British unions lose legal challenge over $23 bln pension reform bill

Two British trade unions on Friday lost a legal challenge to changes to public sector pensions they argue allows the government to unlawfully pass the 19-billion-pound ($23 billion) cost of discriminatory pension reforms onto workers.

The Fire Brigades Union and the British Medical Association argued Britain’s finance ministry was effectively making members of newer pension schemes foot the bill for its own mistake.

But a judge at London’s High Court dismissed the two unions’ case in a written ruling on Friday.

The legal action followed a 2018 court ruling that the exclusion of younger staff from more beneficial “legacy” pension schemes, as part of wider government reforms, amounted to unlawful age discrimination.

That decision landed the government with a bill estimated at between 17 and 19 billion pounds in additional future pension payments to around three million public sector workers.

In 2021, the government included that bill in the valuation of public sector pension schemes – without which, the unions said, scheme members’ benefits would have increased or their contributions would have been reduced.

The unions’ lawyers argued at a hearing in January that the decision was unlawful as it was taken without assessing other options.

The government had said it was faced with a “basic choice” between asking public sector employees – and ultimately the taxpayer – or pension scheme members to bear the cost.

Dr Vishal Sharma, chair of the British Medical Association’s pensions committee, said in a statement: “We firmly believe that affected doctors and other public sector workers must not pick up the bill for the government’s unlawful discrimination and we will be considering an appeal.”

The Fire Brigades Union and Britain’s finance ministry did not immediately respond to a request for comment.