Submitted by SWFBU on
6 July 2012
TO: ALL MEMBERS
Dear Brother/Sister
PENSIONS: SUMMARY OF CURRENT POSITION IN RELATION TO THE ATTACKS ON THE FIREFIGHTER PENSION SCHEMES
This circular is to provide a briefing on the latest position in relation to the various attacks on the Firefighter pension schemes. Please note this does not address issues relating to the Local Government Pension Scheme (LGPS). Separate proposals have been issued relating to the LGPS and we will be contacting LGPS members specifically on those issues.
Special Conference 2012
The Executive Council statement to June’s Special Conference outlined the background to the ‘Hands off our Pensions’ campaign and the Union’s ongoing strategy for defending Firefighter pensions.
It made clear that this campaign is far from over. Currently there is nothing that resembles any sort of acceptable position we could ask members to consider. The Westminster Government has set out a plan where it proposes Firefighters pay at least 13.2% employee contributions and work until at least the age of 60.
Following extensive pressure from the FBU, backed up by a whole range of supporting evidence, they have however agreed to two reviews that potentially provide us with a mechanism to influence their proposals before any final decisions are made. These reviews will examine:
1. The appropriate Normal Pension Age (NPA) in a Firefighter scheme.
2. The risk of members leaving the scheme (opting out) as a result of increased employee contributions.
Conference agreed that the Union should participate in these reviews. Conference also made clear that national strike action remains very much a possibility if progress is not made on pensions.
So-called Final Agreement
On 24 May the Government set out its proposed Final Agreement. The Union immediately responded with a Letter to Bob Neill (English Fire Minister) highlighting that this misnamed document was unhelpful, unwelcome and would be viewed by many as potentially inflammatory. Bob Neill wrote back on 31 May outlining that the document should not be seen in any way as provocative and the Government remained committed to the reviews. He gave a written assurance that no final decisions would be taken until the results of the reviews had been fully considered. This letter was attached to an All Members circular sent out on 18 June 2012 and is available on the Union’s website (circular 2012HOC0341MW).
This is clearly not any sort of ‘Final Agreement’ since nothing has been agreed. There are still many key issues outstanding. We are aware that Government officials are keen to discuss various issues which have been discussed in other schemes including:
• Accrual rates.
• Commutation factors.
• Protection arrangements.
However, we have made clear that before there is any detailed discussion on such issues we must ensure that we have a realistic Normal Pension Age or the whole scheme would become unworkable as it would not reflect the physical nature of the occupation.
The FBU is in a different situation to most other Unions in respect of the NPA. In most cases they are campaigning to stop an increase from 65 to State Pension Age while we are trying to show that age 60 is not relevant for Firefighter pensions. In reality this means that we are saying there must also be a reduction in the NPA for those people in the New Firefighters Pension Scheme.
The NPA Review
The FBU have submitted large amounts of evidence showing that Firefighters cannot work beyond 55 in enough numbers to maintain an effective and efficient Fire Service. This evidence has been based on medical, financial and operational grounds. In each occasion our evidence has been back up by respected experts and professionals in the respective fields. It is important to recognise that while there has been no counter argument or evidence, Government have not accepted this position and still aim to follow their initial position around age 60.
Members who have joined since 2006: New Firefighters’ Pension Scheme
The New Firefighters Pension Scheme (NFPS) was introduced in 2006 and included an increase in Normal Pension Age to 60. The FBU has consistently opposed this increase in the NPA. The then Government justified the change on the grounds that where Firefighters could not reach this age they could be redeployed into suitable roles to enable them to remain employed. We have recently reiterated that these redeployment opportunities simply do not exist. The real position is that an NPA of 60 will mean working operationally until 60.
Review of pension age: NPA
The Union will now seek to address this issue through the review of Normal Pension Age which has been established by the Government. The CLG Fire Minister recently appointed the Chair of this review group, Dr. Tony Williams. Dr. Williams made a presentation on 4 July to the Firefighters Pension Committee.
The Terms of Reference and the funding for this review have been agreed. The review will report back by December 2012 and will consider its findings before any final decisions are taken.
This review process does not provide the Union with any sort of guarantees on the issue of pension age. It does, however, provide a mechanism to formally present our evidence and to challenge the Government’s case on professional and technical grounds.
We have already submitted very strong evidence supporting our position but over the next few weeks we will be working to make sure this is an even stronger. At present we are gathering more evidence to strengthen our objection to age 60 and are confident in our arguments. This evidence will form a more detailed submission that will also be available to members.
Opt-out review
The other key concern is around the issue of the proposed contribution rates which at 13.2% would be unaffordable and would mean that many Firefighters would be priced out of a pension scheme. The FBU have warned that as people chose to opt out or do not join the scheme the cashflow and liability of the scheme would be dramatically affected. The Government initially used an assumption that only 1% of people would opt out of the scheme but have recognised that the weight of argument put forward by the FBU could mean that this might be much higher.
As a result the initial position has changed and there will now be a review of the impact of Year 1 increases on opt-outs or non-joiners before they make any decision on future increases. This review is already underway.
This review is in two parts:
1. Review of data.
2. Survey of attitudes towards the Firefighter pension schemes.
The review of historical data has started and a questionnaire has been issued to Fire Authorities examining issues around opt outs and non-joiners. This information, which is being collected and updated to identify trends, will be shared with the FBU and other stakeholders. The second part involves teams meeting Firefighters face-to-face to discuss the impact of the increases and to ascertain attitudes towards the pension schemes and confidence in them.
The evidence from both parts of this review will be discussed and considered before any further decision is taken on future increases.
Again, it is important to stress that this is only a mechanism to possibly influence future Government decisions. There are no guarantees. However, it is the evidence submitted by the FBU which has led to the review being established.
Contribution increases: April 2012
The FBU made a strong case for no increase at all in the first year and continues to oppose any increase in contributions. As a result of pressure the increases were reduced from those originally planned and in comparison with the increases imposed on other schemes. Nevertheless, we still saw an increase of around £14.00 a month for Firefighters in the FPS and £7.00 a month for firefighters in the NFPS. Our task is to oppose and challenge the case for further increases. The Review of Opt-out provides one mechanism (among others) for this.
Where next
This campaign is far from over and we have not got anything like an acceptable position to put to members. The two reviews are mechanisms by which we will try to influence future decisions. We have committed to taking part in them but FBU members will remain justifiably cautious and suspicious of them.
Currently:
• We are identifying and uncovering more information and evidence to support our opposition to the current proposals.
• We have not been asked to agree to any proposals or asked to sign up to any agreement and have made our position clear on this.
• We continue to monitor the situation and to ensure members are well informed about the detail of the reviews and of any related discussions.
• We continue to campaign politically, outlining our position and the evidence which supports it.
Further detail on the current situation will be published in Firefighter magazine and further reports will be issued as the two reviews develop. Our campaign to oppose these attacks and to defend good quality pension schemes in the Fire and Rescue Service continues.
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
