FBU: Further response to Hutton review of public sector pensions
CIRCULAR 2011HOC0001MW
TO: ALL MEMBERS
Dear Brother/Sister
FBU: FURTHER RESPONSE TO HUTTON REVIEW OF PUBLIC SECTOR PENSIONS
The FBU submitted further evidence to the Hutton review of public sector pensions on 17th December 2010.
Our submission outlined that the 3% increase in employee contributions and the change in indexation from Retail Price Index (RPI) to Consumer Price Index (CPI) which have been imposed since the Commission’s review started are unfair and unjust attacks on the pension rights of firefighters and all public sector workers.
The Government intends to impose the 3% increase in employee contributions from April 2012. This will mean that the employee’s contribution to the Firefighters Pension Scheme (FPS) will reach 14% by April 2014 and will be the highest in the public sector. In addition to this, tiered contribution rates for more senior roles are intended to be imposed over the same period meaning that some FPS members will pay 17% of their salary in pension payments.
According to the Independent Public Service Pension Commission’s (IPSPC) interim report the imposition of CPI as the future indexation measure will seriously devalue public sector pensions.
The interim report states;
‘This change in the indexation measure may have reduced the value of benefits to scheme members by around 15 per cent on average. When this change is combined with other reforms to date across the major schemes the value to current members of reformed schemes with CPI indexation is, on average, around 25 per cent less than the pre-reform schemes with RPI indexation’.
The IPSPC’s final report is due out in spring 2011 and is expected to recommend replacing final salary schemes with career average schemes and raising normal retirement ages.
Our submission has reiterated our opposition to any proposal to raise the retirement age of the Fire Service Pension Schemes and stated that the current retirement age of the New Firefighters Pension Scheme is already too high. The response also points out that imposing career average schemes will seriously undermine future recruitment and retention strategies which ensure that experienced and well-motivated people remain in the Fire Service.
We also highlighted a recent report from the National Audit Office which shows that the 2007/08 public sector pensions’ changes will have the effect of reducing costs to taxpayers by 14%. The impact of these adverse changes has not been monitored by the Treasury prior to this latest round of attacks on pension rights.
The recent changes to the Fire Service Pension Schemes, which included the closing of the FPS, the introduction of the NFPS and the New Local Government Pension Scheme (LGPS), have not yet had the time to take effect. Indeed, the IPSPC’s interim report acknowledged that within 30 years the cost of the Firefighters’ Pension Schemes will be reduced by around a third – without the further changes now proposed.
The FBU response outlines that any claim that an aging Fire Service can be mitigated by redeploying firefighters who can no longer maintain operational fitness is not workable in practice as these non-operational roles simply do not exist on the scale which would be required.
FBU members value their Pension Schemes and should not be ashamed to defend them. The Union will be campaigning to ensure that quality Public Sector Pension Schemes are not undermined by imposition or through ill-thought out, poorly evidenced changes.
The assault on Fire Service Pension Schemes is growing and the FBU is the only Union in the Fire Service willing and able to stand up against these attacks. In order that we can defend our pensions we must be well organised and well prepared.
Over the coming weeks and months it is important that Branch meetings take place and that pensions is on the agenda.
Officials will receive further information as things develop and members will receive updates through the usual channels.
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
MW/sll
Attachments: Download the submission
