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MAKING THEM PAY
ick Ginty who retired in August 2006 after 32 years service took part in the campaign by writing to the Department for Communities and Local Government (CLG) using a proforma letter provided on the Union’s website. “I didn’t count on getting anything,” he says, “but I got a substantial increase in the lump sum that had already been paid to me. This could not have been achieved without a Union with expertise that is always at the service of its members.” Fifty-seven-year-old Mr Ginty, who has two daughters and two grandsons, has been a lay union official in London, so “I know how hard it is to work things correctly to get the right results”. The extra money was especially welcome this year as one of his daughters is getting married – to another firefighter – which means extra expense; and the credit crunch led to him being made redundant from the part-time job he took after retirement. The credit crunch also meant that the lump sum he already had, which he invested carefully, was diminishing in value. Jack Imrie of Chelmsford, Essex, retired a
A campaign by the FBU has improved lump-sum pension payments for hundreds of retired firefighters
few months later than Mr Ginty, in April 2007. He was 55 and had put in 29 years. He took a quarter of his pension as a lump sum. He says he felt at the time that the lump sum was not as big as it should have been, but did not realise there was anything that could be done about it until he heard that the FBU was looking at the issue. Then, like Mr Ginty, he wrote to CLG, using the FBU standard letter. But he did not realise the Union had won its campaign until the extra money appeared in his bank account. “It was a lot of money and I had no idea it was coming. We’re lucky to have a Union which can devote itself to welfare and health and safety issues,” he says. “The FBU is really good on welfare issues like this and can concentrate on the stuff that
affects individuals. The FBU will devote time and money to an issue like this. You don’t pay a lot for your union, it’s pretty good value. This was something that had to be sorted and they sorted it.” The problem arose after Mr Ginty, Mr Imrie and hundreds of other recently retired firefighters decided to exercise their right to take up to 25 per cent of their pension pot as a lump sum payment. This is known as “commuting” part of the pension, and the amount of the lump sum is calculated by the Government Actuary’s Department (GAD). The amount you get when you commute your pension depends on the amount you might be predicted to receive if you had taken the money as pension. So it is based on a calculation of life expectancy and other factors, such as predicted movement of interest rates. As life expectancy over the population as a whole increases, so commutation rates should increase. When Mr Ginty and Mr Imrie retired, the GAD had not revised the tables from which January/February 2010 FireFighter 11
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the lump sum for each individual is calculated since 1998. The reason for this was a 1989 decision by the Thatcher government that the GAD should have a different sort of relationship with other government departments, treating them as its clients. This meant that it would only revise the figures for firefighters when the Department for Communities and Local Government (CLG) asked it to. New figures were worked out in 2006, but CLG only applied them to those who retired after 1 October 2007. The problem was, though, that life expectancy had been steadily rising. The Union made the case that taking it back to October 2007, when it was the first revision since 1998, was not radical enough. CLG chose this date because the cost of bringing in people who had retired earlier was likely to be significant. Police officers suffered from a very similar problem. The GAD did not update their commutation calculations either, because the Home Office did not ask it to. The Police Federation took the case to judicial review and in March 2009 Mrs Justice Cox found in favour of the Police Federation. The figures, she said, must be backdated. The fact that it was expensive to do so was not the point: “Affordability and public sector implications are in my judgement irrelevant.” The Police Federation got its backdating.
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ut the FBU wanted an earlier date than the one awarded to the Police Federation. The FBU discovered that the GAD had written to CLG in August 2006 highlighting new factors in the calculation. This had been done 15 months before the 1 October 2007 retrospective application date which the CLG had proposed. So CLG was aware that the calculations had changed. On that basis, the FBU demanded that payments should be made to those who had retired at any time during that 15-month period. On that basis, August 2006 should be the cut-off and those retiring on or after then should be entitled to an addition to the lump sum. They are also entitled to interest on the
money since they should have had it when they first retired. The date eventually decided upon was 22 August 2006, since that was the actual date on which the GAD had written to the CLG. For Nick Ginty, it could not be better – he retired exactly a week after that. But other members will have missed out, having retired a short while before 22 August 2006. The FBU is now taking legal advice on whether it can claim backdating to 2001. In a circular, CLG told fire authorities: “The additional amounts must be paid to members as soon as can be arranged. The costs will be reimbursed to authorities by CLG. Interest must be paid on all additional amounts since they are being made more than three months after the entitlement arose.” It added that if any affected firefighters have died, the money will be paid to their estate. And that is why firefighters like Nick Ginty and Jack Imrie, who retired between 22 August 2006 and 1 October 2007 and commuted part of their pension, are seeing additional sums of money arrive in their bank accounts to reflect new actuarial calculations. “This is a real and substantial achievement which will make a difference to the lives of many members” says Sean Starbuck, the national official who deals with pensions. “The FBU does not stop looking after firefighters just because they have retired.”
Jack Imrie: ‘The FBU sorted it’
‘This is a real achievement. The FBU does not stop looking after firefighters just because they have retired’
12 FireFighter January/February 2010
ILLUSTRATION: PETER TILL
Nick Ginty: ‘I didn’t count on getting anything’
It pointed out that the figures were ready on 1 December 2006, and the judge agreed that the figures should be backdated until then. Retired police officers who commuted part of their pension, and retired between 1 December 2006 and 1 October 2007, started receiving additional sums of money to reflect the new figures. The FBU, which had been watching the police case carefully, pointed out that the principle applied also to firefighters. While the Police Federation case was before the courts in August 2008 the FBU launched its Fairer Commutation Campaign and asked retired members to download a model grievance from the Union’s website with which to raise the matter with CLG. More than 5,000 members did so. The campaign was launched following the announcement in May 2008 of new and improved “gender neutral” commutation factors. The union centrally raised the issue with CLG and the GAD.
PENSIONS
Who is going to defend fire service pensions? T
Sean Starbuck, FBU national officer, explains the latest proposals on pensions
he Fire Brigades Union has a proven history of defending the pension rights of its members. It has achieved some notable successes in recent years including defending ill-health provision for members, campaigning successfully for a fairer commutation factor implementation date and gaining access to a pension scheme for firefighters working the retained duty system (RDS). Common to each of these successes is that other organisations have “talked the talk” but that the FBU has “walked the walk” – alone. Recent rumblings around public sector pensions mean that we may be tested again. At the Firefighters Pension Committee (FPC) on 15 March this year, the Department for Communities and Local Government (CLG) presented three papers which spelt out the changes it wanted to make to the 1992 Firefighters Pension Scheme (FPS) and, to a smaller extent, to the 2006 New Firefighters Pension Scheme (NFPS). These papers – pensionable pay, options for the future, cap and share – were introduced as possibilities for committee members to discuss and give views on.
Pensionable pay
The FBU had been raising for a considerable time issues around the inconsistent way that fire and rescue authorities 16 FireFighter June 2010
decide what element of pay is pensionable. We welcomed a previous consultative paper (FSPC 11/2009) designed to establish how any anomalies could be dealt with in the future. However, the pensionable pay paper proposed changes that raised huge concerns and were both unnecessary and inappropriate at this forum. They are issues contained in the Grey Book and should be dealt with at the National Joint Council. After a strong representation from the FBU this paper was withdrawn and CLG indicated that further work would be carried out before it was represented in the future.
Options for the future
The options for the future paper can only be described as a kite-flying exercise by CLG. The FBU recognised this tactic and immediately challenged CLG to provide more details on the options before any real discussion could take place. CLG resisted this challenge initially but eventually agreed that they would provide more information to the next FPC. The FBU has subsequently written to CLG to emphasise the requirement for information and informed CLG that the union intends, if necessary, to use an actuary to challenge its assumptions. Unfortunately one organisation which claims to represent managers in the fire service did not recognise the game that CLG was playing and has responded by indicating what changes may be acceptable, therefore prematurely setting its bottom line expectations. The FBU has made it clear to CLG that we will only consider options when it has all the relevant information and it will not be pressured into a knee jerk reaction on an issue of this importance to members.
Cap and share
The final paper – cap and share – outlined CLG’s intention to introduce a cap and share system to the FPS and the NFPS. Cap and share is a method that is being adopted in a number of public sector schemes to reduce the risk of pension
cost increases to the employers. In brief, if actuarial factors show that the cost of the scheme has increased, then members have to share the cost of the increase. Once the employers’ share reaches a cap determined by the Treasury then members have to meet the entire increased cost. Members share the cost or bear the cost by increasing contributions or taking a cut in their benefits. CLG explained that cap and share would be imposed on the firefighters’ pension schemes following their next valuation in 2011 and will come into effect around 2016. The 2011 valuation would be used to examine how the schemes have fared since 2007. Changes to assumed rates of inflation, pay increases and life expectancy will be costed and subjected to the cap and share arrangement. The FBU outlined that there was much more detail required on this issue before any decisions could be made and highlighted that the risk-sharing element of the decision would have to be considered in great detail, especially in the 1992 FPS, given that it is a closed scheme.
What next?
All three of these proposals are clearly linked and the FBU executive council has decided to request more detailed information before any decision is taken. It is very important to remind CLG that the whole point of
introducing the NFPS in 2006 was based upon it being more cost effective and necessary to ensure the viability of the schemes. It is clear that the projected costs of introducing this scheme have not been measured, and for CLG to suggest that firefighters’ pension schemes have not been reviewed is totally inaccurate. The executive council and all officials and members of the union will receive updates as this situation develops and as more details emerge. The FBU will continue to defend firefighters’ pension schemes with the same determination and commitment that it always has. It would be nice, however, if we did not have to do it alone and other organisations did something other than talk about it.
The FBU has made it clear that it will only consider options when it has all the relevant information and it will not be pressured into a knee jerk reaction on an issue of this importance to members June 2010 FireFighter 17
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embers will be aware that the Con-Dem government has public sector pensions in its sights. The media machine is only too happy to promote the myth that costs are spiralling out of control and pensions are “unaffordable”. We face attacks on a range of fronts – all threaten our pensions. We need to understand the attacks in order to combat them. The Hutton review
Former Labour cabinet minister John Hutton is heading a commission on public sector pensions. His interim report was due out as Firefighter went to press. The full proposals are expected with the 2011 budget. The FBU submitted a detailed report to Hutton highlighting the recent substantive changes in the Firefighters’ Pension Scheme (FPS), including the introduction of the New Firefighters’ Pension Scheme (NFPS) in 2006 and the new-look Local Government Pension Scheme. The response highlighted that these changes were introduced to ensure that the schemes remained “affordable, sustainable and fair” and stressed that there is no evidence yet to show how these existing changes will impact on
future costs. To make further proposals without scrutinising these savings would be unreasonable. Anyone reviewing the firefighters’ pension schemes must recognise that the role of a firefighter is still inherently dangerous. Any changes must take this into account. The FBU has warned that raising the retirement age would create an ageing service. There is no evidence of firefighters being able to work until they are 60 years old in the numbers that would be required, and redeployment opportunities are very scarce, if available at all. The full response can be viewed on the FBU website. Options for the future
The Firefighters’ Pension Committee has been invited to discuss possible options for the future, designed to ensure that the schemes remain affordable, sustainable and fair. (See June Firefighter.) These options include introducing “cap and share”, increasing contributions, tiered contributions, raising retirement age, introducing flexible retirement options, fixed commutation factors, issues for dealing with future pensionable pay and ultimately closing the Firefighters’ Pension Scheme and transferring
individuals into the New Firefighters’ Pension Scheme. The FBU argues that it is a foolish strategy to discuss these “options” unless all the evidence to support any proposed savings is available. The FBU has formally written again to CLG to ask for the figures to be made available. Pension sneak tax
The FBU has responded to a government proposal to change tax relief on pension contributions. These changes, if implemented, would affect a large number of FBU members and could have significant tax implications for members contributing towards pensions schemes (see box). They could affect you if you: ●●get a pay rise ●●get promoted ●●have to retire on ill health ●●simply accrue more pensionable service. The FBU has also produced a briefing to explain the proposal and how it could affect you and what you can do to stop it happening. The response and briefing can be found on the FBU website along with a simple way of emailing your MP to encourage them to oppose this sneak tax proposal.
Fighting the pensions corner FBU national officer Sean Starbuck explains the union’s strategies for defending members’ pensions 14 FireFighter October 2010
“We face attacks on a range of fronts – all threaten our pensions”
What the tax changes would mean Greg, an FPS member with 25 years’ service, receives a promotion worth just under £3,000 and is faced with a tax bill of over £8,000. l Qamar, an area manager, with 20 years’ service, would face a tax charge of £1,336 by simply accruing a further year in the FPS. l David, an LGPS member facing a redundancy situation, will have a tax liability of £23,600. l Colin, an FPS member with 20 years’ service, transferring to London receiving the London weighting allowance but getting no pay rise, incurs a tax bill of £6,544. l Gregory, an FPS member with 25 years’ service retiring on ill health, could get a tax charge of £12,888 (lower tier) or £30,178 (upper tier). It is vital that members contact their MP and explain that this attack on members’ pensions is unacceptable. l
RDS pension After the FBU’s hard-fought legal campaign for RDS eligibility to a pension scheme, a remedy is in sight. This is that RDS firefighters are allowed access to a “modified” scheme that resembles the structure of the NFPS but has the benefits of the FPS. The FBU legal team is in discussion with CLG and the Treasury to agree a blueprint for how this modified scheme will look and to iron out any anomalies that remain. This will then require legislative approval and a period of consultation. Although there is no firm date, progress is expected over the next few months.
Fairer commutation campaign My office has received several phone calls regarding the FBU’s fairer commutation campaign, which has now progressed to the Pension Ombudsman. The latest position is that the Pension Ombudsman has selected a test case from years 2001–2006 and his decision on this will impact on all those who retired in this period. There is no need to submit anything to the Pension Ombudsman at this stage. If this changes you will be informed. More information on pensions on the FBU website www.fbu.org.uk
FBU FIGHTS YOUR CORNER
October 2010 FireFighter 15
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Gambling with our pensions Sean Starbuck explains that government plans mean firefighters are expected to pay more but are not told what they are buying 16 FireFighter January/February 2011
2008 (Scotland 2009). The new scheme, which already included the introduction of tiered contributions, is still looking at over 3% rises by 2014 and then further proposed attacks on the remaining scheme benefits. The Treasury say this “cash injection” is necessary to ensure the sustainability of the schemes, until the benefit reforms currently being looked at in the Hutton review are introduced in 2014. Examples >>The imposed levy would mean firefighters in the FPS face
making contributions of around £330 per month, a rise of over £70, and the prospect of inevitable cuts to benefits being imposed in 2014. >>A firefighter (control) in the LGPS, in addition to benefit changes in 2014, would also be looking at an imposed employee contribution rate increase of around £70 per month. >>By far the worst hit would be senior managers. With the additional levy, a flexi-duty area manager would pay over £300 extra per month. Work longer for less The FBU is objecting strongly to any proposal to increase retirement ages or to replace final salary schemes with career average ones.
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takeholders at the firefighters’ pension committee received a paper last November that outlined the Treasury’s intention to impose a levy on employee contributions across the range of public sector pensions that equates to more than 3% over the next three years. It is completely unreasonable that firefighters are expected to pay more, work longer and get less. We are being told to pay considerably more, and then take a leap of faith that the benefits will be there in the future. Pay more Treasury plans would mean that members of the Firefighters’ Pension Scheme (FPS), which already has the highest employee contributions in the public sector, will rise from 11% to over 14% by 2014. A further imposition of tiered contributions is proposed meaning that some senior managers will end up paying 17% in employee contributions. The New Firefighters’ Pension Scheme (NFPS) does not escape the imposed levy. It will have a 1% rise imposed in 2014 and will also see the introduction of tiered contributions for middle and senior roles, despite already being a 40-year scheme and having an employee contribution rate of 8.5%.
The Local Government Pension Scheme (LGPS) has already seen substantial reform with a new-look scheme introduced in
Any proposal to increase retirement ages is ludicrous and nobody has provided any evidence to say that firefighters can maintain operational fitness in the numbers required to show that any such proposal would be feasible.
The government’s intention is to create a situation in which firefighters in all roles will be expected to work longer and receive smaller pensions on their retirement, even though they will be expected to pay more for this. Even the guarantee that accrued pensions will be protected is not accurate, as the proposed change to indexation from the retail price index to the consumer price index will mean that future pensions will be devalued. The FBU is looking into the possibility of challenging the imposed change in indexing.
Campaign In November 2,500 firefighters lobbied parliament to protest against cuts in the service. Many took the opportunity to meet their MP and to highlight these attacks on our pensions. This is the first step in a campaign that the FBU is launching to defend quality public sector pensions. We cannot have a situation where firefighters are forced out of their pension schemes by unacceptable employee contribution levels. We cannot have a situation where firefighters are expected to pay more for a scheme where unrealistic and unacceptable benefit changes are imposed. The FBU will continue to fight for the pension rights of its members. The FBU is the only union that can make a difference in the fire service. Others make plenty of noise, but it seems that it will, once again, be left to the FBU and its members to take up this challenge. Over the next few months the extent of these attacks on our pension scheme will be unveiled and we must be ready to react. The theme of the Hutton review was affordability, sustainability and fairness. The evidence of it so far, from a firefighter’s perspective, is that all it will deliver is a pension scheme that is unaffordable, unsustainable and unfair. The message from the FBU is clear. We cannot and will not accept these attacks on the pension schemes of our members. January/February 2011 FireFighter 17
THE GREAT PENSIONS ROBBERY The government’s plans for firefighters’ pensions are unfair, unsustainable and unaffordable
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HANDS OFF OUR PENSIONS The Fire Brigades Union has branded government plans for firefighters’ pensions “blatant daylight robbery” – unfair, unsustainable and unaffordable for firefighters. The public service pensions commission report, written by former Labour minister Lord Hutton and published on 10 March, argued that firefighters and other public sector workers should be moved to new pension schemes forcing us to work longer and get less than promised when we retire if career average schemes are imposed. The union insists the government should not implement the report’s recommendations. FBU general secretary Matt Wrack said: “This is the great pensions robbery and is completely unacceptable to firefighters across the UK. “Expecting firefighters to work until they are 60 is wrong. Firefighting is a physically arduous job. Peak fitness is essential where seconds can cost lives. The public will not want an ageing frontline fire and rescue service. “These proposals are unacceptable. The Fire Brigades Union has a warning for the chancellor: Reject Hutton’s pension proposals or you’ll be playing with fire. Firefighters simply won’t accept them.”
Raising retirement ages Hutton recommended raising the retirement age of public sector workers, including those in the Local Government Pension Scheme (LGPS), in line with state pension age. The only exception would be the uniformed services where it would be raised to 60. Although the New Firefighters Pension Scheme (NFPS) already has a retirement age of 60, compared with 55 in the Firefighters Pension Scheme (FPS),
the FBU has argued that there is no evidence that firefighters can continue to work this long in the numbers that will be required to maintain the effective service. Any suggestion of extending the retirement age past 60 is ludicrous as an aged fire service is not in the best interest of the public. Firefighters pay extra for the right to retire early: the contribution rates in the FPS and the NFPS reflect members’ ability to retire earlier than the usual age of 65 in the private sector and elsewhere in the public sector. The argument that firefighters who are no longer able to crew frontline appliances can do other non-operational roles until they retire age 60+ does not hold water. In reality non-operational roles have already been converted to Green Book roles on a lower salary in most cases. Fire authorities have tried to trim operational establishment figures by converting firefighter roles in this way, thereby saving money. The knock-on effect is that there are no real redeployment opportunities for operational firefighters who are no longer able to ride frontline appliances. Sean Starbuck, FBU national officer responsible for pensions, said: “The FBU is very disappointed that Hutton either ignored the concerns raised about raising retirement ages or totally misunderstood the situation. “He justifies raising retirement ages because of longevity after people retire, but misses the point that in the fire service our members have to maintain operational fitness and there is nothing to suggest that they can extend this to cover a rise in retirement age. “It is going to cause a situation whereby more FBU members will have to rely upon
an ill-health retirement, which totally defeats the objective.”
The ‘career average’ threat Hutton’s other main proposal, which threatens firefighters’ pensions, is to introduce career average instead of final salary schemes for future service. Career average schemes provide a pension based on the average pay throughout a worker’s career. The LGPS, FPS and NFPS provide pensions based on final pay in the last years of service. A typical career average scheme differs from a final salary scheme in substantial ways. First, each year’s block of pension has to be uprated. Depending on the uprating figure used, career average schemes can fall behind earnings and inflation. Although Hutton said they should be linked to the higher figure of earnings, there is no guarantee the government will accept the proposal. Second, the effect of career average schemes is even more dramatic for members who are promoted. Individuals who gain promotion and therefore earn more salary, especially towards the end of their career, will be hit even harder by a career average scheme, compared with a final salary scheme. The Fire Brigades Union asked independent pensions experts First Actuarial to assess the impact of a career average scheme. On uprating alone, a career average scheme would cost firefighters between £500 and £1,800 a year on their pensions. Anyone in an officer role would face even higher losses. In a job like firefighting, where progression and promotion, together with increased professionalism and training, are central to our careers, an end to final salary schemes would represent a savage cut to deferred pay and future living standards.
As we were saying …
PA PHOTOS
Lord Hutton: Ignored concerns on retirement age and misunderstood the situation
“The [government] would not move on the NFPS retirement age of 60. This was despite clear warnings from the FBU and employers that this will lead to a spate of ill-health and injury pensions as older firefighters succumb to the physical demands of the job.” Firefighter, March 2006
April 2011 FireFighter 11
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Hutton’s report “took for granted” the government’s view that all public sector workers should expect to pay higher contributions. In October last year, as part of the comprehensive spending review which cut central government funding to the fire and rescue service, the government said it planned for all public sector workers to pay 3% additional contributions. The chancellor plans to start the phased increase in pension contributions from April 2012. The plans have already been raised at the Firefighters’ Pension Committee. For firefighters, an additional 3% would be at least an extra £800 a year – and almost double that figure for officers in more senior roles. Many firefighters already pay the highest contributions for their pensions compared to other public sector workers and more than most private sector pension scheme members. Members of the FPS currently pay up to 11% of salary, which equates to at least £250 per month for a competent firefighter. The LGPS and NFPS also have high contributions compared with other workers in the public and private sectors and a 3% increase would make them much more expensive to members than the average private sector scheme. The Hutton review figures show that the average private sector contribution for open defined-benefit schemes was 5.4%.
Inflation uprating Hutton also took for granted a further attack on pensions which was agreed by parliament last month. The government has changed the measure of inflation
used to uprate pensions from the retail prices index (RPI) to the consumer prices index (CPI). The decision, which came into force at the beginning of April this year, applies not only to public sector pensions, but also to state pensions and some private pensions. The government said that the CPI is a more appropriate measurement of the inflation that affects pensioners, because it excludes housing costs. But many pensioners still have housing costs to pay. We know that the government sees the proposal as a way of saving money. If the plan does save money, it is pensioners who will be paying, now and in the future. Over the past ten years, on average CPI has been 0.75% lower than RPI. At times the difference has been even greater. Although we do not know how price indices will change in the future, a similar difference over the coming decades would cost firefighters thousands of pounds. This change affects the pensions that everyone has built up to date. Pension scheme members were promised a pension that would increase in line with the RPI and not the lower CPI. If the pension you have already earned is linked to the CPI, then that represents a cut in the pension you have already earned.
What we are doing about it The FBU is exploring every political, industrial and legal avenue to oppose the great pensions robbery. The union has already met the fire minister Bob Neill to express in the strongest possible terms our opposition to these proposals. We are liaising with pensioners campaigns and other organisations. MPs in the FBU’s parliamentary group have made countless speeches to complain
WWW.MAUREENMCLEAN.CO.UK
Increased contributions
HOW FIREFIGHTERS COULD LOSE OUT A CAREER AVERAGE SCHEME could cost firefighters between £500 and £1,800 a year from their pensions – and much more after promotion
12 FireFighter April 2011
RETIRED MEMBER Retired in 1991, reduction in pension by 2010 if CPI had been used Firefighter Crew Manager Station Manager Group Manager Area Manager
Difference £1,754 pa £1,872 pa £1,989 pa £2,307 pa £2,465 pa
and harry the government over the issue. Katy Clark MP told parliament on 17 February: “I have always taken the view – the trade union view – that pensions are deferred pay. It is very important that people have certainty in arrangements for their retirement … [People] who will be affected by these changes will be very angry when they realise the impact that the changes will have on them.” FBU officials have met with other trade unions representing over five million public sector workers affected by these changes with a view to coordinating action. The FBU has also asked its solicitors to explore the possibility of legal action to defend members’ pensions. At present the union is ruling nothing out. The FBU wants members to understand the scale of the attack on our pensions that we face. Officials are organising a series of members’ meetings in brigades and regions where the issue of pensions and other challenges are being addressed. Please ensure that you attend your local meetings.
LGPS
Firefighters and other public sector workers rallied against the switch to CPI on 1 March 2011
JUST RETIRED Retired in 2010, minimum reduction in pension by 2030 under CPI Difference Firefighter £3,120 pa Crew Manager £3,460 pa Station Manager £3,869 pa Group Manager £4,439 pa Area Manager £5,138 pa
Members of the Local Government Pension Scheme (LGPS) would lose out heavily from the government’s pension plans. If contributions were to rise by 3%, this would mean a control member who has just started in the job paying an extra £1,000 a year by 2020 and £1,500 a year by 2030. When they retire, their pensions would be reduced by similar amounts due to uprating by the consumer price index (CPI) and by a career average scheme – a triple pensions whammy.
LUMP SUM The FBU asked First Actuarial to calculate the likely effects of the switch to CPI on the commutation lump sum payment. They found that it will cost 8-10% – or between £7,000 and £10,000 less overall.
April 2011 FireFighter 13