Consultation outcome

Firefighters' Pension Scheme retrospective remedy: equality impact assessment

Updated 10 August 2023

Name and outline of policy proposal, guidance or operational activity

Title: Firefighters’ Pensions retrospective remedy and Firefighters’ Pensions (Remediable Service) Regulations 2023.

Public consultation on firefighters’ pension scheme regulation changes to enact the second phase (‘retrospective’) of the remedy to the McCloud/Sargeant cases.

The second phase of the remedy is to make changes to the scheme regulations, in line with the Public Service Pensions & Judicial Offices Act 2022 (PSPJOA), to allow public service pension schemes to remedy the impact of unlawful age discrimination. That discrimination arose due to certain transitional arrangements put in place when public service pension schemes (including the firefighters’ schemes) were reformed between 2014 and 2016.The second phase of the remedy, the retrospective remedy, is to remedy the discrimination that had taken place between 1 April 2015 and 31 March 2022.

HM Treasury has conducted an equality impact assessment (EIA), which considers the impact of the overarching policy, powers and requirements associated with the PSPJOA. As set out in that assessment, in particular paragraph 1.8, that the assessment “does not cover secondary legislation made using powers in this Bill. Separate analysis to consider the impact of changes to scheme regulations (beyond those covered and/or directed by the measures in the Bill) will be produced when the powers to do so are exercised”.

Introduction

This EIA explains how we have given due consideration and complied with our equality duties under the Equality Act 2010 throughout the development of our policy proposals to make changes to the firefighters’ pension scheme regulations in line with the PSPJOA. The Home Office is required by the PSPJOA to introduce legislation and policies to implement the retrospective pension remedy in the firefighters’ pension schemes by the 1 October 2023 deadline.

Summary of the evidence considered in demonstrating due regard to the public sector equality duty

We have considered the report produced by the Government Actuary’s Department (GAD) on “Transitional Protection Remedy: Retrospective Remedy Phase Analysis to Support the Equalities Impact Assessment Firefighters’ Pension Schemes (England) – June 2023”. In producing that report, GAD considered evidence including the data provided by (or on behalf of) police forces to GAD for the 2016 actuarial valuation, as detailed in their report “Firefighters Pension Scheme (England) - Actuarial valuation as at 31 March 2016: Report on membership data” of 28 February 2019, and data from the fire and rescue workforce statistics^{[footnote 1]}.

Members eligible or ‘in scope’ for Transitional Protection Remedy and therefore eligible to choose between accruing legacy or reformed scheme benefits in the remedy period are those who were in service on or before 31 March 2012 and who were still in service on or after 1 April 2015. This includes members who are currently active, deferred or retired and those with a non-disqualifying break in service of no more than 5 years.

We have used the statistical data on the firefighters’ pension scheme membership collected by the GAD for the purposes of the 31 March 2016 actuarial valuation. From this, members who were eligible or ‘in scope’ for Transitional Protection Remedy were identified. This may mean certain eligible members may not be included in the analysis (e.g. those who left the Scheme or retired after 1 April 2015 and before 31 March 2016). Some members who joined the scheme in the period 1 April 2015 to 31 March 2016 will be included, but these members would only ever have access to the 2015 Scheme under the changes made to introduce the 2015 Firefighters’ Pension Scheme to new entrants from 1 April 2015.

We also used the data on the membership of the Scheme for the purposes of the 31 March 2020 actuarial valuation.

Consideration of the duty

The Public Sector Equality Duty (PSED) is set out in section 149 of the Equality Act 2010 and requires public authorities, in the exercise of their functions, to have due regard to the need to:

• eliminate unlawful discrimination, harassment and victimisation and other conduct prohibited by the 2010 Act

• advance equality of opportunity between people who share a protected characteristic and those who do not

• foster good relations between people who share a protected characteristic and those who do not

This involves having due regard to the need to:

• remove or minimise disadvantages suffered by people due to their protected characteristics

• take steps to meet the needs of people from protected groups where these are different from the needs of other people.

This EIA should be read alongside the Public Service Pensions: Firefighters’ Pensions (Amendment) Regulations 2023 consultation document.

The equality duty covers the 9 protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex (gender) and sexual orientation.

Having considered the analysis set out below, we are content that this policy is consistent with the PSED. Its whole purpose is to eliminate unlawful discrimination and foster good relations between younger and older members of the firefighters’ pension schemes who are eligible for remedy and, by giving all eligible members a choice, advances equality of opportunity for that cohort. The cohort is defined by having service in the remedy period and having been in a public service scheme on or before 31 March 2012^{[footnote 2]}. For the firefighters’ pension scheme, special provision has also been made in the PSPJOA to include those individuals who were in service on 31 March 2012 as a firefighter and having an entitlement to be a member of the legacy firefighters’ pension scheme.

Age

Background

The courts determined that the transitional protection element of the 2015 public service pension scheme reforms treated those members who were closest to retirement more favourably than younger members, and this amounted to direct age discrimination.

These changes are being made to satisfy the requirements of the Public Sector Pensions and Judicial Offices Act (PSPJOA) 2022. This is in order to remedy the unlawful age discrimination identified in the McCloud/Sargeant litigation.

Analysis

GAD provided the age profile of all active members in the Firefighters’ Pension Schemes (England) as of 31 March 2016, as well as the age profile of the active members eligible to choose between legacy and reformed scheme benefits in the remedy period, and those not.

The analysis identified that:

• most of the active scheme population is between ages 35 and 54 as of 31 March 2016 (c. 73%)
• most members eligible to choose between legacy and reformed scheme benefits in the remedy period are between ages 35 to 54 as of 31 March 2016 (c. 79%)
• most members not eligible to choose between legacy and reformed scheme benefits are between ages 25 to 39 as of 31 March 2016 (c. 53%)
• members eligible to choose between legacy and reformed scheme benefits are slightly older than the overall active membership; those not eligible to choose between legacy and reformed scheme benefits are generally younger than the overall active membership

Based on the age profile of the members eligible to choose benefits in the remedy period, the analysis identifies that:

• at ages 35 to 59, the majority of members eligible to be offered a choice of benefits in the remedy period have accrued benefits in the 1992 Scheme
• at ages 20 to 34, the majority of members eligible to be offered a choice of benefits in the remedy period, have accrued benefits in the 2006 Scheme (Standard)
• at a much older age range, at ages over 60, the majority of members eligible to be offered a choice of benefits in the remedy period have accrued benefits in the 2006 Scheme (Special)

Disability

There is no available data on these protected characteristics in relation to the membership of the firefighters’ pension schemes in England or the firefighter workforce.

Gender reassignment

There is no available data on these protected characteristics in relation to the membership of the firefighters’ pension schemes in England or the firefighter workforce.

Marriage and civil partnership

There is no available data on these protected characteristics in relation to the membership of the firefighters’ pension schemes in England or the firefighter workforce.

Pregnancy and maternity

There is no available data on these protected characteristics in relation to the membership of the firefighters’ pension schemes in England or the firefighter workforce.

Race

The proportion of firefighters who identified as being from an ethnic minority group has increased slightly between 2013 and 2016 by 0.1% (3.7% to 3.8%). The available data from 31 March 2022 shows that this is an increasing trend as the number of firefighters who identified as being from an ethnic minority group was 5%. This might suggest that members eligible to make a choice of legacy or reformed scheme benefits over the remedy period may be less likely to be from an ethnic minority group compared with those not eligible to make a choice. The information available is not detailed enough to analyse the characteristics of those members most likely to benefit from being offered a choice of benefits in the remedy period.

Information from the following sources were used to comment on the protected characteristics:

• Fire and rescue workforce and pensions statistics: England, April 2021 to March 2022 - GOV.UK (www.gov.uk)
• Fire and rescue workforce and pensions statistics: England April 2017 to March 2018 (publishing.service.gov.uk)
• Fire and rescue workforce and pensions statistics: England April 2016 to March 2017 second edition (publishing.service.gov.uk)

Religion or belief

There is no available data on these protected characteristics in relation to the membership of the firefighters’ pension schemes in England or the firefighter workforce.

Sex

The Equality Act 2010 lists ‘sex’ as a protected characteristic. Data for the membership of the firefighters’ pension schemes in England is also available by sex. However, it is important to note that sex and gender are 2 different concepts. A person’s gender identity is not always the same as the sex assigned to them at birth, and some people may not identify as having a gender or as non-binary. Gender reassignment is also a protected characteristic under the Equality Act 2010.

In determining that the transitional protection arrangements discriminated on the grounds of age, the courts also concluded that if older members in a scheme were more likely to be male, providing older members with preferential terms amounted to indirect sex discrimination.

The following table sets out the sex profile of all active members in the Firefighters’ Pension Schemes (England) as of 31 March 2016, as well as the sex profile of the active members eligible to choose between legacy and reformed scheme benefits, and those not:

	Active membership as of 31 March 2016	Active members as of 31 March 2016 eligible for remedy	Active members as of 31 March 2016 not eligible for remedy
Males	95%	96%	94%
Females	5%	4%	6%
Total	32,985	27,320	5,665

This analysis identifies that:

• the vast majority of active members are male, and so too are the majority of active members who are eligible/ineligible to choose between reformed and legacy scheme benefits over the remedy period

• the percentage of the members not eligible to choose between reformed and legacy scheme benefits over the remedy period who are female is slightly higher than the percentage of female members eligible to make this choice; this follows because more recent joiners are more likely to be female

The table below sets out the percentage of male and female members who are eligible, and have accrued benefits in each of the legacy schemes:

	Unprotected members	Tapered protected members	Protected members	Total
Males	94%	97%	99%	96%
Females	6%	3%	1%	4%
Total	15,846	5,262	6,212	27,320

This analysis identifies that:

• the percentage of members who are males is greatest amongst the protected members, and lowest for the unprotected members

• members who are eligible to choose between legacy and reformed scheme benefits in the remedy period are more likely to be male, compared to those not eligible

There is a higher proportion of male members who are eligible to choose between legacy and reformed scheme benefits in the remedy period in the 1992 Scheme and 2006 Scheme (Special) than in the overall eligible member population. There is also a higher proportion of male protected members than there is in the unprotected and tapered groups of members.

Sexual orientation

There is no available data on these protected characteristics in relation to the membership of the firefighters’ pension schemes in England or the firefighter workforce.

Summary of foreseeable impacts of policy proposal, guidance or operational activity on people who share protected characteristics

Protected characteristic group	Potential for positive or negative impact?	Explanation	Action to address negative impact
Age	Yes	This policy is about giving a choice to members to resolve issues that arose from a case where part of the firefighters’ pension scheme (along with all other public service pension schemes) were found to be discriminatory on the grounds of age. It has a positive impact for members as it is giving them the choice that remedies the discrimination. It is likely that more younger members will see a financial benefit than older members (compared to not having the choice) as the legacy scheme is typically more valuable. This is a positive impact that arises due to the need to rectify discrimination.
Disability	Yes	This policy is about giving a choice to members to resolve issues that arose from a case where part of the firefighters’ pension scheme (along with all other public service pension schemes) was found to be discriminatory on the grounds of age. As part of that, those who were ill-health retired (or assessed for ill-health retirement but did not meet the eligibility criteria) during the remedy period will get a choice of ill-health benefits, as appropriate. This will ensure that member’s choice reflects what would have been available had the alternative scheme applied at the point of ill-health retirement. This is a positive impact that arises due to the need to rectify discrimination.
Gender reassignment	None
Marriage and civil partnership	None
Pregnancy and maternity	None
Race	Yes	This policy is about giving a choice to members to resolve issues that arose from a case where part of the firefighter’s pension scheme (along with all other public service pension schemes) was found to be discriminatory on the grounds of age. While the analysis of scheme data shows that younger members are more likely to identify themselves as being from an ethnic minority, it does not show that there is likely to be a difference of treatment compared to someone not identifying as from an ethnic minority but who is the same age and has had the same career.
Religion or Belief	None
Sex	Yes	This policy is about giving a choice to members to resolve issues that arose from a case where part of the firefighters’ pension scheme (along with all other public service pension schemes) was found to be discriminatory on the grounds of age. While the analysis of scheme data shows that younger members are more likely to be female, it does not show that there is likely to be a difference of treatment compared to someone who is male but who is the same age and has had the analogous career.
Sexual orientation	None

In light of the overall policy objective, are there any ways to avoid or mitigate any of the negative impacts that you have identified above?

As this policy is about remedying a previous age discrimination, the identified impacts are positive. Other than age, we have not been able to identify any differences of treatment between members who are the same but for one of the protected characteristics.

SCS sign off:

Name/title: Peter Spreadbury

Directorate/unit: Police Workforce and Professionalism

Lead contact: Anthony Mooney

Date: 12 July 2023

For monitoring purposes all completed EIA documents and updated EIAs must be sent to the PSED@homeoffice.gov.uk

Date sent to PSED Team: 12 July 2023

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1. Fire and rescue workforce and pensions statistics: England April 2016 to March 2017 second edition (publishing.service.gov.uk); Fire and rescue workforce and pensions statistics: England April 2017 to March 2018 (publishing.service.gov.uk); Fire and rescue workforce and pensions statistics: England, April 2021 to March 2022 - GOV.UK (www.gov.uk) ↩

2. Without a break in service greater than 5 years that means the member’s service prior to 1 April 2012 and post 31 March 2015 is disjointed. ↩