The Fire Brigades Union

1

• Pensions Crisis
• The Facts
• The Fiction
• The Fight

2

• 1. Background Information on Pensions
• 2. Arguments for Change
• 3. Proposed Changes to FPS
• 4. Proposed Changes to LGPS
• 5. Timeframes for FPS
• 6. Timescales for LGPS
• 7. Conclusions
• Is It Legal?
• 9. What Has Been Done So Far?
• 10. What Can We Do Now?

3

• Background Information on Pensions
• Types of Pensions
• State Pension Available to All
• Private Pensions Private Sector or Individual
  Investments
• Public Sector Schemes Civil Service, Teachers,
  Police, Fire Service, Health Workers etc.

4

• Main Changes For Each Scheme
• State Pension
• Retirement Age
• Private Schemes
• Closure Final Salary Element
• Public Sector Schemes
• Retirement Age, Contribution Rates, Accrual
  Rates, Ill Health/Injury Benefits Closure With
  New Lesser Schemes

5

• Firefighters Pension Scheme Local
• Government Pension Scheme
• Firefighters Pension Scheme
• Open to Wholetime Firefighters Only
• Unfunded
• Is it Expensive?
• Local Government Pension Scheme
• Funded

6

• Issues Common to all Pension Schemes
• Mortality Assumptions
• 30 Improvement in the 8 Years to 2002
• Longevity Life Expectancy
• Government Report states that
• People are not paying enough Contributions
• People are Living Longer
• People are Retiring too early

7

• Nearest Comparable Scheme to FPS
• Police Pension Scheme
• New Police Scheme for new entrants, with existing
  scheme ring-fenced
• Fire Service only Emergency Service not being
  afforded the Protection of Ring-Fencing
• Union Policy

8

• 2. Government Arguments For Change
• Affordability!
• Flexibility!
• Modernisation!

9

• Phil Woolas Quote
• "All public sector pension schemes are facing
  change and it is right that we modernise
  firefighters' pensions - the most expensive
  scheme in the public sector.
• "We have carefully considered the responses to
  our pensions consultation and these proposals
  reflect the comments we have received,
  particularly the concerns of serving
  firefighters. We want a new scheme which is
  generous but affordable for both firefighters and
  the taxpayers that fund them and changes to the
  existing scheme which will help limit future
  costs.
• "These proposals are in line with our aim of
  developing a modern Fire and Rescue Service and
  honour our commitment to introduce new pension
  arrangements. They also reflect changes in the
  new legal requirements, for example on pensions
  taxation."
• Local Government Minister Phil Woolas
  September 2005

10

• Responsibilities
• Home Office Police
• Department of Work Pensions Health, Teachers,
  Civil Service, Etc
• Office of the Deputy Prime Minister Local
  Government (LGPS) Firefighters (FPS) Schemes

11

• 3. Proposed Changes to FPS
• ODPM Consultation Exercises
• Existing Scheme (FPS)
• New Scheme (FPS)
• Still Awaiting Detailed Consultation
  Documentation from ODPM on Injury/Ill Health
  Retirements, (due since 14th January 2005)

12

• ODPM Proposes To
• Amend The Existing FPS Scheme For All Existing
  Members.
• Introduce a New FPS Scheme For New Entrants

13

• Eligibility For The New FPS Scheme
• New Wholetime Firefighters.
• New Existing Retained Firefighters
• Existing Wholetime Firefighters Who Choose To Opt
  In.
• Control Staff Are Deemed Ineligible!

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• Main Changes
• Retirement Age Accrual Rates
• Transitional Arrangements
• Deferred Pension
• Ill-Health Retirement
• Higher Tier with enhancement
• Lower Tier without enhancement
• Survivor Pensions
• Death Benefit

15

• Example 1
• If a member reaches the age of 50 to 55 and has
• attained a minimum of 25 years pensionable
• Service, but not 30 years, they will be able to
• retire on pension.
• The Pension calculation, however, would be split
• between pre and post 1st April 2006 service.
• The pension for pre 1st April
• 2006 will be unreduced.
• Contd

16

• Example 1 (contd)
• However, the Pension post 1st April 2006,
• will be reduced, by 5 for each year,
• between age of retirement and age 65 (deferred
• pension age)
• Scenario
• A member retires at 50 with 25 years
• pensionable service. The post April 2006
• Pension will be reduced by 75, (15
• Years x 5 )
• 5 is the Government Actuary figure

17

• Example 2
• A Member with 30 Years pensionable service
• completed by age 50, continues to work until age
• 55.
• Accrual Rate 1/60th per year for years 1 20.
• Fast Accrual rate 2/60th per year for years 21
  
• 30.
• Members can though, now accrue up to a maximum
• of 35 years pensionable service.

18

• Example 2 (cont)
• Accrual rate for last 5 Years (or part thereof)
  is
• 1/45th (equivalent to 1.33/60th)
• Therefore with 35 years pensionable service
• achieved, the pension will be 35/45th of final
• pensionable salary, (equivalent to 46.7/60th)

19

• Example 3
• Member continues to work to age 50, and after
• 30 years pensionable service in existing scheme,
• joins the new scheme.
• At eventual retirement age the pension would be
• 40/60th plus 1/60th for each completed year of
• pensionable service in the new scheme.
• Accrual Rates 40/60th 5/60th 45/60th
• Reason for Choice? Possible lower contributions
  
• would boost members take home salary.

20

• 4. Proposed Changes to LGPS
• Removal of the 85 Rule
• this would increase normal retirement age from 60
  to 65 and
• raise the earliest retirement age from 50 55,
  excluding Ill Health
• Increased contribution rates (currently 6) to a
  range between 5.5 9 (dependant on earnings)
• Restrict Pensionable Pay (basic salary, excluding
  allowances)
• Ill Health Retirements
• Two Tier System

21

• Two Tier Ill Health Scheme proposals intended to
  differentiate between
• 1. Those that are permanently incapable of
  performing any gainful employment and
• 2. Those incapable of continuing in their current
  role, but capable of other gainful employment.
  (Pension based on length of service only)
• NB Only those in the first category would be
  eligible for an enhanced pension.

22

• 5. Timeframes for FPS
• ODPM Plan To Close Membership Of The Existing
  FPS Scheme Open The New Scheme on

1st April 2006

• It is Still Possible that Timeframe May Slip
• It Is Possible That Different Timeframes will
  Apply Across The UK.
• ODPM Still Have Yet To Publish Ill Health/
  Injury Proposals

23

• At This Time We Must Assume, that ODPM Will Try
  To Meet Their 1st April 2006 Timeframe For The
  Implementation of a New Scheme and Changes to the
  Existing Scheme.

24

• 6. Timeframes for LGPS
• Government decided not to proceed with changes to
  LGPS in April 2005
• just prior to the Election, and in the face of
  Public Service Strike Threat
• Government said they intended to seek further
  consultation with key stakeholders
• the Pensions Green Paper proposals are intended
  to be implemented at the beginning of April 2006

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• 7. Conclusions
• The proposals will effect different Members in a
  variety of different ways. This will be dependent
  on the members
• Age
• Length of Service
• Duty System Worked
• Role
• Health
• Family Circumstances

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• 8. Is it Legal?
• Government Consultation
• Fire Rescue Services Act 2004
• No Protection for Accrued Rights
• Superannuation Act 1972
• No Protection for Accrued Rights
• Human Rights Act 1998
• Peaceful Enjoyment of Property
• Protection for Accrued Rights Prior to Changes
• Protection for Future Service Benefits?
• Seeking QCs Opinion

27

• 9. What has been done so far?
• Firefighters Pensions Committee (FPC)
  established chaired by the Office of the Deputy
  Prime Minister (ODPM)
• FBU Responses in Consultation Process
• Lobbying Politicians
• Press Media
• Campaign to inform Members of issues
• Firefighter Magazine Specials, Circulars,
  Regional Mass Meetings, Regular Reports through
  the Committee Structures, Press Media

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• 10.What Can We Do Now?
• FBU Conference Policy
• Members must decide
• Accept or Fight?
• Keep up to Date with the Issues
• Ensure regular attendance at Branch Meeting,
  Read All Literature produced by the Union watch
  the Press Media coverage.
• Lobby your MP, both individually collectively,
  as a Branch
• Discuss Debate with other members - Regularly

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• Over 1 Million Public Sector Worker Affected
  Voted YES in Strike Ballots last year.
• The TUC is still campaigning at Government level
• Other Unions involved in LGPS talks
• GMB, TGWU, UNISON, NAPO, AMICUS, UCATT, CYWU
• Coordinated action is still a possibility.
• WE ARE NOT ALONE

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• Its your Pension
• Its Your Future Financial Security
• Its the Financial Security of your Families
• Fight To Keep It