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Fire Brigades Union

Fire Brigades Union. 2014 LGPS proposals. Background recap. Government endorses Hutton Proposes £900million savings Increase contributions Link with state pension age Career Average Revalued Earnings Change from RPI to CPI ‘Work Longer Pay More Get Less’. LGPS Negotiations.

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Fire Brigades Union

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  1. Fire Brigades Union 2014 LGPS proposals

  2. Background recap • Government endorses Hutton • Proposes £900million savings • Increase contributions • Link with state pension age • Career Average Revalued Earnings • Change from RPI to CPI • ‘Work Longer Pay More Get Less’

  3. LGPS Negotiations • Government recognise ‘funded schemes’ different • Separate negotiations – Unite, GMB, Unison • Early versions of HOA – agreed Dec ‘11 • FBU position: HOA unacceptable • No protection for lowest paid • NPA unworkable

  4. Talks continued • From January 2012 – 31 May no details released as talks continued • LGPS trade union side meetings cancelled • 31 May – first details released • Joint statement – LGA – 3 Unions • 2014 LGPS proposals • Consult with members report back to future TU side meeting

  5. 2014 proposal in brief • England and Wales only • Introduced one year earlier - 2014 • CARE scheme • No increases in contributions until 2014 • No NPA – individually linked to SPA • Protection • Options

  6. Summary of changes

  7. Summary of changes (cont.d)

  8. Summary of changes (cont.d)

  9. 2008 v 2014 Contributions

  10. What this means to me

  11. Changes to way contributions are calculated • LGPS contributions based on actual pensionable pay – inc. non contractual overtime and any additional hours (p/t) • Part – time workers will have contributions based upon actual pay not full time equivalent • e.g. previous proposal part time earning £13,395 pays 6.5% • Now £13,395 pays 5.5%

  12. 2014 Normal Pension Age • LGPS will have NPA based on individuals’ own SPA • SPA increasing to; • 66 between 2018 and 2020 • 67 between 2026 and 2028 (34-36) • 68 and beyond in line with future rises in life expectancy (44-46)

  13. Impact on LGPS 2014 members • Can still retire before from SPA ( from age 55) but with actuarial reductions applied

  14. Protection • Accrued rights protected • All pre 2014 pension will be • Final salary link • Accessible at current NPA • Rule of 85 protection remains

  15. CARE – revaluation and Accrual rate • Career Average Revaluated Earnings • Pension value for earnings each year • Revalued until retirement • Starting point AWE ~ CPI +2.25% and 60ths • Balancing act • 2014 LGPS CPI and 49ths • Professional advice

  16. CARE Vs Final Salary • CARE depends on revaluation rate being better than any rise in earnings and flat career • Rise in earnings better than RR or promoted Final Salary more rewarding • Assess whether pay will grow more than CPI over career • (FBU using 1st Actuarial for advice)

  17. Flexible options • 50/ 50 option available • Try to avoid opt outs on low paid • 50% contributions – 50% pension • Ancillary benefits same • Short term option

  18. Example of 50/50

  19. Transitional protection • Applies to members within 10 years of age 65 in 2012. • Individuals may see their NPA move due to changes in SPA • Protection – calculation done on retirement at age 65 so pension is at least equal to what they would have received under 2008 scheme

  20. Consultation TU’s involved consulting members before reporting back Unison, Unite & GMB joint statement with LGA Unison, Unite and GMB consultative ballot July – August FBU Consultation method meetings and consultative ballot

  21. Recap • LGPS 2014 changes instead of 2015 • CARE – revalued using CPI – 49th accrual • Same contributions for majority & based on actual earnings • NPA linked to SPA • Indexed using CPI • Option of 50/50 with same ancillary benefits • Protection – accrued and transitional • Outsourced individuals protected

  22. Executive Council 17 July • Noted the outcome of the LGPS negotiations. • Recognised some positive progress has been made. E.g contribution rates • Concerned at the proposed accrual rates and revaluation rates - seeking further professional advice • Opposed to any increase in NPA. Believe an NPA of 68 is unrealistic and unworkable for firefighters (control) . • Seek the support of colleagues in other unions to establish with the employers a working group to examine the specific occupational needs of FRS control staff and any other identified occupational groups with particular needs. • Continue to attempt to gain access for firefighters control into a fire service pension scheme

  23. Recommendations • Consultative ballot • 2 straight forward questions • Is the proposed 2014 LGPS acceptable ? Yes or No? EC recommend – No • Do you wish the FBU to continue trying to achieve access for firefighters control into a specific fire service pension scheme ? Yes or No • Attend meeting before responding

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