1. The Fire Brigades Union Pensions Campaign 1 Pensions Crisis The Facts The Fiction The Fight

2. The Fire Brigades Union Pensions Campaign 2 1. Background Information on Pensions 2. Arguments for Change 3. Proposed Changes to FPS 4. Proposed Changes to LGPS 5. Timeframes for FPS 6. Timescales for LGPS 7. Conclusions 8.Is It Legal? 9. What Has Been Done So Far? 10. What Can We Do Now?

3. The Fire Brigades Union Pensions Campaign 3 1. Background Information on Pensions Types of Pensions State Pension – Available to All State Pension – Available to All Private Pensions – Private Sector or Individual Investments Private Pensions – Private Sector or Individual Investments Public Sector Schemes – Civil Service, Teachers, Police, Fire Service, Health Workers etc. Public Sector Schemes – Civil Service, Teachers, Police, Fire Service, Health Workers etc.

4. The Fire Brigades Union Pensions Campaign 4 Main Changes For Each Scheme State Pension State Pension Retirement Age Private Schemes Private Schemes Closure & Final Salary Element Public Sector Schemes Public Sector Schemes Retirement Age, Contribution Rates, Accrual Rates, Ill Health/Injury Benefits & Closure With New Lesser Schemes

5. The Fire Brigades Union Pensions Campaign 5 Firefighters Pension Scheme & Local Government Pension Scheme Firefighters Pension Scheme: Firefighters Pension Scheme: Open to Wholetime Firefighters Only Unfunded Is it Expensive? Local Government Pension Scheme: Local Government Pension Scheme:Funded

6. The Fire Brigades Union Pensions Campaign 6 Issues Common to all Pension Schemes Mortality Assumptions Mortality Assumptions 30% Improvement in the 8 Years to 2002 Longevity – Life Expectancy Longevity – Life Expectancy Government Report states that: Government Report states that: People are not paying enough Contributions People are Living Longer People are Retiring too early

7. The Fire Brigades Union Pensions Campaign 7 Nearest Comparable Scheme to FPS Police Pension Scheme Police Pension Scheme New Police Scheme for new entrants, with existing scheme ring-fenced New Police Scheme for new entrants, with existing scheme ring-fenced Fire Service only Emergency Service not being afforded the Protection of Ring- Fencing Fire Service only Emergency Service not being afforded the Protection of Ring- Fencing Union Policy

8. The Fire Brigades Union Pensions Campaign 8 2. Government Arguments For Change Affordability! Affordability! Flexibility! Flexibility! Modernisation! Modernisation!

9. The Fire Brigades Union Pensions Campaign 9 Phil Woolas Quote: " All public sector pension schemes are facing change and it is right that we modernise firefighters' pensions - the most expensive scheme in the public sector. "We have carefully considered the responses to our pensions consultation and these proposals reflect the comments we have received, particularly the concerns of serving firefighters. We want a new scheme which is generous but affordable for both firefighters and the taxpayers that fund them and changes to the existing scheme which will help limit future costs. "These proposals are in line with our aim of developing a modern Fire and Rescue Service and honour our commitment to introduce new pension arrangements. They also reflect changes in the new legal requirements, for example on pensions taxation." *Local Government Minister Phil Woolas – September 2005

10. The Fire Brigades Union Pensions Campaign 10 Responsibilities Home Office: Police Home Office: Police Department of Work & Pensions: Health, Teachers, Civil Service, Etc Department of Work & Pensions: Health, Teachers, Civil Service, Etc Office of the Deputy Prime Minister: Local Government (LGPS) & Firefighters (FPS) Schemes Office of the Deputy Prime Minister: Local Government (LGPS) & Firefighters (FPS) Schemes

11. The Fire Brigades Union Pensions Campaign 11 3. Proposed Changes to FPS ODPM Consultation Exercises 1. Existing Scheme (FPS) 2. New Scheme (FPS) *Still Awaiting Detailed Consultation Documentation from ODPM on Injury/Ill Health Retirements, (due since 14 th January 2005)

12. The Fire Brigades Union Pensions Campaign 12 ODPM Proposes To: Amend The Existing FPS Scheme For All Existing Members. Amend The Existing FPS Scheme For All Existing Members. Introduce a New FPS Scheme For New Entrants Introduce a New FPS Scheme For New Entrants

13. The Fire Brigades Union Pensions Campaign 13 Eligibility For The New FPS Scheme New Wholetime Firefighters. New Wholetime Firefighters. New & Existing Retained Firefighters New & Existing Retained Firefighters Existing Wholetime Firefighters Who Choose To Opt In. Existing Wholetime Firefighters Who Choose To Opt In. Control Staff Are Deemed Ineligible!

14. The Fire Brigades Union Pensions Campaign 14 Main Changes Retirement Age & Accrual Rates Retirement Age & Accrual Rates Transitional Arrangements Transitional Arrangements Deferred Pension Deferred Pension Ill-Health Retirement Ill-Health Retirement –Higher Tier: with enhancement –Lower Tier: without enhancement Survivor Pensions Survivor Pensions Death Benefit Death Benefit

15. The Fire Brigades Union Pensions Campaign 15 Example 1 If a member reaches the age of 50 to 55 and has attained a minimum of 25 years pensionable Service, but not 30 years, they will be able to retire on pension. The Pension calculation, however, would be split between pre and post 1 st April 2006 service. The pension for pre 1 st April 2006 will be unreduced. Cont’d

16. The Fire Brigades Union Pensions Campaign 16 Example 1 (cont’d) However, the Pension post 1 st April 2006, will be reduced, by 5% for each year, between age of retirement and age 65 (deferred pension age) Scenario: A member retires at 50 with 25 years pensionable service. The post April 2006 Pension will be reduced by 75%, (15 Years x 5 %) *5 % is the Government Actuary figure

17. The Fire Brigades Union Pensions Campaign 17 Example 2 A Member with 30 Years pensionable service completed by age 50, continues to work until age 55. Accrual Rate = 1/60 th per year for years 1 – 20. Fast Accrual rate = 2/60 th per year for years 21 – 30. Members can though, now accrue up to a maximum of 35 years pensionable service.

18. The Fire Brigades Union Pensions Campaign 18 Example 2 (con’t) Accrual rate for last 5 Years (or part thereof) is 1/45 th (equivalent to 1.33/60 th ) Therefore with 35 years pensionable service achieved, the pension will be 35/45 th of final pensionable salary, (equivalent to 46.7/60 th )

19. The Fire Brigades Union Pensions Campaign 19 Example 3 Member continues to work to age 50+, and after 30 years pensionable service in existing scheme, joins the new scheme. At eventual retirement age the pension would be 40/60 th plus 1/60 th for each completed year of pensionable service in the new scheme. Accrual Rates = 40/60 th + 5/60 th = 45/60 th Reason for Choice? = Possible lower contributions would boost members take home salary.

20. The Fire Brigades Union Pensions Campaign 20 4. Proposed Changes to LGPS Removal of the “85” Rule Removal of the “85” Rule – this would increase normal retirement age from 60 to 65; and – raise the earliest retirement age from 50 – 55, excluding Ill Health Increased contribution rates (currently 6%) to a range between 5.5% & 9% (dependant on earnings) Increased contribution rates (currently 6%) to a range between 5.5% & 9% (dependant on earnings) Restrict Pensionable Pay (basic salary, excluding allowances) Restrict Pensionable Pay (basic salary, excluding allowances) Ill Health Retirements Ill Health Retirements Two Tier System

21. The Fire Brigades Union Pensions Campaign 21 Two Tier Ill Health Scheme proposals intended to differentiate between; 1. Those that are permanently incapable of performing any gainful employment; and 2. Those incapable of continuing in their current role, but capable of other gainful employment. (Pension based on length of service only) NB: Only those in the first category would be eligible for an enhanced pension.

22. The Fire Brigades Union Pensions Campaign 22 5. Timeframes for FPS ODPM Plan To Close Membership Of The Existing FPS Scheme & Open The New Scheme on; ODPM Plan To Close Membership Of The Existing FPS Scheme & Open The New Scheme on; 1 st April 2006 It is Still Possible that Timeframe May Slip It Is Possible That Different Timeframes will Apply Across The UK. ODPM Still Have Yet To Publish Ill Health/ Injury Proposals

23. The Fire Brigades Union Pensions Campaign 23 At This Time We Must Assume, that ODPM Will Try To Meet Their 1st April 2006 Timeframe For The Implementation of a New Scheme and Changes to the Existing Scheme. At This Time We Must Assume, that ODPM Will Try To Meet Their 1st April 2006 Timeframe For The Implementation of a New Scheme and Changes to the Existing Scheme.

24. The Fire Brigades Union Pensions Campaign 24 6. Timeframes for LGPS Government decided not to proceed with changes to LGPS in April 2005 Government decided not to proceed with changes to LGPS in April 2005 just prior to the Election, and in the face of Public Service Strike Threat Government said they intended to seek further consultation with key stakeholders Government said they intended to seek further consultation with key stakeholders the Pensions Green Paper proposals are intended to be implemented at the beginning of April 2006 the Pensions Green Paper proposals are intended to be implemented at the beginning of April 2006

25. The Fire Brigades Union Pensions Campaign 25 7. Conclusions The proposals will effect different Members in a variety of different ways. This will be dependent on the member’s: Age Age Length of Service Length of Service Duty System Worked Duty System Worked Role Role Health Health Family Circumstances Family Circumstances

26. The Fire Brigades Union Pensions Campaign 26 8. Is it Legal? Government Consultation Government Consultation Fire & Rescue Services Act 2004 Fire & Rescue Services Act 2004 No Protection for Accrued Rights Superannuation Act 1972 Superannuation Act 1972 No Protection for Accrued Rights Human Rights Act 1998: Human Rights Act 1998: “Peaceful Enjoyment of Property” Protection for Accrued Rights Prior to Changes Protection for Future Service Benefits? Protection for Future Service Benefits? Seeking QC’s Opinion

27. The Fire Brigades Union Pensions Campaign 27 9. What has been done so far? Firefighters’ Pensions Committee (FPC) established & chaired by the Office of the Deputy Prime Minister (ODPM) Firefighters’ Pensions Committee (FPC) established & chaired by the Office of the Deputy Prime Minister (ODPM) FBU Responses in Consultation Process FBU Responses in Consultation Process Lobbying Politicians Lobbying Politicians Press & Media Press & Media Campaign to inform Members of issues: Campaign to inform Members of issues: Firefighter Magazine Specials, Circulars, Regional Mass Meetings, Regular Reports through the Committee Structures, Press & Media

28. The Fire Brigades Union Pensions Campaign 28 10.What Can We Do Now? FBU Conference Policy FBU Conference Policy Members must decide: Members must decide: Accept or Fight? Keep up to Date with the Issues Keep up to Date with the Issues Ensure regular attendance at Branch Meeting, Read All Literature produced by the Union & watch the Press & Media coverage. Lobby your MP, both individually & collectively, as a Branch Lobby your MP, both individually & collectively, as a Branch Discuss & Debate with other members - Regularly Discuss & Debate with other members - Regularly

29. The Fire Brigades Union Pensions Campaign 29 Over 1 Million Public Sector Worker Affected Voted YES in Strike Ballots last year. The TUC is still campaigning at Government level Other Unions involved in LGPS talks GMB, TGWU, UNISON, NAPO, AMICUS, UCATT, CYWU Coordinated action is still a possibility. WE ARE NOT ALONE

30. The Fire Brigades Union Pensions Campaign 30 It’s your Pension It’s Your Future Financial Security It’s the Financial Security of your Families Fight To Keep It