Agenda item

Report by the Chief Fire Officer (RC7).

On 7 June 2013, DCLG published their response to the consultation 'Amendments to the Firefighters’ Pension Scheme (1992) and New Firefighters’ Pension Scheme (2006): summary of responses'. On the same day, the resulting Amendment Orders, which made changes to both the 1992 FPS and the 2006 NFPS, were laid before Parliament and enacted on 1 July 2013. The amendments include three discretions which require an OCC policy/position statement to be agreed and communicated to all FRS staff.

The Committee is RECOMMENDED that:

(a)              the discretion to Permit the Maximum Payment be adopted, but individual proposals be examined on a case by case basis depending on the needs of the Service and agreed by the Chief Fire Officer on advice from the Chief Finance Officer and the Head of Human Resources;

(b)              abatement will apply in all cases of reemployment of members of the 1992 and 2006 schemes with any Fire & Rescue Authority in any capacity or is employed by any employing public sector organisation without going through an open competition;

(c)               the Fire Authority determines that all of the salary benefits listed are treated as pensionable benefits and attract an Additional Pension Benefit as detailed in the FPS 1992 and the NFPS 2006.

The Committee had before them a report (RC7) which set out Oxfordshire County Council’s policy/position statement following the DCLG response to the ‘Amendments to the Firefighters’ Pension Scheme (1992) and New Firefighters’ Pension Scheme (2006): summary of responses.

Simon Furlong, in introducing the report, outlined the three discretions which needed to be agreed upon and then communicated to all FRS staff.

The first discretions was that employers now had the discretion to permit those 1992 scheme members who retired aged over 50 but under 55 with less than 30 years’ pensionable service to raise the commutation limit from the current limit of 2.5 times the accrued pension so that they could commute up to the maximum of a quarter of their annual pension for a lump sum on their retirement. Under the new provision, the employer must fully consider the economical, effective and efficient management of their functions and the costs likely to be incurred in each case as should authorities wish to exercise this discretion and raise the commutation limit, they (as the employer) were liable to pay the increased lump sum costs associated.

The amendment to the 1992 scheme widens the employer’s discretion to abate a pension paid to a member who is re-employed by a fire and rescue authority. It would also require the employer to pay into the pension fund the amount of paid pension that could have been subject to abatement. The requirement for the employer to be liable for the costs where they do not exercise the discretion to abate a member’s pension would apply to both the 1992 and 2006 schemes. This would only apply to the 1992 scheme to new instances of re-employment since 25 September 2009. The New Firefighters’  Pension Scheme 2006 already provides for this discretion.

The amendment order provided Employers with the discretion to determine whether the following allowances were pensionable. The allowances were:

(i)     any allowance or supplement to reward additional skills and responsibilities that are applied and maintained outside the requirements of the firefighter’s duties under the contract of employment but are within the wider functions of the job;

(ii)   the amount (if any) paid in respect of a firefighter’s continual professional development;

(iii)  the difference between the firefighter’s basic pay in their day to day role and any pay received whilst on temporary promotion or where he is temporarily required to undertake the duties of a higher role;

(iv)  any performance related payment which is not consolidated into his standard pay.

Some additional skills allowances and short periods of temporary promotion were not currently treated as pensionable and officers were currently seeking guidance from the OCC legal team following recent high court judgements and Queen’s Council advice to other fire authorities.

Under the new provision the Authority may exercise their discretion as to whether they continue to be/or are treated as pensionable benefits. Any pensionable benefits for any payments commencing on or after 1 July 2013 falling within these categories would be treated as an additional pension benefit (APB) and would not contribute to the final salary calculation on the pension scheme.

The Committee expressed concern that there was no member involvement in the discretion to Permit the Maximum Payment.  Sue Corrigan confirmed that this decision could go to the Pensions Benefits Sub-Committee along with other pensions issues.  Accordingly, it was agreed to change recommendation (a) to reflect this.

RESOLVED: that:

(a)               the discretion to Permit the Maximum Payment be adopted, but individual proposals be examined on a case by case basis depending on the needs of the Service and agreed by the Chief Fire Officer  Pension Benefits Sub-Committee on advice from the Chief Fire Officer,  Chief Finance Officer and the Head of Human Resources;

(b)               abatement will apply in all cases of reemployment of members of the 1992 and 2006 schemes with any Fire & Rescue Authority in any capacity or is employed by any employing public sector organisation without going through an open competition;

(a)               the Fire Authority determines that all of the salary benefits listed are treated as pensionable benefits and attract an Additional Pension Benefit as detailed in the FPS 1992 and the NFPS 2006.