Pensions: urgent matters of concern arising from the budget (video)

The Fire Brigades Union have released another video for members on the pensions campaign.

In the clip, Matt Wrack, general secretary, talks about recent developments and the next steps for the union.

Matt has also written to all FBU members on pensions. You can read the circular down here.

31 March 2014

TO: ALL MEMBERS

Dear Brother/Sister

Pensions: urgent matters of concern arising from the Budget

FBU officials from across the union attended a meeting in London last week. They heard reports on a range of issues, including the most current developments relating to pensions.

As always, the full details of these discussions will be reported back through Brigade Committees and to Branches. Branches are asked to ensure meetings are arranged for this purpose. You will also be aware that certain aspects of our pension campaign are confidential to FBU members and are therefore best reported verbally rather than through circular.

Negotiations and impact of the Budget
FBU negotiators have been discussing several key issues with Government officials from England (DCLG) with a view to obtaining a revised set of proposals. Any such proposals would be considered by the Executive Council and subsequently by members.

Unfortunately, the Chancellor’s budget statement of 19 March contained a proposal that may significantly alter the grounds for our discussions. The budget statement included reference to a consultation process relating to the tax law covering pensions. You may have seen references in the press to relaxation of rules covering private pensions. However, these proposals also include reference to the tax regime covering all pensions, including Fire Service pensions.

This consultation document can be viewed on the government website:

https://www.gov.uk/government/consultations/freedom-and-choice-in-pensions

While the primary focus within this document is about altering rules relating to private pensions there are also proposals to alter the minimum age at which a pension can be taken without significant tax liabilities. The proposal is to increase this from 55 to 57. Having sought further clarification from DCLG officials and having taken legal advice, we can confirm that it does have the potential to affect Fire Service pension schemes in the future. The consultation ‘Freedom and choice in pensions’ is due to close on 11 June 2014.

The proposals could be very significant for Fire Service pensions. It is important to note that if implemented they would mean that the benefits from the 1992 scheme would remain unaffected. However, they would have an impact on the 2006 scheme, the LGPS and the proposed 2015 scheme. There is therefore a significant potential impact on a range of issues we have been trying to discuss.

Essentially, the proposals (if agreed) would mean that post-2028 anyone retiring at age 55 or 56 from a scheme with a Normal Pension Age above 57 would have to pay a tax levy (currently 55%) on any benefits. This would be in addition to any actuarial reduction applied by the pension scheme itself.

Clearly, this could impact on current negotiations which have included discussions around flexible retirement from age 55. The current proposals in Scotland also include flexible retirement options from 55. If this tax proposal comes into force it would nullify any benefit of retiring earlier than 57 and would therefore undermine several important areas of ongoing discussion.

The FBU has already pressed the English (DCLG) Fire Minister on this issue and have been offered the opportunity to meet representatives of HM Treasury to examine the full impact of these suggestions.

The FBU Executive Council has stressed that the timescale for any clarification is very tight and is aware that the negotiations could be completely derailed at this stage. The meeting with HM Treasury has been scheduled for 8 April and the Executive Council will then assess the situation at its meeting arranged for 9 and 10 April.

Other issues
Discussions have also been held with the National Employers in relation to the No Job No Pension element of our dispute. The Employers have agreed a process to ensure mechanisms relating to fitness. Unfortunately despite several suggested options from the FBU neither Government nor the Employers have currently given a firm guarantee that those firefighters who are unable to maintain operational fitness will not face dismissal on grounds of capability. This is still a key concern for the union and remains unaddressed at this stage.

Officials attending the meeting in London were also informed of the various legal aspects to the attacks on pensions and the advice that the union has taken or is taking. Legal advice will not normally be distributed by circular but members will need to be aware that a range of issues have been discussed with our legal advisors and this continues. Where appropriate, specialist legal advice is sought. Officials attending the meeting were provided with some detail of the issues under discussion.

Branch meetings and briefing meetings
The campaign on pensions has been long and difficult in view of the decisions of the Coalition Government to attack pensions in the public sector in this way. Nevertheless, our arguments have never been answered. The evidence we have submitted has never been addressed adequately. The injustice of taking away pensions promised for many years has not been removed and therefore our campaign carries on.

The union has always been clear that all avenues of challenge would be used – legal, political and industrial. This remains the case and officials from all parts of the UK took our concerns to Westminster last week. Members at local level are asked to continue to do the same with MPs, MSPs and AMs. We are aware that the lobbying you have already undertaken has been extremely important.

You will note the seriousness of all the developments set out above relating to the Budget and other matters. Members will understand the need for the union to obtain clarity about all of these issues before we assess the situation and take any further steps. It is important that all members are well informed and that Branches meet to discuss all options to take our campaign forward.

Best wishes.

Yours fraternally

MATT WRACK
GENERAL SECRETARY

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