Response to McCloud

A ruling by the Court of Appeal in 2018 (referred to as the McCloud judgement) identified inequality within some public service pension schemes due to age-related transitional protection that was given to some members following the pension scheme reforms in 2015.

As the MPs’ Pension Scheme contains similar age-related transitional protections, IPSA has decided to make the following changes – known as the PCPF’s Response to McCloud – to address any potential age-related unfairness between 8 May 2015 (the date the transitional protections came into effect) and 31 March 2023 (the date the Final Salary Section closed):

• The Final Salary Section closed to all members on 31 March 2023. All active members of the MPs’ Pension Scheme will continue their membership within the CARE Section only from 1 April 2023.
• Benefits built up in the Final Salary Section before 8 May 2015 are not affected by the changes.
• For the period between 8 May 2015 and 31 March 2023, affected members will be given an immediate choice of whether to:
  • Move their benefits for this period to the Final Salary Section;
  • Move their benefits for this period to the CARE Section; or
  • Make no change.
• Immediate choice means that all members will have to have made and communicated their decision to the administrators, Buck, by 31 January 2025. If no choice is communicated to Buck, the ‘no change’ option will be applied to members’ benefits.

These changes affect all members of the MPs’ Pension Scheme (active, deferred or retired) who were MPs on 7 May 2015 and have also served as an MP since 8 May 2015, regardless of whether they received full, tapered, or no transitional protection in May 2015.

Finding support

One-to-One Guidance Sessions

The PCPF Secretariat have been arranging one-to-one sessions between members and an Independent Financial Advisor from Origen, to go through the Options available to them. Origen is a firm of IFAs with knowledge of the PCPF scheme, who host annual seminars on behalf of the PCPF regarding the Annual Allowance and Lifetime Allowance tax charges, and Origen are also the firm who have hosted the McCloud seminars. The sessions will help you understand the potential impact of the McCloud choice on your pension and retirement plans. Please note that this is not Financial Advice but will provide guidance only. Contact the PCPF Secretariat if you wish to arrange a guidance session.

A Mccloud financial education programme has been created to support members who need a little more information before making their choice.

Digital modelling (provided by Guiide): parliament.guiide.co.uk
Guiide is a popular online guidance tool developed by a pensions actuary and other pension professionals. Guiide have built a custom journey to help PCPF members understand their specific McCloud options. This journey will consider how these choices may affect your benefits, contributions and tax implications. This may be enough for you to make a decision without advice. Use your personal log in detailed in your options pack, to access the modeller, which has been pre-populated with the personalised information shown on your Statement.

Seminars
Complimentary McCloud seminars will be run periodically following receipt of your options pack. If you wish to attend a seminar, please register your interest with the Secretariat team on 0207 219 6481 or pensionsmp@parliament.uk, confirming whether you would prefer to attend an in-person or virtual event.

Financial advice
We recommend that you take independent financial advice before making your choice. You may already have a financial adviser or accountant from whom you can take advice. Alternatively, Guiide have selected two regulated independent financial advisers from their adviser panel, who are both very experienced in scheme option exercises, to provide you advice at a fixed price. Please access the Guiide modeller above for details of these advisers.

Documents to download

HMRC tax guidance.

View letters to members about the impact and response to the McCloud judgement.

View the Independent Parliamentary Standards Authority (IPSA) consultation documents about MPs’ pensions and the McCloud judgement.

View extracts from communications relating to MPs’ pensions and the McCloud judgement.

View guidance from HMRC for MPs and Ministers on Tax and National Insurance contributions.

Find answers to your questions

View our FAQs.