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North East MP asks HoC question of Fire Minister

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North East MP, Dave Anderson continues support for Firefighters pension campaign.

Dave Anderson, MP for Blaydon has asked a parliamentary question directed to the Fire Minister Penny Mourdant following some of her statements in the House of Commons debate on fire service pensions held on the 15th December 2014.

Mr David Anderson (Blaydon): To ask the Secretary of State for Communities and Local Government, pursuant to the contribution of the Parliamentary Under-Secretary of State for Communities and Local Government of 15 December 2014, Official Report, columns 1148-56, if the Minister will meet with the Fire Brigades Union and fire authority employers, together with their respective legal representatives, to discuss how commitments that she gave in that debate on fire service pensions will be implemented in practice; and if he will make a statement.
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Fire Minister's response wrong, flawed and misleading!!!

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TO:    ALL MEMBERS

Dear Brother/Sister

Pensions: Why the DCLG Minister is wrong about early retirement factors

In the recent letter from DCLG Fire Minister Penny Mordaunt to Firefighters in England (18 December 2014), the Minister criticises the active early retirement factor method we have been suggesting should be utilised for firefighters retiring at age 55 instead of the much more punitive one currently being adopted by DCLG. This circular sets out why her comments are flawed and misleading.

The Minister also raised this point in the Parliamentary debate on 15 December.

In her letter to firefighters, the Minister wrote:

Active factors

In short, active factors do not guarantee an early retirement reduction of 9% or 12% at age 55 as many, including the Opposition, have claimed. We took extensive actuarial advice on this specific issue as part of our deliberations on the final scheme design. What we found was that while active factors may look presentationally attractive, they actually provide a very uncertain and volatile early retirement factor. This is because active factors will be very sensitive to short-term changes in inflation and earnings growth.

We asked the Government Actuary’s Department to calculate a factor using a real world scenario. They calculated that using the actual earnings and inflation figures between September 2008 and September 2012 to set the factors would result in an early retirement reduction of about 27% at age 55 under active factors. This compares with the early retirement reduction of 21.8% under the 2015 scheme regulations - almost half of what the 2006 scheme introduced at over 40%. So under active factors, firefighters would be guaranteed to earn less pension for every year they were a member of the scheme but they would have no certainty about the actual factor that would be in force when they wished to retire. This, alongside the worse ill-health pension that active factors provide and penalising those firefighters who choose to work longer, led me to conclude that active factors would not provide the best deal for firefighters.

We have written to her and explained why this paragraph is misleading and wrong. 

First of all the active early retirement reduction calculations, in England, Wales and Scotland have been confirmed by the Government Actuary’s Department. The 12.8% figure was initially suggested in discussions that took place in January 2014 and confirmed (by GAD) as being affordable in March 2014. The 9% figure, however, was suggested entirely by GAD as part of its ongoing work in Scotland and Wales. The FBU and the opposition have only used figures that GAD - on behalf of Government - have authorised and accepted.

The Minister’s suggestion that under recent circumstances ‘actives’ would produce a reduction of 27% while the DCLG proposal would produce a reduction of 21.8%  is misleading. It is based on altering the assumptions for one method but not for the other – clearly an incorrect approach.

  • DCLG have calculated their early retirement factor using long-term assumptions for CPI - which is 2%. However, for active early retirement factors, instead of using the long-term assumption for salary growth which is used to cost the scheme (of CPI + 2.25% = 4.25%) they have used the current CPI assumption (1%).
  • Instead of comparing like for like they have altered the assumptions for just one of the two alternative methods to make their preferred option look better. This is an illogical and inconsistent way of comparing the two methods.
  • If both comparisons used the current short-term CPI assumption of 1% the DCLG proposal would also be at around 27% instead of the 21.8% they suggest.
  • All GAD assumptions use the long-term assumptions to calculate the ERFs, whether they are calculating "active" ERFs or "deferred" ERFs. (The long-term assumption is that salaries increase at CPI plus 2.25% a year.) It is these long-term assumptions that were used to calculate the cost of the scheme. 
  • It is misleading to suggest that only “active" ERFs will be sensitive to short-term changes in inflation and earnings growth. 

In reality if an ERF of 9% (or 12%) at age 55 was introduced, then the DCLG Minister’s statement that "...under active factors, firefighters would be guaranteed to earn less pension for every year that they were a member of the scheme ...” is misleading because in every case apart from someone working until age 60 a firefighter would be better off using active early retirement factors.

The comparison charts below demonstrate these points.

In each table the DCLG proposal (deferred factors with reduction of 21.8% with a better accrual rate) is compared to the proposal contained in the recent consultation document from Wales (active factors with reduction of 9% but a worse accrual rate).

Table 1 assumes Average Weekly Earnings is CPI + 2.25%

Age at retirement

DCLG proposal

 Wales proposal

Accrual Rate

1/59.7th

1/61.4th

Reduction

21.8%

9.0%

55

£16,188

£18,316

56

£17,607

£19,351

57

£19,115

£20,420

58

£20,783

£21,525

59

£22,599

£22,666

60

£24,522

£23,843

Table 2 assumes Average Weekly Earnings is RPI (CPI + 1%)

Age at retirement

DCLG proposal

Wales proposal

Accrual Rate

1/59.7th

1/61.4th

Reduction

21.8%

9.0%

55

£13,059

£14,775

56

£14,110

£15,507

57

£15,216

£16,255

58

£16,434

£17,021

59

£17,751

£17,803

60

£19,132

£18,603

Table 3 assumes Average Weekly Earnings is CPI

Age at retirement

DCLG proposal

Wales proposal

Accrual Rate

1/59.7th

1/61.4th

Reduction at 55

21.8%

9.0%

55

£11,099

£12,558

56

£11,935

£13,117

57

£12,810

£13,685

58

£13,771

£14,262

59

£14,804

£14,848

60

£15,882

£15,442

It is clear from all the charts that irrespective of whether average weekly earnings raise in line with CPI + 2.25%, with RPI or with CPI, firefighters who retire at ages 55, 56, 57, 58 or 59 using the Wales proposal would be better off using the active early retirement factors. (Because of a slightly worse accrual rate in the Scottish proposal (1/61.6th compared to 1/61.4th in Wales) firefighters who retire at ages 55, 56, 57 or 58 would be better off using the active early retirement factors).

The FBU has already written to the DCLG Fire Minister outlining our concerns with her comments on this issue. We have asked to meet her to discuss this as soon as possible.

Best wishes.

Yours fraternally

MATT WRACK

General Secretary

Last Updated on Tuesday, 20 January 2015 12:30
 

Letter to Fire Authority Chairs

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LETTERS TO FRA CHAIRS IN ENGLAND AND WALES – URGENT REQUEST FOR CLARITY REGARDING FIREFIGHTER PENSIONS

I have this week written to all Fire Authority Chairs in England and Wales asking them for clarity in relation to firefighter pensions. This followed the House of Commons debate that took place on 15 December 2014 in which DCLG Fire Minister, Penny Mordaunt gave a clear guarantee that should a firefighter fail a fitness test through no fault of his or her own, the Fire Authority should consider suitable alternative employment, and if that is not possible and the employee is at least age 55, commence an Authority-initiated retirement and pay an unreduced pension. This was also confirmed by the Minister to me in writing shortly afterwards.

In addition the Secretary of State, Eric Pickles, confirmed to the Communities and Local Government Committee on 16 December 2014 that that a decision had been made as a result of the debate and vote in Parliament and that this decision was that a firefighter in the circumstances described “will get a full pension”.

The task at hand is to clarify if the guarantee given by the DCLG Fire Minister and the Secretary of State is going to be implemented in Fire Authorities, which is where the decision will be taken.

My letter to FRA Chairs asks a simple question in relation to this guarantee.

A covering note is also being prepared to MPs which will include this letter. It is extremely important that MPs are included in this process because there is no doubt that a number of them were convinced to vote with the Government in the debate as a result of the promise of a guarantee on No Job No Pension.

Head Office has also prepared a model letter so that unprotected firefighters in England and Wales who will be transferred into the 2015 scheme can ask the same question of their FRA Chair. 

This letter is attached to the circular and can also be found on the FBU website, see details below.

It is also very important that you send a copy of this letter to your MP for the reason outlined earlier.

Please visit the FBU website where the process for writing to your FRA Chair and your MP is simplified.

The simple two-stage process can be done in minutes:

1.     Print off, sign and send the model letter from the FBU website (http://www.fbu.org.uk/resources/letter-fra-chair-firefighter-pension-entitlement/) to your FRA Chair, the address is normally FRA Chair c/o your Brigade HQ.

2.     Enter your postcode in the find your MP tool provided (http://www.fbu.org.uk/mp-finder/) click on the “Clarify my pension scheme” option and email the model letter outlining what you have sent to your FRA Chair.

Please ensure that your Brigade Officials are kept informed of the response you receive.

Best wishes.

Yours fraternally

MATT WRACK

GENERAL SECRETARy

 

Coalition MP's not supporting local firefighters

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Coaliton MP's voting record in House of Commons debate on Firefighter Pensions

Despite much rhetoric from local Coalition Government MP’s in the lead up to the Firefighter Pensions debate in the House of Commons on Monday 15th December, there was a clear demonstration on whether they support local firefighters or not.

All Labour MP’s signed EDM 454 and voted in support of a fair resolution to the long running pensions dispute, the same cannot be said for the coalition MP’s.

Sir Alan Beith, MP for Berwick did participate in the debate on Monday, despite his input he made the decision not to vote either way.

James Wharton, Guy Opperman and Ian Swales all voted against the proposal supporting our fight to have the Pension regulations annulled, this action clearly demonstrates a lack of support for local firefighters in our campaign for a fair, workable and sustainable pension scheme fit for the future of the fire service and those that work in it.

We would now encourage constituents of these MP's to contact them asking what their justification was for voting against a fair resolution to the disbute as clearly the debate in the House was won in favour of the firefighters.

The debate can be found in Hansard at the link below;

http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm141215/debindx/141215-x.htm

 

 

 

House of Commons Pension Debate

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North East Labour Politicians  support Firefighters

North East Labour politicans supported firefighters in their fight for a fair outcome to the long running pensions dispute during the debate in the House of Commons on Monday 15th December. A number of North East politicains were called to speak including Dave Anderson (MP for Blaydon) and Ian Lavery (MP for Wansbeck), others wished to speak including Grahame Morris, below is the speech Grahame wanted to make on our behalf however was not called by the Speaker of the House;

As a member of the FBU Parliamentary Group I wanted to make a contribution during Monday’s Firefighters Pension debate but was not called by the Speaker.

These are the comments I wanted to make as part of the debate

I am proud to stand here today in defence of our fire and rescue service, and to thank all firefighters for what they do for our communities.

As we know all too well, they are often the difference between life and death in emergency situations.

No one wants industrial action, but I have had no hesitation in joining firefighters in my constituency on picket lines as they fight for a fair pension settlement and to safeguard public and firefighter safety.

There had been signs of optimism, especially when the Fire Minster, (Hon. Mem. For Portsmouth North) wrote to all firefighters in August promising:

“My goal is clear to get the best deal possible for firefighters and resolve this dispute.”

However, since taking up her new role in July, the offer on the table is exactly the same as that of her predecessor, this will result in firefighters paying more, receiving less, and will risk public and firefighters safety.

We are here today Mr Speaker because This Government has continuously refused to deal fairly with our firefighters.

In devolved administrations in Northern Ireland, Scotland and Wales, a fair deal has been negotiated between firefighters and the governments in those parts of the UK.

In Scotland and Wales it has been agreed that pensions will be reduced by 9% with the pension age being 55 years. Contrast that in England, where this government wants firefighter’s pensions reduced by 21.8% ­ nearly a quarter Mr Speaker, and increase the retirement age to 60yo.

Yet even the government’s own evidence on the physical demands of firefighting state this will not work.

Their own report highlights over 60% of firefighters aged 55-60 would be unlikely to meet the fitness standard used by most fire services and would therefore be unlikely to be able to achieve the new normal pension age of 60.

Not only are the government’s proposals ill-thought out and unworkable because of the unachievable levels of fitness firefighters are expected to maintain, but they directly discriminate against female firefighters.

The same report shows that all female firefighters will not meet the fitness standards and therefore be effectively drummed out of their job.

Only Elite Women Athletes will have the remotest chance of meeting these requirements.

Scotland, Wales and Northern Ireland have recognised this, why not the bench opposite?

This is a recipe for a diminished service, and threat to public safety. If firefighters are unable to achieve the required fitness standards what will happen?

They cannot be re-deployed – only 16 non-operational roles were available across the whole of England in 2012.

It will mean firefighters are forced to leave the service without a fair pension, after a career of service to their community.

On top of all of this firefighters are being asked to do more with less.

Figures published this year by DCLG in my own area, where we have seen multimillion-pound cuts, show brigades across the region have seen some of the biggest increases in fire call outs. My own fire service, County Durham and Darlington Fire and Rescue Service saw the second highest rise in call-out figures. Call outs increased by 35.7%, from 2,496 to 3,388.

Mr Speaker, more than 300 full-time firefighters roles have been lost in the North-East in the last four years. Durham and Darlington FRS has lost 49 firefighters. Even with the hiring of more backroom staff and some ‘on-call’ roles it means my local service is down 4.1% from 2010 figures and this is expected to double.

It is even worse for other North-East brigades – Tyne and Wear FRS has been reduced by 18.4%.

In fact recent plans put forward by my local brigade proposes training firefighters to deal with medical emergencies, including heart attacks, bleeding, breathing difficulties, trauma and strokes. Firefighters also have to deal with increased flooding and other risks, including helping in other parts of the country as we saw in the West Country and the South East of England

Yet to meet cuts imposed centrally, the same plan has local fire stations being staffed part-time and overall staff reductions.

This means the service firefighters are able to provide is not as good as it could be or as good as it was and will only get worse.

It means people are waiting longer after they dial 999 for firefighters to arrive. The ability to do the job safely is being undermined and this puts lives at risk.

Mr Speaker I expect the Tories to reject today’s motion, it is clear that the members opposite (with a few notable exceptions) support a race to the bottom in terms of wages, conditions and pensions across the public sector.

However, the Liberal Democrats declare they are different to the Tories. The number of engineered disagreements with their Coalition partner continue to rise on a daily basis as we approach the election campaign and they seek to find a degree of separation from a toxic legacy.

Well, today is an opportunity to provide more than warm words.

Today they can show the British People that on issues such as we are discussing in this debate, they are willing to stand and be counted, literally, when they walk through the lobby to vote to support this nations firefighters.

The success or failure of this motion will largely depend on the Liberal Democrats. I implore you to show that your disagreement with the Government is genuine and have the principle to stand up on the side of real working people and support our firefighters so they can achieve a fair pension settlement as well as safeguarding the health and safety of all of us and firefighters themselves.

Last Updated on Thursday, 18 December 2014 12:22
 
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