In 2018, the Court of Appeal ruled that the way public sector pension reforms were introduced in 2015 was unlawful age discrimination. Older members were allowed to stay in their more generous final salary schemes, while younger members were moved into career average (CARE) schemes. This ruling — known as the McCloud judgment — affects millions of public sector workers, including teachers.
The remedy
To remove the discrimination, all affected members now receive a choice about how their pension benefits should be treated for the remedy period:
1 April 2015 – 31 March 2022 (TPS, NHS, Civil Service).
This is sometimes described as “rewriting history”, because you can choose which scheme rules apply to those seven years.
Why teachers are often affected
Many teachers had transitional protection or tapered protection, meaning:
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They remained in the Final Salary Scheme for several years after 2015.
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They were then moved into the Career Average Revalued Earnings (CARE) scheme before 2022.
This creates a mixed record — and therefore a meaningful choice.
The Transitional Protection Choice Letter
Members received their formal choice letter on 4 March 2026, with a deadline of 4 March 2027 to respond.
If no decision is made, trustees apply a default choice based on their own calculation methodology, typically:
Total accrued benefits × 20 + any lump sum benefits, adjusted for early/late retirement factors.
Please note each public sector scheme’s exact formula may vary.
Your Two Options
Option 1 — Final Salary Scheme for the entire remedy period
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Pension based entirely on your final salary at retirement.
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Typically produces:
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Lower annual pension
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Higher lump sum
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Lower spouse/survivor pension
Option 2 — Combination of Final Salary + CARE Scheme
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Benefits split: final salary for the years you remained protected, CARE for the years after transition.
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Typically produces:
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Higher annual pension
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Lower lump sum
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Higher spouse/survivor pension
This pattern is consistent with scheme comparisons across TPS and other public sector schemes.
Comparison
Adjustment & Repayment Calculation
If Option 2 gives you a higher pension, the scheme calculates:
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Backdated underpayment of pension (you may be owed money).
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Backdated overpayment of lump sum (you may need to repay money).
This is because your original benefits were calculated under the assumption that part of your service was in the final salary scheme — which may no longer be correct if you choose CARE for the remedy period.
The net result may be:
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A refund owed to you,
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A repayment owed by you,
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Or a near‑zero adjustment.
How to make the decision
You must weigh up:
1. Immediate cost (if any)
A lump sum repayment can feel painful — but it is one‑off.
2. Long‑term pension uplift
A higher annual pension is permanent, index‑linked, and often more valuable over a typical retirement.
3. Breakeven analysis
Your example is typical:
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Repayment: £3,000
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Higher pension: £130 per year, increasing by ~3% annually
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Breakeven: ~18 years
This is a simplified way to frame your decision.
Key Insight
Most members who face a repayment under Option 2 also receive higher lifetime pension income — meaning the “costly” option often becomes the financially superior one over time.
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