Submitted by SWFBU on
TO: ALL MEMBERS
Dear Brother/Sister
PENSIONS: LEGAL CHALLENGE
FBU SUBMITS PRE-ACTION LETTER ON AGE DISCRIMINATION ISSUE RELATED TO 2015 PENSION SCHEME PROPOSALS
You will be aware that the union has been considering various possible legal challenges in relation to the proposed 2015 firefighters’ pension scheme.
One such legal challenge focuses on the ‘Cliff edge’ issue whereby firefighters retiring after age 55 but before age 57 are treated very differently to those retiring after age 57 in respect of the actuarial reductions applied.
The ‘Cliff edge’ issue has been addressed in Scotland, where the June 19 offer for actuarial reduction has been proposed. It also may not be an issue in Northern Ireland because the NPA has not been fixed at age 60 by law. It is still however a key concern in England and Wales.
A pre-action letter has now been submitted to the Secretary of State for the Department for Communities and Local Government with a requirement for a substantive reply within 14 days.
This is a complex legal issue and the pre-action letter is somewhat complicated and is phrased in legal terms. It is important to note that the challenge does go significantly further than the ‘Cliff edge’ issue because even in the June 19 proposal active members of the scheme are treated as deferred members in relation to the formula used for actuarial reductions. The suggested remedy to this is to use ‘active’ early retirement factors which in turn result in reductions which would be less severe. These have been discussed previously at the Executive Council and also with DCLG officials.
The ‘active’ early retirement factor methodology gives fairer actuarial reductions closer to 12% at age 55. These would be much lower than both the final proposed agreement and the June 19 proposal. They would take account of all the factors involved and are, in the opinion of our advisors, the only real cost neutral option. The challenge is based on the logic that therefore they are the ones that should be used in this situation.
This part of the challenge would also impact on the proposals made by Scotland which are not based on the ‘active’ early retirement methodology for working out actuarial reduction. The Scottish Government has already confirmed that they would match any improvements achieved elsewhere around the UK and arrangements have been made to discuss this particular issue with them.
An explanation of the issues raised within this pre- action letter is attached above in a briefing note for your information
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
