DRAFT JUDICIAL PENSIONS (FEE-PAID JUDGES) (AMENDMENT) REGULATIONS 2023

Debate between James Duddridge and Mike Freer

Tuesday 21st February 2023 General Committees

[The Parliamentary Under-Secretary of State for Justice (Mike Freer)]

I beg to move,

That the Committee has considered the draft Judicial Pensions (Fee-Paid Judges) (Amendment) Regulations 2023.

It is a pleasure to serve under you this morning, Ms Nokes.

The statutory instrument before us amends the Judicial Pensions (Fee-Paid Judges) Regulations 2017, which established the Fee-Paid Judicial Pension Scheme 2017. I shall refer to those as the fee-paid regulations and the fee-paid pension scheme respectively.

The fee-paid pension scheme currently only provides benefits for eligible fee-paid judicial service on and after 7 April 2000. The main purpose of the SI is to amend the fee-paid regulations to provide pension benefits for eligible fee-paid judicial service before 7 April 2000 and provide a remedy following the judgments in the cases of O’Brien against the Ministry of Justice, known as “O’Brien 2”, and Miller and others against the MOJ, known as “Miller”.

The fee-paid pension scheme commenced on 1 April 2017 when the fee-paid regulations came into force. It provided pension benefits for eligible fee-paid judicial service on and after 7 April 2000 that mirrored those for salaried judges under the Judicial Pensions and Retirement Act 1993, known as JUPRA. In 2018 the European Court of Justice found that eligible fee-paid judicial service prior to that date should also be taken into account for the purpose of calculating pension benefits. In addition, in 2019, the UK Supreme Court found that the time limit for fee-paid pension entitlement claims runs from the date on which the judge retired from judicial service, rather than the date on which they left the fee-paid office concerned. Even though the fee-paid pension scheme closed to further accruals on 31 March 2022, with pension accruals for all judges from 1 April 2022 being in the reformed Judicial Pension Scheme 2022, it is important that judges receive the pension benefits they are entitled to for their historical fee-paid judicial service. The instrument achieves that and provides a remedy for both of the judgments to which I have referred.

In order to achieve the required remedy, the SI makes a number of important changes to the fee-paid pension scheme. Most notably, salaried judges had access to different pension arrangements under the Judicial Pensions Act 1981 before the introduction of the JUPRA pension scheme in 1995. Those earlier arrangements for salaried judges had different accrual rates and scheme features and it has been necessary to retrospectively mirror those provisions and the associated eligibility criteria in the fee-paid pension scheme by introducing new “pre-1995” provisions. I hope that that is all clear—I jest, but it is quite a complex issue.

It is also important to update the schedule of eligible offices for the fee-paid pension scheme, to ensure that all judges who are eligible for a pension are included in the fee-paid regulations. Where eligibility has been established, those offices have been added to the schedule.

The SI also contains a number of other supplementary amendments that are necessary to ensure that fee-paid judges who are eligible for a pension settlement under the fee-paid pension scheme are given the correct settlement. One of those supplementary amendments is the inclusion of a facility for “small pension commutation”. Fee-paid judges do not always build up significant amounts of reckonable service, so we have included provisions that mirror the trivial commutation and “small’ pot” facilities that may be available in other pension arrangements.

The instrument also provides a further window for eligible judges—those with fee- paid service between 1995 and 2006—to purchase additional benefits in schemes constituted by the fee-paid regulations, or to vary purchases they have previously made. Again those provisions mirror those that were historically provided to relevant salaried judges.

The SI also updates the regulations that set out requirements for the payment of contributions by scheme members in respect of service prior to 7 April 2000; provides for a reconciliation of payments in lieu of pension, which have been made to judges, to formal entitlements under the amended regulations; and corrects some minor drafting errors in the existing regulations. Finally, the instrument regularises some partial retirement payments that were originally inconsistent with a restriction in the fee-paid regulations, holding that this option could only be exercised on or after 1 April 2017. That date restriction is also removed by the amendments.

We have undertaken on changes to the fee- paid pension scheme. The Ministry of Justice published a consultation on its proposals for amending that scheme on 24 June 2020, and 106 responses were received by the time the consultation closed on 18 September 2020. The responses were broadly supportive of the proposals, and on 10 December 2020 the Government response was published, setting out how the proposals had been refined to take account of those responses.

Officials at the devolved Administrations in Scotland, Northern Ireland, and Wales have been kept apprised of the development of the amendment regulations, in particular in relation to the offices whose jurisdictions are in those countries, and their views have been reflected in the drafting.

In the case of three fee-paid judicial offices included in the eligibility schedule, targeted consultations, including with office holders, were carried out to provide assurance that the correct service limitation dates are being applied. The service limitation date marks the point from which a salaried comparator judge became eligible for a judicial pension.

In conclusion, I would like to assure Committee members that the amendments to the fee-paid pension scheme set out in this SI are necessary to ensure that judges with historical fee-paid service get the pension benefits to which they are entitled and, together with other measures on judicial pay and pensions, those amendments will help to ensure that we can continue to support our esteemed judiciary.

[Sir James Duddridge (Rochford and Southend East) (Con)]

This process with judges and the McCloud judgment has triggered further things beyond judges’ pensions. It may disorderly and beyond the Minister’s remit, but could he write to the Committee to say what other public sector pension arrangements will be affected following McCloud? What will be the costs? Does it mean that we will have to come back for SIs for every single pension arrangement within the public service or, after this initial one is done, we can just come back once?

[Mike Freer]

My hon. Friend is correct that the McCloud judgment is an ongoing issue facing all pension schemes. The impact of that judgment is currently being worked through and any relevant changes that may be required will have to be brought forward for consideration. I will ensure that my hon. Friend gets a detailed letter explaining the processes.