Government denied leave to appeal landmark pension case
The case centres on transitional protections provided to older public sector workers as part of reforms introduced in 2015.
In a decision published in December 2018, the Court of Appeal ruled the protections – which ensured older scheme members could continue to benefit from the previous, more generous arrangements – discriminated against younger employees.
The Supreme Court has now confirmed an attempt to appeal the ruling has been rejected.
Tom Selby, senior analyst at AJ Bell, said: “Members of public sector schemes look set to receive a huge retirement boost after the Supreme Court refused to hear the Treasury’s appeal in this landmark age discrimination case.
“The transitional arrangements introduced alongside reforms to public sector schemes back in 2015 were designed to appease trade unions. This concession has now come back to bite the Treasury in the backside to the tune of £4bn a year. While for those affected this is clearly great news, it could not have come at a worse time for the Government.
“With Brexit leering over Whitehall like a Dementor, sapping the life out of every department approaches, the last thing a new Prime Minister – and most likely a new chancellor – wants to find is a ready-made black hole in the nation’s finances.”
Chief secretary to the treasury Elizabeth Truss detailed the £4bn cost in a written statement in January. It said: “The provisional estimate is that the potential impact of the judgment could cost the equivalent of around £4bn per annum. If the government is successful in court, we will implement the changes to employee benefits as planned. If the government is defeated, employees will be compensated in a way that satisfies the judgment.”