CIRCULAR 2012HOCOO31SS
13 January 2012
TO: BRIGADE SECRETARIES
Dear Brother / Sister
The issue of protection of accrued rights has been an element of the ongoing discussions around the government’s proposals for changes to the firefighter pension schemes, which we recognise is extremely important.
Whilst we have stood in firm opposition to proposals around issues such as increasing employee contributions and raising normal pension age, it was also important that we achieved the best possible protection for accrued rights.
Danny Alexander’s statement introducing the document ‘Good pensions that last’ outlined protection for active scheme members within 10 years of their normal pension age on 1 April 2012. This immediately raised a question of the extent of the protection in the 1992 Firefighters Pension Scheme, because of the normal pension age of 55, but we must also recognise various other rules which allow members to retire with an unreduced pension from age 50 in some cases. The FBU immediately took the view that it should attempt to protect as many of its members as possible and look at achieving the best interpretation of this statement.
You will no doubt be aware of the unhelpful CFOA email that was distributed just before the end of December that accepted the lesser interpretation of what the 10 year protection could mean. This was extremely unsupportive at a time when we were involved in ongoing talks around this issue.
Confirmation of government’s interpretation
On 12 January, we received confirmation that the government interpretation was that the normal retirement age is 55 and that the protection offered will reflect this position. Although we were not surprised by this view, we maintain a different understanding of the position around normal retirement age and have already taken advice on our interpretation.
There are two important notes to consider when members look at the protection arrangements detailed below:-
- To receive the protection, the individual must remain an active member. If they opt out of the scheme, the protection does not apply.
- The FBU has also not yet received any clarification on what government expects an individual covered by the protection to pay in employee contributions during this period.
Government has however, now confirmed that the accrued rights protection will be as follows:-
Link to final salary - All benefits accrued under final salary arrangements will be linked to the member’s final salary whilst they remain a member of a firefighters’ pension scheme.
Double accrual – Members will have full recognition of their expectation to double accrual for service accrued under the 1992 Firefighters’ Pension Scheme, so that a member’s full pensionable service upon retirement will be used to calculate an averaged accrual rate to be applied to service accrued under the 1992 scheme.
Pension age – Members will be able to access their 1992 scheme benefits at that scheme’s ordinary pension age (i.e. from age 50 with 25 or more years pensionable service). Pensionable service for the purpose of calculating the ordinary pension age will include any continuous pensionable service accrued under both the 1992 scheme and the 2015 scheme.
Lump sum – Members will continue to have access to an actuarially assessed commutation factor for benefits accrued under the 1992 scheme.
Transitional protections for certain categories of members – All active scheme members who, as of 1 April 2012, have 10 years or less to their current normal pension age, will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current normal pension age.
Tapering – There will be a further period of tapered protection for scheme members. This can be up to 4 years but in other public sector schemes it has been agreed at 3.5 years. This has not been discussed in detail, and no final position has been reached. (NB This is in addition to the 10 years full protection, and members covered by the tapering period will have limited protection).
At the end of the protected period, active members will be transferred into the new pension arrangements. Further details on how the tapered protection will apply is not yet available.
These transitional protections will be achieved by members remaining in their current respective pension schemes during the transitional or tapering protection period
Next steps
As previously mentioned, we have taken advice on our interpretation of the situation. It is also unclear what government expects individuals to pay in contributions during this protection period.
The main focus of the “Hands off our Pensions” campaign is to defend fire service pensions from the proposed government attacks, but we recognise the importance of ensuring that we get the best protection arrangements available.
The campaign is reaching a critical stage where things are moving very swiftly and it is important that everyone is up to speed so that they can make informed decisions. We will try to get accurate information out as soon as it becomes available, so please ensure that you read all the circulars, bulletins and updates on the FBU website www.fbu.org.uk
Yours fraternally
SEAN STARBUCK
National Officer
SS/jh
