McCloud remedy | Annual benefit statement exemption

New regulations have been made to relax the requirement for Local Government Pension Scheme (LGPS) administering authorities to include estimated calculations relating to the McCloud remedy in members’ annual benefit statements (ABSs) for the 2023/24 scheme year, and to give administering authorities the ability to determine that the McCloud remedy will not be reflected in ABSs for the 2024/25 scheme year.

The regulations have been introduced to give LGPS scheme administrators more time in which to complete remedy calculations and update members' records. The explanatory memorandum accompanying the regulations says that the relaxation for the 2023-2024 scheme year "will have effect retrospectively to 1st October 2023 … in order to ensure that authorities will not at any point have been required to include the McCloud remedy calculations in those statements, because … legislation requires that they must be issued by 31st August 2024 and therefore some authorities may already have issued them before these Regulations have been made. Where an administering authority has already issued ABSs for 2023-24 and has been able to include McCloud remedy calculations in them, these Regulations allow the authority to determine that the disapplication does not apply (in order to ensure that those authorities will still be compliant with the legislation). Where an administering authority does not think that it will be in a position to include McCloud remedy calculations in the ABSs for 2024-25 (which must be issued by 31st August 2025), then these Regulations also allow them to extend the disapplication for a further year if the authority considers that it is reasonable to do so in all the circumstances of that case."

LGPS administering authorities should consider the regulations with their scheme administrator and make, and record, any decision (determination) needed – deadlines apply. The regulations also say that any decision not to include McCloud remedy calculations in the ABSs for 2024-25 must be notified to the members to which it applies in the ABS in respect of the scheme year ending on 31 March 2025.