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Fire Brigades Union

Fire Brigades Union. Update on pension proposals. Where are we currently?. Facing massive attack on pensions. Two stage attack Stage 1 - Contribution increases April 2012 - 2014 Stage 2 - Closing down current schemes and Introducing new schemes April 2015. The FBU Campaign.

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Fire Brigades Union

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  1. Fire Brigades Union Update on pension proposals FBU – Pensions Update

  2. Where are we currently? • Facing massive attack on pensions. • Two stage attack • Stage 1 - Contribution increases April 2012 - 2014 • Stage 2 - Closing down current schemes and Introducing new schemes April 2015. FBU – Pensions Update

  3. The FBU Campaign • Hands off our pensions • Work Longer! Pay more! Get Less! • To borrow their phrase (all in it together). FBU – Pensions Update

  4. Stage 1 – Raising Contributions • Average 3% rise in employee contributions. • Phased over three years. • 2012-1.2%. • 2013-1.2%. • 2014-0.6%. FBU – Pensions Update

  5. What will this mean? FBU – Pensions Update • By 2014 firefighters will pay around 14% of their salary into pension scheme (11.5%. If NFPS) • Tiered contributions for higher roles meaning some officers see pension increase up to 17%. • Possible that there may be protection for the NFPS.

  6. Why the increase? • CLG have confirmed that this is a cash injection. • To raise around • £13.2 million in 2012. • £26.4 million in 2013. • £33 million in 2014. • Approximately £73million in total • To assist in government deficit reduction. • Note -(FBU is currently taking legal advice on this cash raising exercise to see if it’s legitimate). FBU – Pensions Update

  7. The issue of ‘opt outs’. • Office of Budgetary Responsibility (OBR) assumes 1% opt out when setting these cash targets • FBU say figure is far too low - • 1% opt out cost the scheme £3.5 million per year in lost contributions • 10% wipes out all cash raised-£35 million per year • 20% puts scheme into more deficit-£70 million per year. FBU – Pensions Update

  8. You Gov survey • Our reasons for using YouGov • They are independent • Their reputation cannot be challenged easily- • 18% of FBU members took part - 8000 members FBU – Pensions Update

  9. What does survey tell us? • Showed potentially 27% opt out rate. • What would this mean? • Cash injection exercise raises £73 million • 27% opt out means £283 million in lost contributions • Net loss of £210 million! • FBU has submitted response to CLG/ Fire Minister highlighting this issue. FBU – Pensions Update

  10. Stage 2 – 2015 FBU – Pensions Update • Close existing public sector schemes • Introduce new Pension Schemes based on a common framework • For us schemes will differ in several areas. • New retirement ages • Final salary replaced by career average schemes. • Unknown contribution rates • Unknown accrual rates

  11. New Retirement Ages • New retirement ages - linked to state pension age with one exemption – Uniformed Services. • New Normal Retirement Age (NRA) of 60 for all Uniformed Schemes • NFPS already has normal retirement age of 60 • FBU campaigning to reduce NFPS normal retirement age to 55. • FBU Opposing age 60 in both submissions to Hutton FBU – Pensions Update

  12. Career Average Re-valued Earnings (CARE) • Currently - Final salary (best of last three years). • Main driver in Hutton review • Hutton claims-final salary; • Unfairly rewarding higher earners. • Too expensive. • that CARE is fairest way of rewarding all. FBU – Pensions Update

  13. CARE-depending on two factors. • The revaluation factor used - Hutton suggests average wage increases • Accrual rate – No suggestion from Hutton • Current Accrual rates: 1/60ths or 2/60ths depends upon scheme • Early documents suggest new schemes from 2015 may use 65ths, 70ths or even 75ths • Using any of these everyone will be worse off. FBU – Pensions Update

  14. Who is Affected? • All of us in a Pension Scheme – FPS, NFPS, LGPS • And importantly eligible RDS members who planned to joined the Modified FPS • The new Modified FPS that came as a result of the FBU’s successful legal challenge to get RDS the recognition as ‘part time workers’ • This Modified Scheme will close in 2015 along with the other public sector pensions. • So therefore; • Eligible RDS members are affected in the same way as FPS members are affected • The Modified Firefighters Pension Scheme, that has FPS benefits, faces the same threats. • We cannot allow this to happen • We cannot allow the delays in implentation to continue FBU – Pensions Update

  15. Other Hutton recommendations • 27 in total-accepted in budget speech 23rd of March, some of which were: • Honour all past accrued pension • New schemes retain defined benefit status • Removal of accrual limits • Fixed cost ceiling-protection for taxpayer • Indexation changed • To recap – • Contributions increase April 2012 • All new schemes in by 2015. FBU – Pensions Update

  16. What are the FBU doing? • Raising objections with DCLG and ministers. • Gathering info / submitting evidenced arguments on all issues. • Responding to full Hutton document. • Gathering evidence to support claim that firefighters cannot routinely work beyond 55. • Working to prove cash raising schemes are not viable. • Using legal challenges where appropriate (RPI - CPI) • Lobbying MPs / CFOs / Elected Fire Authority members. • Using media. • Industrial Campaign – Model Resolution FBU – Pensions Update

  17. The FBU Campaign • Model Resolution - • DEFENDING SERVICES, JOBS, PAY AND PENSIONS • This Branch applauds the success of the TUC demonstration on March 26 against cuts and austerity. • We remain completely opposed to the huge cuts proposed for our Fire and Rescue Service and other public services as a result of the Comprehensive Spending Review in October 2010. For the Fire and Rescue Service this cuts agenda will mean fewer firefighters and will undermine our ability to respond as quickly and effectively to emergencies or to engage professionally in protection or prevention work. This will inevitably increase risks to the public and to Firefighters. In the case of the Fire Service: CUTS COST LIVES. • This branch condemns: • The national employers’ refusal to make a pay offer for 2010 or 2011 • The cuts to fire cover • Attacks on our shifts and conditions of services • The attacks on public sector pension schemes including those in the fire service FBU – Pensions Update

  18. FBU – Pensions Update • Model Resolution Cont’d • ATTACKS ON PENSIONS • We note that there are currently three attacks on our pensions: • The change to indexation of pensions by the use of CPI instead of RPI • The proposed increase in contribution rates from April 2012 which is simply a raid on our pension schemes to raise money to pay off government debt • The scrapping of all existing schemes by 2015 and their replacement by new imposed schemes based on: • Removal of the final salary basis of our pensions • Introducing new (worse) accrual rates • Increasing retirement ages in the LGPS and FPS • Refusing a reduction in the normal retirement age for members of the NFPS • Introducing new and as yet unspecified employee contribution rates • We support the decision by the Executive Council to mount a legal challenge against the change from RPI to CPI and its position to mount a legal challenge against any aspect of these attacks where our lawyers advise there is a reasonable prospect of success.

  19. Model Resolution Cont’d We commit to give financial and moral support to members of those unions who have already balloted to take industrial action starting with the coordinated strike on June 30. This branch notes that despite efforts by the FBU, by other unions and by the TUC to negotiate on these issues, government Ministers are intent on forcing changes through without agreement. This branch therefore supports: The decision of FBU conference to prepare for national strike action. A ballot for such action as soon as the Executive Council concludes this step is necessary. Steps to coordinate such industrial action with other unions where appropriate. FBU – Pensions Update

  20. What can you do? • Support the FBU’s Campaign • Write to YOUR MP • Write to YOUR Councillors • Attend YOUR Branch Meetings • Get YOURSELF active in the Campaign • Support other Unions’ Campaigns FBU – Pensions Update

  21. Who is doing what in the FRS? • What will FOA do? • - Nothing! • What will CFOA do? • - Nothing! • What will the RFU do? • - Nothing! • The FBU is the only organisation trying to stop this attack on your pensions • and that’s why we have to .... FBU – Pensions Update

  22. Stand up and fight! • We did not pick this fight. • We did not want this fight. • But we cannot allow them to just rob us of our pension rights. • The FBU will be defending your pensions-we need to be united. • Unity is strength. • SUPPORT THE MODEL RESOLUTION FBU – Pensions Update

  23. Fire Brigades Union Pensions Campaign 2011 Questions? FBU – Pensions Update

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