The Fire Brigades Union

Report
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
The FBU Campaign
• Hands off our pensions
• Work Longer! Pay more! Get Less!
• To borrow their phrase (all in it together).
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
Why the increase?
• 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).
FBU – Pensions Update
The issue of ‘opt outs’.
• 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.
FBU – Pensions Update
You Gov survey
Our reasons for using YouGov
• They are independent
• Their reputation cannot be challenged
easily• 18% of FBU members took part - 8000
members
FBU – Pensions Update
What does survey tell us?
•
•
•
•
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.
FBU – Pensions Update
Stage 2 – 2015
• 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
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
Career Average Re-valued Earnings
(CARE)
• 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.
FBU – Pensions Update
CARE-depending on two factors.
1
The revaluation factor used - Hutton suggests
average wage increases
Accrual rate – No suggestion from Hutton
2
–
–
•
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.
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 affected
The 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
Other Hutton recommendations
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.
FBU – Pensions Update
What are the FBU doing?
• 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
FBU – Pensions Update
The FBU Campaign
Model Resolution DEFENDING SERVICES, JOBS, PAY AND PENSIONS
This 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’d
ATTACKS 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’d
We 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
What can you do?
•
•
•
•
•
•
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
FBU – Pensions Update
Who is doing what in the FRS?
• 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 ....
FBU – Pensions Update
Stand up and fight!
• 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
FBU – Pensions Update
Fire Brigades Union
Pensions Campaign 2011
Questions?
FBU – Pensions Update

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