Unions Slammed as High Court Dismisses McCloud Remedy Cost Challenge
The Fire Brigades Union (FBU) and British Medical Association (BMA) have suffered a major blow after their legal challenge over pension cost controls was thrown out by the High Court.
What’s the McCloud Remedy?
The McCloud remedy fixes unlawful discrimination in public service pensions dating back to 2015 reforms. It adjusts transitional arrangements to make them fairer for workers.
Cost Cap Mechanism Explained
Public service pension schemes must stick to a cost cap. Scheme expenses are checked at each actuarial valuation. If costs stray too far from the target, pensions or contributions are adjusted to bring things back in line.
The Government decided the costly McCloud remedy — pegged at a whopping £19 billion — should be factored into this cost cap.
High Court Backs Government Decision
Mr Justice Choudhury ruled the Treasury’s decision to include McCloud costs in the cost cap was perfectly legal. The unions’ Judicial Review bid was dismissed on all counts, though an appeal might still be on the cards.
Why GAD’s Advice Matters
The Government Actuary’s Department (GAD) calculated the McCloud remedy cost during 2016 valuations. It warned that if employers had to cover the remedy costs alone, schemes’ expenses would fall below targets.
This would force benefit boosts or lower member contributions, making costs unbalanced if McCloud weren’t included in the cost cap mechanism.
The unions’ challenge may be over for now, but the pension fight is far from settled.
