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Welcome to the Berkshire FBU e-newsletter designed to help keep members informed of what’s going on around the Brigade, Region and Country.
The articles will give you a brief update of what’s going on and the links will take you to further and more detailed information from the FBU’s local and the national websites.
Volume 2
Volume 1
CIRCULAR: 2012HOC0180MW
26 March 2012
TO: ALL MEMBERSDear Brother/Sister
Members will be aware that the Executive Council recently adjourned in order to be able to discuss all aspects of pensions once further information was available.
The key issues for consideration are:
- Review of opt-outs and the implications of increasing employee contributions.
- Review of Normal Pension Age.
- Employee pension contribution for 2012-2013.
The Firefighters Pension Committee (FPC) meets this week (28 March) and, among other things, will consider the following two papers – which are both attached:
The FBU has argued that Central Government proposals to increase employee contributions will have the effect of increasing the number of members who choose to opt-out of (or not join) the schemes. We submitted significant evidence around this issue. As a result of the subsequent discussions with Employers and Government it has been agreed that the FPC should conduct a thorough review of the issues raised. The Terms of Reference for this are attached and work has already begun to identify data and other information which will be required.
Likewise, the FBU has consistently challenged the suggestion that Firefighters will be able, in significant numbers to work to a Normal Pension Age (NPA) of 60. Again we have submitted significant evidence on this issue. As a result of the subsequent discussions the Employers have made the proposal for a review of NPA for members of the Firefighters’ schemes. Terms of Reference for this review have been submitted for the FPC meeting this week and are attached for your information.
We expect an announcement to be made in relation to pension contributions soon and will provide that information as soon as it is available.
The Executive Council meets later this week and will assess developments in relation to employee contribution increases and the two reviews.
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
MW/sll
CIRCULAR: 2012HOC0175MW
19 March 2012
TO: ALL MEMBERS
Dear Brother/Sister
The Executive Council met on 8 and 9 March to hear reports from discussions with our members on the latest position in relation to pensions and to receive reports of the latest developments in talks with Government. The meeting was scheduled so as to ensure that Executive Council members would be able to consider all aspects of the issue, including a likely decision on contribution increases for the year from April 2012. We had been informed that this decision was likely to be made by Government on or before 8 March. While this decision directly affects only members of the Firefighter schemes in England we are also aware that the administrations in Scotland, Wales and Northern Ireland are following closely what decisions are made in relation to the schemes in England.
We were subsequently informed by CLG officials that no decision had yet been made on the issue of contributions and that the matter was still being considered. The Executive Council agreed that it would be necessary to assess and discuss all aspects of this issue and therefore agreed to adjourn until full information is available. We have held further discussions with CLG officials but at this stage we are still unable to confirm when this information will be available.
In the meantime we have continued to discuss further the details of the proposed review of Normal Pension Age and the review of opt outs and related issues. As soon as further detail on these is available they will be circulated for your information and consideration. The Executive Council has agreed to reconvene as soon as this full picture is available.
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
MW/sll
The FBU has produced a new Pensions Bulletin, which explains the union’s views on the government’s latest pension proposals. This bulletin has been sent to members’ home addresses and to fire stations. The FBU is holding a three-week consultation on the proposals – please see your local FBU representatives for details of meetings in your brigade and region.
CIRCULAR: 2011HOC0631MW
9 December 2011
TO: ALL MEMBERS
Dear Brother/Sister
Members will be aware that a key issue in our discussions on pensions has been the policy of Government to introduce cost ceilings in relation to discussions on scheme design for 2015 and after. In the larger public sector schemes these were issued in October and then revised in November. Scheme specific talks in those other pension schemes are already underway as a result of the issuing of the cost ceilings and related proposals from Government. These discussions are addressing the issues around future pension scheme design.
The FBU called for a delay in the setting of the cost ceiling since consideration should be given to various occupationally specific issues, particularly around retirement age. This is a result of our fundamental disagreement with the recommendation in the Hutton report that normal pension age for Firefighters should be 60. We have argued against this and presented various pieces of evidence to support our case. Based on this position we have additionally called for a reduction in normal pension age for members of the New Firefighters Pension Scheme who have joined the Service since April 2006.
The Government has now issued a cost ceiling for the proposed Firefighter scheme. This has been set at 27% (employer 13.8%; employee 13.2%) with a proposed accrual rate of 57ths. The accompanying documentation includes a Government ‘preferred scheme design’. We are currently examining this and will circulate it once we have examined the implications. The currently proposed scheme design does not in any way address the concerns of the FBU on contributions rates, retirement age or other key matters. We are preparing a response to the CLG Fire Minister which will also be issued to members at the earliest opportunity.
On behalf of the Westminster Government, CLG have explained that the cost ceiling is ‘indicative’. They have stated that the issuing of the cost ceiling and related documentation is the start of the latest stage of discussion and should not be seen a final position. We have explained that the FBU will be issuing our response, including our own preferred ‘scheme design’. This will be based on the Union’s various policies on pensions. This will also be issued to members at the earliest opportunity.
We are also currently examining the implications of the proposed accrual rate which is suggested as 57ths. Clearly, such matters require some technical expertise and we will seek further advice and support on this from our actuarial advisors.
No offer on pensions
To summarise the current position, there is currently no ‘offer’ on pensions and discussions will continue on the Government’s proposals and our challenges to them. The Executive Council has agreed to meet early in the New Year to hear reports from these discussions. Should any significant or urgent developments occur, the Executive Council will be reconvened earlier.
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
MW/sll
CIRCULAR: 2011HOC0629MW
9 December 2011
TO: ALL MEMBERSDear Brother/Sister
You will be aware that the FBU has challenged the Government’s imposed change to the way pensions are increased to take account of inflation; from a practice using the Retail Price Index (RPI) to one using the Consumer Price Index (CPI).
This challenge was by way of Judicial Review and the hearing took place between 25 and 27 October at the High Court in London.
There were two sets of claimants with different legal representation, and pursuing different but complementary legal arguments. The FBU claim also included five other unions; PCS, POA, NASUWT, Unite and Unison.
The other claim was brought by the Staff Side of the Police Negotiating Board, the Police Federation, the National Association of Retired Police Officers, FDA, Prospect, the Civil Service Pensioners Alliance, GMB and certain individual Claimants.
The decisions under challengeThe Secretary of State for Work and Pensions is required each year, under social security legislation, to review various social security benefits to determine whether they have kept up with general increases in prices in such manner as s/he “sees fit”. S/he must then up-rate those benefits by at least the same percentage as the increases in general prices.
The relevant pensions legislation requires the Treasury, in turn, to increase public service pensions by the same percentage as the annual increases to benefits made by the Secretary of State for Work and Pensions.
In June 2010, the Chancellor, in his Budget report, announced that the longstanding practice of measuring the increases in general prices using RPI was to be changed and that, from April 2011, CPI would be used. The rationale for the switch was that CPI was a statistically more appropriate index, which would also save money. The FBU has maintained that it is actually a deficit-reduction measure.
The cost savings by the Government and private sector employersThe Chancellor estimated that the resulting savings from public service pensions would be £6 billion in the lifetime of this parliament.
CPI is generally about 1.2% lower than RPI annually. It is estimated that the loss to public service pension scheme members over time will be in the region of 15%.
Now that the switch to CPI has also been applied to private sector pensions the Department for Work and Pensions estimates that £73 billion has also been wiped off the value of private sector pensions which represents a substantial windfall for their sponsoring employers and an equivalent loss for private sector workers.
The FBU claim covered four areas:
(i) The construction argument: Government has acknowledged that a substantial part of its purpose in changing from RPI to CPI was to reduce expenditure on pensions and other benefits. This was not a permissible consideration under the relevant statutory provisions.
(ii) The legitimate expectation argument: many statements had been made in the past by the Government, to employees and their unions, that pensions would be adjusted by RPI. These statements gave rise to legitimate expectations that RPI would continue to apply. The claim also included similar arguments the change from RPI to CPI in relation to accrued rights would amount to a breach of the right to peaceful enjoyment of possessions under Article 1 of the 1st Protocol to the European Convention on Human Rights.
(iii) The Equalities Duties argument: Government had failed to consider properly the equalities implications of the change and so had breached its statutory duty under the Equality Act 2010.
(iv) The supplementary misdirection/irrelevant considerations argument: the decision to change from RPI to CPI was flawed either as a matter of misdirection or through failure to have regard to relevant considerations.
The outcome
The Judgment of the High Court was handed down on 2 December 2011. The claimants only required any one of the four challenges to be successful to have the Government’s action declared unlawful.
The Court was split on challenge (i) ‘The construction argument’ with two judges finding in favour of the Government, and one finding that the decision was unlawful and should be quashed. The Courts found unanimously against both sets of Claimants on the remaining 3 heads of challenge.
The court’s reasoning for the decision was that:
(i) Provided that the Secretary of State for Work and Pension chooses a fair and genuine measure for estimating the increase in prices, which legitimately protects the purchasing power of pensions and benefits, he can take into account public finances;
(ii) The representations made to unions and their members did not amount to legally enforceable legitimate expectations;
(iii) The decisions by Ministers were taken before the relevant provisions of the Equality Act came into force, and the previous provisions in the Sex Discrimination Act did not apply because of the unusually high degree of parliamentary scrutiny required under the social security legislation; and
(iv) Because of the finding on (i), irrelevant considerations had not been taken into account.
The Court therefore dismissed both applications for Judicial Review.
Next steps: an appealThis is clearly a disappointing judgment although it does acknowledge that the intention in making the switch from RPI to CPI was to assist deficit reduction. This contradicts the claims of Government that the shift was merely based on CPI being a better measure of inflation.
The FBU immediately instructed our lawyers to proceed with an appeal. The other unions concerned have also joined the FBU in this action and this process is now under way.
Members will be kept informed of the situation as more information becomes available.
Best wishes.
Yours fraternally
MATT WRACK
GENERAL SECRETARY
MW/sll
CIRCULAR 2011HOC0610SS
1st December 2011
TO: BRIGADE SECRETARIES
Dear Brother/Sister,
Officials will be aware of the ongoing consultation around the proposed increases to employee contribution rates for 2012 for the FPS and NFPS. This consultation process has different timescales in England, Scotland, Northern Ireland and Wales and individual responses, based on this English response are being prepared to ensure a consistent approach, are currently being prepared.
The response to the English consultation process (attached for your information) has been submitted in line with the end date of 2 December 2011.
In summary the FBU response reiterates its opposition to the proposals to increase firefighters’ pension contributions across the various fire and rescue service schemes and highlights that these increases are being introduced as a mechanism to raise funds for deficit reduction – an aim which should be treated separately from the objective of ensuring the viability and suitability of occupational pension schemes.
The submission re-emphasises the independent evidence that backs the FBU’s position that there is not a case for increasing firefighters’ contributions.
It highlights arguments including;
1) The proposed increases in contributions will not raise the revenue the Treasury expects due to high expected levels of opt out i.e. the number of scheme members who may choose to withdraw from the scheme following such changes. High levels of opt out also threaten the future viability of the schemes. In addition, the FBU believes that government plans to significantly reduce central funding for fire service budgets in subsequent years would force a reduction in the number of operational staff. This would further compound the impact of opt outs on proposed Treasury initiatives and long term cash flow of the fire schemes.
2) Firefighters already pay extremely high contribution rates as a proportion of salary compared to other public and private sector schemes. The input from our employers (the taxpayer) compares favourably with the private sector schemes. Members of the FPS pay 11% employee contribution rates. This, along with some police contributions, is among the highest in the public sector. Members of the NFPS pay 8.5% of salary, significantly higher than most other schemes.
3) Firefighters are hit particularly hard by the proposed increases in contributions, given our schemes. This unfairness is keenly felt by firefighters and may have an adverse effect on their career decisions.
4) The FBU believes that the proposal to increase contributions is simply unfair to firefighters. For individual firefighters, the proposed increase in contributions would be imposed on the back of no pay increase for 2009‐2010 and the two‐year pay freeze imposed from 2010 in the fire and rescue service. With increases in the cost of living running at around 5%, this has already caused considerable financial hardship for FBU members.
The response also outlines FBU concerns around specific issues such as;
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Financial implications of opt outs,
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Impact on future cash flow
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Imposition of tiered contributions
And in concluding finds:
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The proposed increases in contributions will not raise the revenue the Treasury expects due to high levels of opt outs.
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Government plans to significantly reduce central funding for the fire service budgets in future years would reduce the number of operational staff. This would further compound the impact of opt outs on proposed Treasury initiatives and on long term cash flow of the fire schemes.
-
Firefighters already pay extremely high contribution rates as a proportion of salary compared to other public and private sector schemes.
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The FBU has presented evidence to illustrate that increasing contributions will be financially self‐defeating.
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The protection for low paid workers does not apply to members of either the FPS or the NFPS irrespective of the duty system they work.
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The proposal to introduce these tiered contributions will have a large impact on the willingness of firefighters to apply for promotion to middle manager roles. This will have a dramatic effect on the effectiveness and efficiency of the fire service.
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The government has not recognised the impact of scheme members facing a long term increases in employee contribution rates and reduction in benefits and how this will affect their decisions.
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Although it is not a feature of this consultation document the FBU feel that it is appropriate that the issue of an employee cost cap is addressed. In recognition of many of the issues raised in this response the FBU feel that the employee contribution rates should be capped at the current rate.
To supplement the submission the FBU asked independent actuary First Actuarial to provide a report with evidence that supports the unions concerns. This report is included as appendix A.
The FBU submission for England, Scotland, Northern Ireland, Wales and supplementary report will shortly be available to view on the FBU website.
Yours in Unity,
SEAN STARBUCK
National Officer
SS/EMH
CIRCULAR 2011HOC0578SS
17th November 2011
TO: BRIGADE SECRETARIES
Dear Brother/Sister,
You will be aware that the union has submitted several documents which aim to support our arguments against the Government’s proposals to increase employee contributions and to impose changes to fire service pension schemes.
These documents, which have been described as robust and an expert analysis, are currently being considered by Government before any cost ceiling is set. This delay followed a request for a postponement from the union to allow specific factors to be discussed further. As part of these ongoing discussions the FBU is continuing to meet with Government representatives at all levels and has been gathering more evidence which it feels may influence any decision on pension scheme proposals.
On 8 November 2011 the FBU wrote to the English Fire Minister and his equivalent in Scotland, Northern Ireland and Wales and brought their attention to a document that the Home Office commissioned in 1996. This document ‘Age limit for serving firefighters’ (attached for your information) was a report by Dr Michael Haisman for the Home Office Fire Research and Development Group and looks at the fitness demands of firefighting and the various effects of aging on operational firefighters.
The report concludes that;
‘Raising the current retirement age limit of 55 years would result in diminishing numbers being able to meet the requirements: there is, therefore, no case for raising the limit’.
It also recommends that;
‘the existing limit of 55 years is retained’.
The FBU has already presented robust evidence that stands in opposition to the Government’s proposal to increase the normal pensionable age. Recommendation 14 of the final ‘Hutton Report’ said the Government should therefore consider setting a new Normal Pension Age of 60 across the uniformed services. The FBU has presented substantial evidence to demonstrate that after consideration the NPA should not be raised. By submitting the Haisman report the FBU highlight that this evidence also includes a similar recommendation from a Government commissioned study.
Yours in Unity,
SEAN STARBUCK
National Officer
CIRCULAR 2011HOC0541SS
3 November 2011
TO: BRIGADE SECRETARIES
Dear Brother/Sister,
Delegations from several brigades and regions have taken part in lobbying their respective Members of Parliament as the FBU continues to campaign to defend public service pensions. I am aware that these lobbies have taken place in person, centrally at Westminster or locally at surgeries or on fire stations, or via letters to MPs.
MPs have been asked to sign early day motion 2049 (Firefighter Pensions), to raise issues with the Fire Minister and also in relevant debates in Parliament. To date 105 MPs from all parties and parts of the UK have signed the early day motion which reflects the tremendous effort of those who have become involved in this process.
Officials should also be aware that the lobbying has had an additional impact on the fire service pension position and a good example of this can be evidenced in the debate that followed the statement by Danny Alexander on public service pensions that took place yesterday.
Following the statement several MPs raised issues specific to the fire service pensions. Extracts from the debate highlighting these references are included in the attachment that accompanies this circular.
FBU head office and the FBU Parliamentary Group have been working tremendously hard to make sure that this issue is brought to the attention of all MPs and recognise that issues were also raised by Conservative MPs in the debate yesterday which highlights the strength of feeling that the continued lobbying efforts are creating.
Please take this as an encouraging sign to show those of you that have lobbied that your efforts are being recognised and those that have yet to lobby as an indication that there is a great deal to gain from becoming involved in this process.
Head Office has a simple system for supporting delegations wishing to lobby their MPs which involves the FBU Parliamentary Group and National Officer Dave Green.
If you wish to lobby your MP please contact Dave dave.green@fbu.org.uk for further details.
Yours in Unity,
SEAN STARBUCK
National Officer
SS/EMH
Attachment
MP’s involved in the Pensions Debate 02nd November 2011
CIRCULAR 2011HOCO540MW
3 November 2011
TO: ALL MEMBERSDear Brother/Sister,
You will be aware that the Chief Secretary to the Treasury, Danny Alexander, delivered a statement to the House of Commons yesterday that set out a number of alterations to the government’s position on public service pensions.
He emphasised that this offer;
‘increases the cost ceiling and provides for generous transitional arrangements for those closest to retirement’.In addition to this statement, the Treasury issued a document (Public Service Pensions: good pensions that last) which provides further detail on this latest position. (The full statement and the good pensions at last document can be viewed on the FBU website).In short the new position sets out the following:
- An improved accrual rate of 60ths instead of the previous accrual rate of 65ths;
- Certain protection measures for public service workers who are closest to their retirement age:
‘Protect public sector workers who, as of 1 April 2012, have ten years or less to their pension age. It is my objective that these people see no change in when they can retire, nor any decrease in the amount of pension they receive at their current Normal Pension Age.’
This is subject to scheme specific discussions determining the fairest way of achieving this and ensuring costs to the taxpayer do not exceed the forecasts of the Office for Budgetary Responsibility (OBR) on public sector pension costs.
- Government’s objective to ensure that no further reforms to scheme design and contribution rates are necessary for at least the next twenty-five years.
- Adjusted (higher) cost ceilings for the four schemes that have already had cost ceilings set. Danny Alexander stated that;
‘this change provides an increase of around eight per cent in the amount of money scheme negotiators have to work with’We will be assessing the detail of these proposals and will give a further explanation to members in the near future.
The position of the Firefighters’ Pension Schemes is slightly different to the four schemes mentioned in this document simply because government have delayed setting a cost ceiling for fire service schemes, at our request, to allow further specific occupational factors to be considered in more detail. In addition to the protection outlined in this document the FBU has been highlighting issues specific to the fire service schemes that require additional protection.
The FBU has been exchanging substantial evidence to support our concerns and is continuing to discuss these with CLG and their actuarial advisors.
We expect that the cost ceiling for the firefighter schemes along with a scheme reference design will be set by the end of November after further discussion around specific occupational assumptions has taken place. In addition to this the FBU has had the opportunity to discuss issues with the English Fire Minister and his counterparts in Scotland, Northern Ireland and Wales. Further such discussions will take place before the cost ceiling is set.
Throughout these discussions we have made clear our opposition to the cost ceiling process. Nevertheless, in view of the government intention to set cost ceilings we have argued that the process must be based on realistic assumptions which reflect the specific occupational nature of the roles. For example, we have challenged the current assumptions about the extent of ill-health retirements in an aging fire service workforce.
Once cost ceilings are set the Treasury has indicated that scheme specific discussions can take place to vary the proposed scheme design to reflect the nature of the occupation, but cannot exceed the cost ceiling. You will recognise the importance the FBU placed on our getting a realistic cost ceiling which allows this flexibility rather than an unrealistic one that placed a straitjacket on any future discussions.
Discussions are ongoing and the FBU welcomes the government’s move to improve cost ceilings for those four schemes that were set on 7 October but it is essential that members recognise that the government is still proposing public service workers pay more, work longer and get less.
It is important that branch meetings still take place and the union prepares for national strike action in the event that these ongoing discussions do not deliver an outcome that is acceptable to members.
Best wishes.
Yours fraternally,
MATT WRACK
GENERAL SECRETARY
SS/EMH
Attached documents:
DA Statement 02nd November 2011
HM Treasury: Good Pensions that last
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