pension they would have received if the LGPS had continued to be a final salary scheme; this protection is referred to as the statutory underpin.
The government now proposes to extend the statutory underpin to all members who were previously excluded because they were more than 10 years away from reaching their 65th birthday. However, while the government has held a consultation on the proposed extension of the statutory underpin and the regulations that will govern this protection, it is unlikely that many members will see a change to their LGPS benefits. This is because CARE pension builds up much faster than final salary pension. For example, £10,000 of pensionable pay would build a CARE pension of £204.08 whereas the final salary pension would only be £166.67.
However, even though the statutory underpin may rarely apply, it will be an automatic protection. This means you won’t need to apply for it, if you are eligible to benefit from it, you’ll get it.