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UK passing $23 billion pension reform bill to workers, unions tell London court

UK passing $23 billion pension reform bill to workers, unions tell London court By Reuters

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Economy 5 minutes ago (Jan 31, 2023 15:01)

© Reuters. FILE PHOTO: Members of the Fire Brigades Union take part in a rally regarding possible future strike action linked to a pay dispute, in London, Britain, December 6, 2022. REUTERS/Peter Nicholls

LONDON (Reuters) – Two British trade unions challenging changes to public sector pensions told a London court on Tuesday that the government was unlawfully passing the 19-billion-pound ($23 billion) cost of discriminatory pension reforms onto workers.

The Fire Brigades Union and the British Medical Association (BMA), which represents 160,000 doctors and medical students, say Britain’s finance ministry is effectively making members of newer pension schemes foot the bill for its own mistake.

But the government says it was faced with a “basic choice” between asking public sector employees – and ultimately the taxpayer – or pension scheme members to bear the cost.

The union’s case follows a 2018 court ruling that the exclusion of younger staff from more beneficial “legacy” pension schemes, as part of wider government reforms, amounted to unlawful age discrimination.

The decision landed the government with a bill estimated at between 17 and 19 billion pounds in additional future pension payments to around three million public sector workers.

In 2021, the government included that bill in the valuation of public sector pension schemes – without which, the unions say, scheme members’ benefits would have increased or their contributions would have been reduced.

The unions’ lawyers told London’s High Court the decision was unlawful as it was taken without assessing other options.

They also argue that it is discriminatory against younger, female and ethnic minority members, who are more likely to be members of newer and less beneficial pension schemes.

Fenella Morris, representing the BMA, said in court documents that the government “could and should” have met the cost differently.

However, the government argued that any potential discrimination was indirect and justified, and that it considered a “variety of options” to deal with the cost caused by the 2018 ruling.

Its lawyer Nigel Giffin said in court documents: “The basic choice was whether that cost should fall on public sector employers … or whether it should be met by withholding from scheme members the improvements to benefits or reductions in employee contributions which they might otherwise have enjoyed.”

UK passing $23 billion pension reform bill to workers, unions tell London court

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