People are now 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 average firefighter retiring at age 50 today is expected to live and draw a pension for 37 years in retirement after a career of 30 years. Lord Hutton, in his independent report, found that the Firefighters’ Pension Scheme 1992 is the most expensive public service scheme and it is forecast to have a cash flow deficit of nearly £600 million by 2018 to 2019. Taxpayers cannot be expected to meet all of these costs.
From December 2011, a number of proposals for reform were discussed between the department, employers and the firefighter representative bodies. Over a year after the government published its preferred scheme design in May 2012, the Fire Brigades Union balloted its members for strike action.
Since that period there have been further talks to try to resolve the dispute, and 3 consultations covering the pension regulations. We have listened to the responses made to these consultations and refined the scheme design to address points made by firefighters.
Today (28 October 2014), the government will lay regulations setting out the terms of the reformed firefighters’ pension scheme before Parliament and these will incorporate the changes that we have agreed to the scheme design. Laying the regulations now
gives fire and rescue authorities time to implement the changes before they come into effect in April 2015.
We are also consulting on an amendment to the Fire and Rescue National Framework for England to ensure that no firefighter aged 55 or over will face a risk of being left without a job or a good pension.
Our proposals underpin the fitness and capability processes that exist within individual fire and rescue authorities and complement the work being undertaken by a fitness group chaired 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 suggest practical action to address them.
These steps will benefit all firefighters, not least women firefighters, and those who will work beyond 55 if they so wish. As the impact of working beyond 55 years of age will only take start to take effect in 2022, there is time to ensure appropriate procedures are in place to reassure and support both the younger and older worker.
This process, linked with generous ill-health arrangements and the opportunity for redeployment, should ensure that firefighters can continue to receive one of the best pension packages of any worker.
A third of all firefighters are already members of the New Firefighters’ Pension Scheme 2006, which has a normal pension age of 60. The 2015 scheme maintains a normal pension age of 60 as recommended by Lord Hutton and incorporated into the Public Service Pensions Act 2013. Firefighters are the only workforce that will not see an increase in their open scheme’s normal pension age as part of the reforms.