Employment and pensions

UK Public Service Pensions Update | January 2024

Published on 23rd Jan 2024

Welcome to the latest edition of the UK Public Service Pensions Update

Close up of people in a meeting, hands holding pens and going over papers

This month, the developments we consider include the publication of the Pensions Regulator's long-awaited general code, some important changes relating to the recoupment of past overpayments and the Retained EU Law (Revocation and Reform) Act 2023.

If you would like to discuss any of the items in this newsletter, please contact one of the experts listed at the end.

LGPS | Scheme Advisory Board statement on surplus

Following the increase in funding levels at the 2022 valuation and the further improvements in funding levels seen by some funds as the result of subsequent market movements, the Local Government Pension Scheme (LGPS) Scheme Advisory Board has issued a statement on surplus. The LGPS statement is aimed at employers, fund officers and pension committee and board members. It is also aimed at scheme members and advisers. It covers topics such as partial termination and negative contribution rates.

2020 valuation | Firefighters' Pension schemes

The Government Actuary's Department (GAD) has published the valuation of the Firefighters' Pension Schemes (England) as at 31 March 2020. GAD's key conclusion is that there is no breach of the cost control mechanism and so no need for the home secretary to consult on changes to the scheme.

2016 valuations | Cost cap

GAD has also published the 2016 valuation cost cap reports for all of the public service pension schemes.

The Pensions Regulator | General Code

The Pensions Regulator has confirmed that its long-awaited general code of practice has been laid in Parliament and is expected to come into force on 27 March 2024.

It has also published the final response to its 2021 consultation on the new code, together with a copy of the code as laid in Parliament. You can read more in our Insight.

The consultation response confirms that a number of changes have been made to the code to take account of the position of public service pension schemes. For example, "pension board" has been removed from the definition of governing body to reflect the fact that many public service scheme obligations fall on the scheme manager. Where expectations do apply to pension boards they are specifically mentioned in a module. Changes have also been made to the material on internal dispute resolution procedures.

Funds should consider the final code and decide what action they need to take in order to improve governance and meet the Pensions Regulator's expectations for compliance with legal requirements.

Removal of the Lifetime Allowance | Further guidance

HMRC has published a lifetime allowance guidance newsletter. This contains useful summaries of and information in relation to the key provisions included in Finance Bill 2023-24 to remove the Lifetime Allowance from 6 April 2024.

Recovery of overpayments | Important changes to recoupment

The Court of Appeal has confirmed that, where pension scheme benefits have been overpaid and a member objects to the trustees recovering the overpayment by recoupment (that is, by deduction from future pension payments) then pension trustees must obtain an order from the County Court before they can recoup. (The Pensions Ombudsman v CMG Pension Trustees: read our Insight). 

The Court of Appeal has confirmed that the County Court process will be "purely administrative". However, it still represents an extra step that must be taken if a dispute reaches that stage.

The Pensions Ombudsman has published a statement on the Court of Appeal's decision. This links to its first overpayments determination since the judgment was handed down and to a new factsheet explaining the effect of the judgment on cases where a scheme intends to recover a past overpayment through recoupment. In particular, the Pensions Ombudsman's statement indicates that the Department for Work and Pensions is "supporting legislative changes to formally empower TPO to bring an outstanding overpayment dispute to an end without the need for a County Court order".

These materials are essential reading for funds, who will now need to make sure they follow a particular approach to recoupment, at least until any legislative changes are formally introduced. Funds who discover or who have discovered past overpayments may wish to take legal advice.

Retained EU law | Important changes

The Retained EU Law (Revocation and Reform) (REUL) Act 2023 has made a number of changes with effect from the end of 2023. These include the renaming of "retained EU law" as "assimilated" law, the sunsetting of certain pieces of EU-derived legislation (none of which relate to pensions), the sunsetting of directly effective rights and obligations, the abolition of the supremacy of EU law, and the abolition of the general principles of EU law (for example, the principles of proportionality and non-retroactivity). There are some exceptions for things which occurred before the end of 2023.

When section 6 of the REUL Act comes into force, it will also give the UK courts much wider powers to revisit past judgments of the court of justice of the EU and past decisions of the UK courts on European law.

The precise impact of these changes has still to be seen. Funds need to be aware of them and take note of the fact that they could be relevant, for example, to challenges brought by members (and related arguments as to when something "occurred"). They could also create opportunities to challenge existing case law.

House of Commons Library briefing papers | New and updated

The House of Commons library has published or updated the following briefing papers, which might be of interest to public service pension schemes and employers.

This newsletter covers developments relating to public service pensions in England and Wales, with a focus on the Local Government Pension Scheme.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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