Archived decisions

Hampshire Fire and Rescue Service

Human Resources Committee Item 12

1 December 2006

Firefighter Pension Schemes

Report of the Chief Officer

Contact: SM Bob Russell Tel : 023 80 644 000 ext 5422 Email : [email protected]

1

Summary

1.1

This report summarises two separate pension provision issues.

1.2

Item 1

The DCLG have requested that the Fire and Rescue Authority consider whether or not it will continue with the Group Personal Pension Scheme (GPP), when the New Firefighters Pension Scheme (NFPS) becomes available to RDS employees. It is anticipated that the NFPS will be made available during the first quarter of 2007.

1.3

Item 2

That the Human Resources Committee give consideration in providing the Chief Officer with delegated power, to allow members of the Firefighters' Pension Scheme (FPS) to make up pension service shortfall, due to periods of absence prior to 6 April 2006.

2

Recommendations

2.1

That it be recommended to the Authority :-

- That they adopt the following option for future management of the GPP scheme:

    · The current GPP scheme be continued for pre 6 April 2006 members but closed to all post 5 April 2006 applications.

    · That employers contributions be paid for pre 6 April 2006 RDS employees who wish to remain in the GPP scheme but do not wish to join the NFPS.

    · That employee contributions are collected, from those who wish to be members of both GPP and NFPS schemes. In this case employer contributions will not be made into the GPP scheme.

2.2

- That delegated power be given to allow the Chief Officer to decide, on a case by case basis, whether to instruct FPS administrators to collect payments from a pension scheme member wishing to make up FPS employee contribution shortfall, for periods of unpaid leave prior to 6 April 2006.

3

Introduction and Background

3.1

Item 1

The Firefighters' Pension Scheme Order 1992 (FPS) does not make specific provision for RDS firefighters. Because of this, Hampshire Fire and Rescue Authority has been operating a GPP scheme specifically for RDS employees since 1994. The scheme is centrally administered by Woodgate and Partners Ltd. An employers contribution is made to this scheme as detailed in paragraph 8.4.1.

3.2

With the introduction of the NFPS, all Grey Book employees joining Hampshire Fire and Rescue Service, post 5 April 2006, are automatically considered members of the NFPS. The NFPS Order has yet to be laid before Parliament however, an `options exercise' will take place between January and March 2007, allowing pre 6 April 2006 RDS entrants the opportunity to join the NFPS if they so wish.

3.3

The DCLG have indicated that the NFPS Order will give statutory backing to the GPP scheme for pre 6 April 2006 starters only.

3.4

Item 2

Rule F2(3) of the FPS gives Fire Authorities the discretion to allow members to pay pension contributions to count as pensionable service, any period of absence without pay. New financing arrangements from 1 April 2006 have removed this discretion and made it a members right to elect to pay pension costs to enable these periods of absence without pay included as pensionable service. The power being sought in this paper will therefore only apply to periods of unpaid leave completed before 1 April 2006.

4

Options available for existing GPP members

4.1

    · Remain in the GPP scheme whether or not the Service continues to deduct contributions at source.

    · Make no further contributions, leave Policy paid up.

    · Transfer GPP to new scheme for additional membership.

    · If aged 50 or over, take GPP pension now.

    · Remain in GPP scheme and join NFPS.

5

Options available for recommendation

5.1

    · Cease employers contribution into GPP for all.

    · Cease employers contribution only for those who enter the NFPS.

    · Cease employers contribution for all post 5 April 2006 entrants.

    · Continue to deduct employee contributions at source.

5.2

The Authority will need to announce their preferred option before the `options exercise' takes place, allowing GPP members every opportunity to make informed choices.

6

Contribution to Corporate Aims and Objectives

6.1

The recommendations contained within this report do not conflict with the Corporate Aims and Objectives. Both recommendations are compatible with HFRS `People' centred Corporate Values.

7

Risk Analysis

7.1

In relation to GPP/NFPS it will be illegal for the Authority to pay employer contributions into more than one pension scheme per individual.

7.2

The views of individual RDS employees have not been sought on preferred options.

8

Resource Implications

8.1

Human Resources

The administrative burden attached to each of the recommendations will not increase the existing human resource requirements for pensions administration.

8.2

Physical Resources

There are no physical resource implications.

8.3

Information and Communications Technology Resources

Options can be managed by existing ICT technologies and databases.

8.4

Financial Implications

8.4.1

There are currently 266 GPP members. Their individual contributions vary depending on personal preferences, however, the employers contribution remains at £10.84 per employee, per month. The NFPS requires an employers contribution of 13.5%. Based on a minimum salary (Trainee Firefighter, part cover) of £121.19 per month, excluding callout fees, the employer contribution will be £16.36 per month. It demonstrates that it will be beneficial to allow RDS employees to remain in the GPP scheme should they so wish.

8.4.2

The financial implications of any request by an FPS scheme member to have a period of absence without pay included as pensionable service, will be considered on an individual basis.

9

Equality Impact Assessment

9.1

The proposals within this report are considered compatible with the provisions of the European Convention on Human Rights, the Human Rights Act 1998, and the Race Relations (Amendment) Act 2000.

10

Consultation

10.1

Item 1

Hampshire FBU and RFU have been consulted.

11

Conclusion

11.1

Item 1

The DCLG recognise that RDS staff, employed before 6 April 2006 and who joined a GPP scheme, may wish to continue in membership rather than join the NFPS. Provision in the NFPS order will allow the Authority to continue to make employer contributions in respect of a firefighter who is not a member of the NFPS.

11.2

Post 5 April 2006 RDS employees will not be permitted to join the GPP scheme. The NFPS order will give statutory backing to the GPP Scheme for pre 6 April 2006 starters and employers contributions will be permitted for these Scheme members.

Background Information (Section 100D of Local Government Act 1972)

The following documents disclose the facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of the report:

Note: The list excludes: (1) published works; and (2) documents that disclose exempt or confidential information defined in the Act.

laj/C/H/HFRA HR 1 12 06 Pensions 17/11/06