To consider Report CFO/020/21 of the Director of Finance, concerning how the Authority may wish to implement the Home Office ‘Immediate Detriment’ informal guidance and the risks faced by the Authority and the eligible FPS members by implementing this informal guidance in advance of having all the required information and systems in place.

Members considered report CFO/020/21 of the Director of Finance concerning how the Authority may wish to implement the Home Office ‘Immediate Detriment’ informal guidance.  The guidance proposes a methodology for removing the age discrimination suffered by some Firefighters who were members of the 1992 or 2006 Firefighter Pension Scheme (FPS) when the Government introduced public sector pension changes on 1 April 2015. 

The report outlines the risks faced by the Authority and the eligible FPS members by implementing this informal guidance in advance of having all the required information and systems in place.

Members were provided with some background to the FPS pension changes introduced in 2015 and the findings of the Employment tribunal that deemed the Government’s proposed transitional arrangements to be unlawful as they discriminated against some members based in their age. 

The Government’s proposal is to remove the age discrimination from all public pension changes, including the FPS and Local Government Pension Scheme arrangements. The Government’s proposal includes 2 parts:

·         the removal of the retrospective discrimination covering April 2015 – March 2022, known as the remedy period.  Eligible members would be able to choose to receive benefits from the legacy scheme or the 2015 scheme, but this will apply for the full remedy period; and

·         the removal of future discrimination by moving all members onto the reformed 2015 schemes from 1 April 2022.

Members were advised that a pension member who has been impacted by the retrospective discrimination, isn’t required to make a decision over which scheme they wish to opt into over the remedy period until they retire.  However to enable them to make the decision they require two benefit statements outlining what each option will mean to them in terms of pension benefits, retrospective employee contributions and tax implications.  The current view is that these statements will not be available until potentially October 2023.

Members were informed that the Home Office informal guidance would allow Fire and Rescue Authorities the ability to let eligible retiring firefighters have access to their legacy pension scheme immediately and in advance of the relevant Her Majesty’s Treasury (HMT) and Local Government Association (LGA) guidance, along with the Pension Administrator’s data and information systems being in place to produce accurate dual pension benefit statements.

Originally no Fire and Rescue Authority had intended to implement the Home Office informal guidance note on immediate detriment cases until the required guidance from the Home Office, HMT, and the LGA was available. The position of some Fire and Rescue Authorities has now changed and they are now implementing the Home Office informal guide for eligible firefighter retirements.

Members were advised that it is therefore right that the Authority now consider its position on the Home Office Immediate Detriment informal guidance note and were informed of some of the challenges the Authority would face in implementing the Home Office proposal.

Members were also advised that:

·         with the LGA now signing off the data template, that it would be used to collect the relevant pension information to produce dual benefits statements;

·         HMT are about to issue a policy statement on the tax issues surrounding the proposed remedy; and

·         there is currently a development of framework to standardise the approach towards implementing the Home Office Immediate Detriment proposal by the Local Government Association, Fire and Rescue Authorities and other interested parties. 

Members were told that the Scheme Manager will take a proposal for implementing the Home Office Immediate Detriment guidance notes to the next FPS Pension Board for scrutiny and sign-off.  The Scheme Manager would then work with the Authority’s FPS Pension Administrator and Payroll & Pensions team to implement the proposals as soon as possible.

Members resolved that:

a)    the report, be noted;

b)    the FPS’ Scheme Manager, be instructed, to continue to progress the proposals to enable the Authority to implement the HO Immediate Detriment guidance;

c)    the Scheme Manager, be instructed, to take the final proposals to the FPS Pension Board for review;

d)    the agreement to offer those members who have yet to lose their tapered protection the option to remain within their legacy scheme if they so choose, to be included within the proposals to the Pension Board; and

e)    that the Scheme Manager prepare a ‘waiver statement’ that any member who wished to take up the option to remain in their legacy scheme in advance of the required guidance(s) must sign to acknowledge they understand the risks involved.