Public Sector Pension Reform

Penny Mordaunt Excerpts

Monday 15th December 2014 Written Statements

[The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)]

Introduction

The Firefighters Pension Scheme Regulations 2015 were laid in Parliament on 28 October. Reforms to pension schemes are essential. People are living longer, with the average 60-year-old living 10 years longer now than they did in the 1970s. As a result, the cost of public service pensions has increased in real terms by around a third over the last 10 years and is now £32 billion a year.

The Firefighters’ Pension Scheme 2015 will remain among the very best pensions available, with guaranteed benefits that are inflation proofed. The coalition Government recognises that firefighters regularly undertake duties under tough conditions and that they deserve a good and generous pension. This is why, since the start of the reform process we have agreed to a number of enhancements.

The normal pension age of firefighters is 60, and has been since 2006. It is lower than the pension age for other public sector workers, reflecting the physical nature of the occupation. A normal pension age of 60 is being retained for firefighters in the 2015 Scheme.

Firefighter Fitness

The Department is acutely aware that firefighters have concerns over maintaining their fitness as they grow older. Fitness is, and will remain, the responsibility of individual fire and rescue authorities, the employers of individual firefighters. No changes to those requirements are being made with the 2015 Scheme. However, we consider that more work needs to be done to support firefighters in maintaining their fitness and there needs to be a stronger and clearer framework within which fire and rescue authorities make their decisions about fitness. This framework should be fair and transparent, and should provide strong reassurance for firefighters.

Consultation on Amending the National Framework for Fire and Rescue England

To that end, we announced on 28 October, at the same time as the regulations were laid, that we were also consulting on an amendment to the Fire and Rescue National Framework for England. The National Framework has a strong statutory basis. Under section 21 of the Fire and Rescue Services Act 2004, fire and rescue authorities must have regard to the Framework in exercising their functions. Section 22 of the Act also provides powers of intervention if the Secretary of State considers an authority is failing, or is likely to fail, to act in accordance with the Framework. Clearly, it is not a document which can be ignored, as the Fire Brigades Union has claimed.

The consultation concluded on 9 December, and we are keen to ensure that firefighters know as quickly as possible the outcome and our final decisions. Having reviewed all the consultation responses, we are pleased that the majority of fire and rescue authorities agree with the principles by which they would be expected to manage fitness and fitness-related issues in their authorities. We have built these clear principles around those agreed by the employers and the Union through the National Joint Council for Fire and Rescue Services, and adopted in Scotland.

Principles regarding Firefighter Fitness

These principles recognise that firefighting is a physically demanding occupation, and that firefighters need to have appropriate levels of fitness. To this end the National Framework will require all fire and rescue authorities to have a process of fitness assessment and development; ensure that no individual automatically faces dismissal if they fall below fitness standards and cannot be deployed operationally; provide all operational personnel with support to maintain their fitness for the duration of their career; and commit to providing a minimum of six months, development and support for firefighters if they fail a fitness test. It also requires that fire and rescue authorities ensure appropriate reference of firefighters to occupational health providers where necessary, and to identify reasonable adjustment or redeployment in role where it appears the medical condition does not allow a return to operational duties.

We have also included an additional requirement that, should a firefighter fail a fitness test through no fault of their own, the fire and rescue authority will consider suitable alternative employment, and if that is not possible, and the employee is at least aged 55, consider an authority-initiated retirement. It is important that fire and rescue authorities explore fully all options open to them, and ensure that their employees are treated with the fairness and dignity they deserve.

These principles, if implemented effectively through fire and rescue authorities in their fitness policies and procedures, will ensure that no firefighter faces a situation where they are forced to retire without access to a fair pension where they lose fitness through no fault of their own.

Independent Review of Operation of Principles

We have also committed to an independent review in due course to ensure that appropriate fitness standards, training, testing, monitoring and management policies and procedures are in place in each fire and rescue authority, which are in line with the principles set out in the Framework.

A Fair Pension

Additionally, through the improvements we have made to the 2015 scheme, any firefighter who chooses to retire early, between the ages of 55 and 60, will still have access to a pension that is actuarially fairly reduced, in line with both Lord Hutton’s and Dr Tony Williams’ recommendations. In the 2015 scheme, a firefighter retiring at 55 would see a 21.8% reduction to their pension (and no reduction to benefits earned in the 1992 scheme if the firefighter was a member of that scheme). This compares very favourably with the 40.5% reduction applied in the 2006 scheme.

There is absolutely no prospect, as the Fire Brigades Union has deliberately and misleadingly claimed throughout its dispute, of firefighters who lose fitness having “no job and no pension”.

We are today publishing an addendum to the National Framework and making the necessary statutory instrument to bring it into force.

Strong transitional protections

Because of the strong transitional protections built into the 2015 scheme, no firefighter will have to work beyond their current expected normal pension age until 2022. That provides a number of years for fire and rescue authorities and firefighters themselves to ensure that their approaches to fitness are developed to support firefighters working longer. In addition, there is a considerable amount of experience with regard to working with older firefighters, with over 1,000 firefighters already over 55 years of age in employment.

Fitness Working Group

To further support fire and rescue authorities in meeting their statutory requirements under the revised National Framework, we have set up, along with the Local Government Association and the Fire Brigades Union, a fitness group facilitated by the Chief Fire and Rescue Adviser, Peter Holland. This group will provide an important opportunity for employers, employees and Government to consider the issues around fitness in more depth, and identify good practice to address them. This process, linked with generous ill health arrangements and the opportunity for redeployment, supported by the principles in the Fire and Rescue National Framework for England, will ensure that firefighters continue to receive one of the best pension packages available.

Availability of National Framework Addendum

A copy of the addendum to the Fire and Rescue National Framework will be placed in the Library of the House and is also available on my Department’s website.