National Newsletter October 2011

Pensions

The issue of public sector pension reform has been in the news for some months now and the RFU have been involved in discussions with central government (DCLG) via the Firefighters’ Pension Committee (FPC).

As has been stated by the Government and reported widely in the media, the current cost of public sector pensions are unsustainable  mainly (although not entirely) due to the fact that people are now living much longer.  It is not unreasonable that the Government wants to see public sector pensions both affordable and sustainable in the future.

There are other influences at play here as stated within the Spending Review 2010, the Government’s expectation is that the Firefighters’ Pension Schemes for England deliver annual savings of £33m by 2014-15. In order to ensure that the target can be met, the Treasury requires that schemes deliver 40% of the savings in 2012-13, 80% in 2013-14 and the full amount in 2014-15.

Pension reform is a necessity, alongside other austerity measures to ensure that the country can deal with the deficit and achieve economic growth.  However, in relation to the Fire Service pension matters, it is our role as a stakeholder to engage with the department and provide our views as to how this might be achieved.

The Government has proposed that there should be no increase in member contributions for those earning a whole-time equivalent salary of under £15,000, unfortunately we did not believe there is anyone working the Retained Duty System who falls into this category.

We therefore sought clarification in order to be as clear as possible as to what the potential increase would be, dependant upon individual’s earnings. To quote the average pay of an On Call firefighter in relation to increases in contributions would create a false picture given the differences in activity. Again through our discussions with DCLG, we obtained indicative figures which set out what these increases are likely to be. They show that the increases quoted by ‘other sources’ are to put it mildly, well wide of the mark! What a surprise!

Retained (On-Call) personnel
Under the proposals, the level of employee contribution rates applicable to retained firefighters would be determined on the basis of their reference pay. That is, the whole-time equivalent pensionable pay for that period, of a regular firefighter employed in a similar role and with an equivalent qualifying service. The reason for this is that the final pensionable pay for a retained firefighter is based on the final pensionable pay of a regular firefighter employed in a similar role and with equivalent qualifying service. Therefore it would be appropriate for reference pay to be used in relation to these proposed contribution increases.

The contribution rate would then be applied to the retained firefighters’ actual pensionable pay for the period, each firefighter’s actual reference pay will determine which pensionable pay band they fall within, and therefore the contribution rate that should be applied.

Example 1
If a competent retained firefighter earning £6,000 per year has the reference pay of £28,199 (a Wholetime firefighters basic wage), they would therefore see an increase in pension contributions of 0.6% (or 0.5% with tax relief). The monthly contribution increase would only be on their actual earnings, in this case £3.00 (gross).

Example 2
If a competent retained Watch Manager (B) earning £16,000 per year has the reference pay of £34,961 (a Wholetime Watch Manager (B) basic wage), they would therefore see an increase in pension contribution of 0.8% (or 0.6% with tax relief). The contribution increase per month would be approx. £10.67 (gross).

Example 3
If a retained firefighter in development earning £4,000 per year has the reference pay of £22,038 (a Wholetime firefighters (in development) basic wage), they would therefore see an increase in pension contributions of 0.6% (or 0.5% with tax relief). The contribution increase per month would be approx. £2.00 (gross).

Example 4
If a competent retained Crew Manager earning £13,000 per year has the reference pay of £31,263 (a Wholetime Crew Manager basic wage), they would therefore see an increase in pension contribution of 0.8% (or 0.6% with tax relief). The contribution increase per month would be approx. £8.67 (gross).

Example 5
If a competent retained Station Manager (A) earning £17,000 per year has the reference pay of £37,456 (a Station Manager (A) basic wage), they would therefore see an increase in pension contribution of 0.8% (or 0.6% with tax relief). The contribution increase per month would be approx. £11.33 (gross).

See Annex A for a list of all pensionable pay ranges and their proposed contribution increase.

Remember these figures are gross, the actual increase will be lower, how much lower will depend on individual circumstances but as a rule of thumb, the additional monthly cost should be lowered by approx. 25% due to tax relief.

The proposed contribution increase shown in Annex A is, at the time of going to print, only applicable to England. While similar savings will have to be found in Northern Ireland, Scotland and Wales, as devolved administrations they are able to act independently, although we assume that similar proposals will be forthcoming.

It is in our view, vital to only comment on what is being proposed not what might be proposed in the future.

The proposed increases allow for the current pension benefits to be protected and therefore remain the same.

Membership of the NFPS
Statistics provided by DCLG for 2009-2010 show that in England, 6,584 On-Call personnel were members of the NFPS, that’s approx. 54% of RDS staff in England.

Those on Dual Contract – whole time retained
We can also provide clarity on how contributions will be calculated under the proposals for those who have both a retained and a full-time contract. Under rule 4, part 14 of New Firefighters' Pension Scheme (2006), where a fire-fighter has two contracts – whether they are with the same authority or two separate authorities – each employment is treated separately for pension purposes.

We would therefore anticipate that the level of contributions payable on a full-time contract would be based on full-time pensionable pay, and that the contribution rate payable on the retained contract would on the basis of their reference pay for that contract. This may result in the contribution rate applied to pensionable pay from the retained contract being different to that applicable to the full-time contract depending on whether the individual works to a different role in each post.

FPC meeting 13th September
At the most recent pensions meeting held on 13th September much of the meeting was taken up debating the issue of lack of data and figures which will inform the decision on percentage increases for the years 2013/14 and 2014/15. The data to inform this has yet to be presented to the Firefighters’ Pension Committee (FPC). Until we have this information and discussions have taken place we are unable to say any more.

Discussion also took place on the potential for members to opt out of the scheme if contributions for the years 2012 -15 increase significantly. It would assist us if members with an opinion on this would take the time to let us know, it would only be a straw poll at best but as always it is always worthwhile to hear what you have to say. It is also worth noting that the figures we have provided show the indicative increases before tax relief. In practice, the actual reduction in take-home pay is likely to be less.

Predictably, the insults and accusations are already in print. A word of caution is required.  If an organisation wanted to ‘up the ante’, get the blood boiling, and workers ‘out the doors’ the best way is to be selective with the information you circulate and hope that the target audience falls for it ‘hook line and sinker’ .  What we’ve done is provide our members with the latest and most accurate information available. The figures provided are not ours, they are DCLG indicative figures reproduced with the department’s permission, designed to show how the employee contribution rate will be determined for retained firefighters.

There are still a few people out there who fell for the hype (remember the £7.5k retainer fee?), we suspect that a similar charm offensive will take place to encourage members to support industrial action. Please be aware though, that if you remove your labour your local community will be put at risk and it is likely that public support will evaporate over what is largely a whole time issue. Perhaps the overtures being made at present should be viewed with suspicion based upon previous ‘successes’.

Separately, DCLG have now published a consultation document (available from our website) proposing additional amendments to both the Firefighters’ Pension Scheme (FPS) (1992) and the New Firefighters Pension Scheme (NFPS) (2006) pertaining to medical appeals, age discrimination among other issues which are separate from the proposal to increase pension contributions.

The future
Ultimately the Government’s intention is to have an individual cost ceiling for each public sector pension scheme so that it remains manageable and affordable, in addition another objective is to move away from the final salary scheme to a fairer career average scheme.

Be assured that the RFU will be focusing on the interests of its members in isolation without the burden of any conflicts of interests regarding other duty systems. It has to be said that we set ourselves the highest standards when we advise our members, pensions for some are a very emotive issue and we understand that fact. However depending on who you listen to, the truth is always the first casualty!

You may find it helpful to read the departments FAQs which are available here.

Part-time workers compensation payment
Quite rightly a large number of members have contacted RFU HQ to enquire as to what is happening regarding the compensation payment. While there is absolutely no doubt that the payment will be made, the question is when this is going to happen cannot be accurately predicted.

As you know due to data protection issues, all the data is being anaylsed by an independent third party, Popularis. The RFU submitted all the relevant information to Popularis in May this year, to our knowledge there is no issues with the data we have provided, however, we understand that some of the data provided within the whole process has caused a delay, we are hopeful (but cannot guarantee) that payments will be this side of Christmas.

Why be a member of the RFU?
The RFU is its own worst enemy by not promoting all the successful work that we undertake on a regular basis. For a small organisation, locally and nationally the RFU punches above its weight, time and time again. With regards to the discipline and grievance processes we much prefer to engage with Fire & Rescue Services at an early stage in an effort to ‘nip in the bud’ issues that could, if allowed to, manifest into larger more complicated issues, while this is not always possible in every case it certainly is for the majority. The grievance and disciplinary processes can be long winded and extremely costly and a huge drain on resources. However, sometimes the RFU is notified of a problem far too late in proceedings so we advise members to inform their local officials as early as possible, all communications are on a strictly confidential basis. Here are some actual examples of how we have supported our members.

Case history #1
Our member was dismissed on the grounds of capability after being an employee for over 9 years. It was clear to us that the Service had not followed its own capability procedure and had not given their employee the necessary support through what was a very difficult time. Through our representations within the appeals process our member was reinstated and given an appropriate development plan to enable him to return to competence levels.

‘Without the support of the RFU I would not be able to resume my Fire Service career, a job I love. I’m indebted to the RFU and will be forever grateful.’

Anon

Case history #2
Another member was dismissed this time on the grounds of alleged ‘gross misconduct’, again it was clear to us that the entire case, which spanned over 2 ½ year period and was extremely complicated, had been poorly managed and there were a number of mitigating circumstances and procedural errors that had not been taken into account. Through RFU representations at the appeal hearing, our member was reinstated within his operational role whilst at the same time receiving a lesser sanction.

‘Thanks to the RFU I have now got my career back and I along with my family can get on with our lives.’

Anon

Case history #3
Five Retained Fire-fighters were identified by their Fire and Rescue Service and placed under ‘Level 3 Disciplinary’ with a threat of dismissal, because of the new Driving Regulations (INSCOPE).

The RFU local officials represented four of these fire-fighters at their hearings; the other fire-fighter was represented by a different trade union.

The RFU accessed information that was used within the hearings along with letters from two of the primary employers of the members involved.  This showed that the employer was flexible with driving times etc. and proved that the Fire Service had not spoken to the employers.  Had they done so the hearings would not have been necessary.

As a direct result the four fire-fighters represented by the RFU won their cases and kept their jobs.

Unfortunately the fifth fire-fighter was dismissed from the Service.

e-Bulletin
You will find here our most recent e-Bulletin that was issued in July 2011. In an effort to reduce costs and inform our membership of national developments quickly, we often send out e-bulletins via individual email addresses, if you would like to receive these notifications please email hq@therfu.org and request to be placed on the database.

New National website

The RFU launched its new-look website recently (therfu.org) which allows for more interaction with members and is smart-phone friendly. We hope that members will register their details on the website and provide comments either generally or in response to specific articles.

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