On 12 July 2103, the Department for Communities and Local Government (DCLG) issued a two-page FAQs bulletin, Firefighters’ pension scheme reforms: factsheet, outlining their views on the Firefighters’ Pension Scheme reforms. They have written to all fire and rescue authorities in England asking that they bring this to the attention of all staff.
The government’s note is obviously designed to present the proposals in an extremely positive light. But they are not giving the overall picture. This version has additional FBU comments (in italics) that can be used to provide a counter argument.
Firefighters’ Pension Scheme reforms
“Public sector pensions are changing in 2015. Because people now live longer the cost of public service pensions have increased by around a third. As a result, some younger people are being asked to work longer and everyone is being asked to contribute more towards their own pension.”
FBU: The government’s argument – people are living longer is the trigger for people working longer – ignores the fact that firefighting is a physical occupation, which requires a high level of fitness to safely undertake the tasks. The governments’ own evidence suggests that increasing the Normal Pension Age (NPA) to 60 means that a significant number of firefighters will be unable to maintain operational fitness and will face the sack on capability grounds. Government has not addressed this issue.
“Public sector pensions will remain among the very best available, with guaranteed benefits that are inflation proofed.”
FBU: The government has already imposed a change on the inflation proofing mechanism. They changed the uprating mechanism from one using RPI to one using CPI. Lord Hutton, who did the government’s pension report, said using CPI instead of RPI could reduced the value of an average public sector pension by approximately 15%. The government watchdog, the Office for Budget Responsibility said it could be twice that. Firefighter pensions will tend to be slightly higher than this so the amount lost would be greater.
“A greater proportion of firefighters are being protected from the change in Normal Pension Age than in any other large public sector workforce.”
FBU: The government-commissioned Williams review highlights that two-thirds of current firefighters age between 55 and 60 are below the recommended fitness level. Williams suggests that additional protection should be considered. Otherwise the only option for those who are unable to maintain operational fitness and do not qualify for an ill health retirement is to leave or face the sack which both mean – no job –no pension. Government have not addressed this issue.
“If you were a member of the Firefighters’ Pension Scheme 1992 and you were aged 45 or over on 1 April 2012, you will see no change in your benefits or retirement age.”
FBU: Not true – you will remain a member of the FPS but by April 2014 you will have seen an increase in your contributions from 11% to at least 14.2%. Older firefighters still face the prospect of the sack on fitness grounds before reaching 55.
“Even if you are under 45, your pension will still be one of the very best available and you would have to pay twice as much for equivalent benefits from a private pension.”
FBU: Firefighters are probably paying twice as much as other private pension schemes anyway. 13.2% is much higher than most private or public service pension schemes and the ratio of employee to employer costs is worse than most.
What does it mean for you?
“If on 1 April 2012 you had ten years or less to go before your Normal Pension Age, you will see no change in your benefits and the age you can retire will stay the same. This applies to members of the Firefighters’ Pension Scheme 1992 who were aged 45 or over and members of the New Firefighters’ Pension Scheme 2006 aged 50 or over, on 1 April 2012. If you are up to four years less than these ages, the changes will be tapered.”
FBU: There may be no change to benefits, but you are paying at least 3.2% more for the “privilege. (Actually benefits are reduced due to the switch to CPI as highlighted earlier).
“The majority of firefighters will be protected from the effect of the changes: 44.7 per cent of 1992 scheme members are fully protected (their benefits will remain the same, as will their retirement age), while a further 20.2 per cent will benefit from the tapered arrangements.”
FBU: Look at it another way: over 50% of firefighters will see changes to their benefits and will have to work longer to get an unreduced pension. Those fortunate enough to be in protection will pay a much higher contribution for the same benefit.
Are the benefits I have already earned protected?
“The pension you have earned up to 2015 is fully protected, and you will be able to take those benefits at the age you expected. 1992 scheme members who transfer to the 2015 scheme will still be able to take their 1992 scheme benefits, unreduced, from age 50 with 25 or more years combined service in the 1992 and 2015 schemes. The benefits you earn from the 2015 scheme, after you move to the new scheme, will be treated separately.”
FBU: To access the 1992 pension scheme, the individual will have to physically retire, thereby becoming a deferred member of the 2015 scheme. The earliest anyone can access their 2015 benefit unreduced is state pension age. The government does not take into account the fact that all members still face the threat of capability dismissal which ultimately mean access to all benefits will be at the scheme deferred age.
At what age can I retire from the 2015 scheme?
“If you are a firefighter not currently protected from the changes, you will retire at 60. This is the same retirement age agreed back in 2006 for members of the New Firefighters’ Pension Scheme 2006, and is the same as for the police and the armed forces.”
FBU: The NPA in 2006 was not agreed with the FBU it was introduced but has no supportive evidence to suggest it is workable. The FBU has provided a substantial amount of evidence which shows that 60 is unworkable and will ultimately mean firefighters facing the sack simply for getting older.
“However, you could still choose to retire from age 55. The Government’s recent offer means that there will be a smaller reduction to your pension if you retire at 55. This offer is currently being considered by the FBU’s Executive Council, and is subject to members agreeing it.”
FBU: This ‘smaller reduction’ to your pension will still mean that after paying in more contributions your pension will be reduced by over a fifth (21.8% at age 55). This recent position is subject to you accepting the whole set of proposals without further modification and without details on key issues such as how much you will actually pay.
What if I am no longer fit to undertake work at over 55?
“The majority of firefighters should be able to work until 60 by doing the average amount of exercise recommended for all adults.”
FBU: Actually, the review assumes that firefighters are recruited at much higher fitness levels than is currently the case. Their review says that from the limited data available to them, at age 55-60 years, 66% of firefighters were below the minimum standard recommended. The fitness proposals have not been discussed, trialled or tested in the fire and rescue service.
Will there be a Government national fitness standard?
“The Government will not introduce a national fitness standard. This is a matter for each individual fire and rescue authority.”
FBU: The recommendations in the Williams review state that all fire and rescue services should conduct regular fitness assessments for all firefighters to ensure fitness for role is maintained. Most already have a fitness standard in place. The government should have oversight of these standards – it cannot wash its hands of its responsibilities.
“The Government has offered to establish a joint working party on fitness and other employment issues, with firefighters’ employers and the FBU and other representative bodies, as part of its final offer on pensions.”
FBU: At the eleventh hour, after we have been raising the issue of firefighters being unable to work until an NPA of 60 for over two years, the government has suggested this group. We have been given no details on this working party other than a draft terms of reference which is vague. Remember the NPA review was supposed to find an appropriate NPA that firefighters could reasonably expect to work to and retire at.
Is this still a good pension?
“Firefighters will continue to benefit from a good pension. Under the new scheme, a firefighter is likely to receive a pension of around 67 per cent of their salary at age 60 after a 40 year career (for example, if you were earning £28,500 and retired age 60 after 40 years service, your pension would be £19,000).”
FBU: This is dependent on a firefighter paying significantly higher contributions and being able to work until age 60. If a firefighter cannot maintain the operational fitness requirements they will be forced to either take a reduced pension if they are over 55 or face the sack on capability grounds and face the prospect of having no job or no pension.
“The scheme will continue to provide a defined level of pension at retirement, based on a career average arrangement.”
FBU: The value of this pension has already been cut by changing the uprating mechanism from RPI to CPI. Members will have paid considerably more in contributions to achieve this.
“To put this in context, in 2011, only 9 per cent of private sector employees were members of a defined benefit pension scheme.”
FBU: It is disgraceful that private sector workers have had their pensions attacked as well. But Hutton stated that the public sector pension changes should not signal a race to the bottom. The relevant statistic is that the 1992 firefighters’ pension scheme in 2011 had a member contribution rate of 11% – more than double the private sector weighted average member contribution in defined benefit schemes of 5.2%.
