FBU – Pensions Update

Fire Brigades Union

Update on pension

proposals

FBU – Pensions Update

Where are we currently?

• Facing massive attack on pensions.• Two stage attack • Stage 1 - Contribution increases April

2012 - 2014• Stage 2 - Closing down current schemes

and Introducing new schemes April 2015.

FBU – Pensions Update

• Hands off our pensions

• Work Longer! Pay more! Get Less!

• To borrow their phrase (all in it together).

The FBU Campaign

FBU – Pensions Update

Stage 1 – Raising Contributions

• Average 3% rise in employee contributions.

• Phased over three years.• 2012-1.2%.• 2013-1.2%.• 2014-0.6%.

FBU – Pensions Update

What will this mean?• By 2014 firefighters will pay around 14% of their

salary into pension scheme (11.5%. If NFPS) • Tiered contributions for higher roles meaning

some officers see pension increase up to 17%.

• Possible that there may be protection for the NFPS.

FBU – Pensions Update

• CLG have confirmed that this is a cash injection.• To raise around

– £13.2 million in 2012.– £26.4 million in 2013.– £33 million in 2014.

• Approximately £73million in total• To assist in government deficit reduction.• Note -(FBU is currently taking legal advice on this cash

raising exercise to see if it’s legitimate).

Why the increase?

FBU – Pensions Update

• Office of Budgetary Responsibility (OBR) assumes 1% opt out when setting these cash targets

FBU say figure is far too low - • 1% opt out cost the scheme £3.5 million per year

in lost contributions• 10% wipes out all cash raised-£35 million per

year • 20% puts scheme into more deficit-£70 million

per year.

The issue of ‘opt outs’.

FBU – Pensions Update

Our reasons for using YouGov• They are independent• Their reputation cannot be challenged

easily-• 18% of FBU members took part - 8000

members

You Gov survey

FBU – Pensions Update

• Showed potentially 27% opt out rate.• What would this mean?• Cash injection exercise raises £73 million• 27% opt out means £283 million in lost

contributions • Net loss of £210 million!• FBU has submitted response to CLG/ Fire

Minister highlighting this issue.

What does survey tell us?

FBU – Pensions Update

• Close existing public sector schemes• Introduce new Pension Schemes based on a common

framework

For us schemes will differ in several areas.– New retirement ages – Final salary replaced by career average schemes.– Unknown contribution rates– Unknown accrual rates

Stage 2 – 2015

FBU – Pensions Update

New Retirement Ages• New retirement ages - linked to state pension

age with one exemption – Uniformed Services.• New Normal Retirement Age (NRA) of 60 for all

Uniformed Schemes• NFPS already has normal retirement age of 60• FBU campaigning to reduce NFPS normal

retirement age to 55.• FBU Opposing age 60 in both submissions to

Hutton

FBU – Pensions Update

• Currently - Final salary (best of last three years).

• Main driver in Hutton review • Hutton claims-final salary;

– Unfairly rewarding higher earners.– Too expensive.

• that CARE is fairest way of rewarding all.

Career Average Re-valued Earnings (CARE)

FBU – Pensions Update

1 The revaluation factor used - Hutton suggests average wage increases

2 Accrual rate – No suggestion from Hutton– Current Accrual rates: 1/60ths or 2/60ths depends

upon scheme– Early documents suggest new schemes from 2015

may use 65ths, 70ths or even 75ths • Using any of these everyone will be worse off.

CARE-depending on two factors.

FBU – Pensions Update

Who is Affected?• All of us in a Pension Scheme – FPS, NFPS, LGPS And importantly eligible RDS members who planned to joined the

Modified FPS• The new Modified FPS that came as a result of the FBU’s

successful legal challenge to get RDS the recognition as ‘part time workers’

• This Modified Scheme will close in 2015 along with the other public sector pensions.

So therefore; • Eligible RDS members are affected in the same way as FPS

members are affectedThe Modified Firefighters Pension Scheme, that has FPS benefits,

faces the same threats.We cannot allow this to happen We cannot allow the delays in implentation to continue

FBU – Pensions Update

27 in total-accepted in budget speech 23rd of March, some of which were:

• Honour all past accrued pension• New schemes retain defined benefit status• Removal of accrual limits • Fixed cost ceiling-protection for taxpayer • Indexation changed To recap – • Contributions increase April 2012• All new schemes in by 2015.

Other Hutton recommendations

FBU – Pensions Update

• Raising objections with DCLG and ministers.• Gathering info / submitting evidenced arguments on all

issues.• Responding to full Hutton document.• Gathering evidence to support claim that firefighters

cannot routinely work beyond 55.• Working to prove cash raising schemes are not viable.• Using legal challenges where appropriate (RPI - CPI)• Lobbying MPs / CFOs / Elected Fire Authority members.• Using media.• Industrial Campaign – Model Resolution

What are the FBU doing?

FBU – Pensions Update

The FBU CampaignModel Resolution - DEFENDING SERVICES, JOBS, PAY AND PENSIONSThis Branch applauds the success of the TUC demonstration on March 26 against cuts

and austerity.We remain completely opposed to the huge cuts proposed for our Fire and Rescue

Service and other public services as a result of the Comprehensive Spending Review in October 2010. For the Fire and Rescue Service this cuts agenda will mean fewer firefighters and will undermine our ability to respond as quickly and effectively to emergencies or to engage professionally in protection or prevention work. This will inevitably increase risks to the public and to Firefighters. In the case of the Fire Service: CUTS COST LIVES.

This branch condemns: • The national employers’ refusal to make a pay offer for 2010 or 2011• The cuts to fire cover• Attacks on our shifts and conditions of services• The attacks on public sector pension schemes including those in the fire service 

FBU – Pensions Update

Model Resolution Cont’dATTACKS ON PENSIONS

• We note that there are currently three attacks on our pensions:• The change to indexation of pensions by the use of CPI instead of RPI• The proposed increase in contribution rates from April 2012 which is simply a raid on

our pension schemes to raise money to pay off government debt• The scrapping of all existing schemes by 2015 and their replacement by new

imposed schemes based on:– Removal of the final salary basis of our pensions– Introducing new (worse) accrual rates– Increasing retirement ages in the LGPS and FPS– Refusing a reduction in the normal retirement age for members of the NFPS– Introducing new and as yet unspecified employee contribution rates

• We support the decision by the Executive Council to mount a legal challenge against the change from RPI to CPI and its position to mount a legal challenge against any aspect of these attacks where our lawyers advise there is a reasonable prospect of success.

FBU – Pensions Update

Model Resolution Cont’dWe commit to give financial and moral support to members of those

unions who have already balloted to take industrial action starting with the coordinated strike on June 30.

This branch notes that despite efforts by the FBU, by other unions and by the TUC to negotiate on these issues, government Ministers are intent on forcing changes through without agreement.

This branch therefore supports:• The decision of FBU conference to prepare for national strike

action.• A ballot for such action as soon as the Executive Council

concludes this step is necessary. • Steps to coordinate such industrial action with other unions

where appropriate.

FBU – Pensions Update

• Support the FBU’s Campaign• Write to YOUR MP• Write to YOUR Councillors• Attend YOUR Branch Meetings• Get YOURSELF active in the Campaign• Support other Unions’ Campaigns

What can you do?

FBU – Pensions Update

• What will FOA do? - Nothing!• What will CFOA do? - Nothing!• What will the RFU do? - Nothing!The FBU is the only organisation trying to stop this

attack on your pensions and that’s why we have to ....

Who is doing what in the FRS?

FBU – Pensions Update

• We did not pick this fight. • We did not want this fight. • But we cannot allow them to just rob us of our

pension rights.• The FBU will be defending your pensions-we

need to be united.• Unity is strength. • SUPPORT THE MODEL RESOLUTION

Stand up and fight!

FBU – Pensions Update

Pensions Campaign 2011

Questions?

Fire Brigades Union