Firefighter Pension Committee warns of employee contribution hike
At the Firefighters Pension Committee meeting held on November 17, a paper was presented by the Communities and Local Government pensions team titled: Comprehensive Spending Review: Note on change to employees contribution rate.
The FPC chair informed the attendees at the meeting that following the government's spending review - and as a prequel to any reforms that the Hutton review may recommend - H.M Treasury will be imposing a rise to the employee contribution rate for the Firefighters' Pension Scheme.
According to sources, this proposed rise will be of 3-3.2%, dependent on the effect of an exemption given to the Armed Forces Pension Schemes, with a proposal that the employee contribution rate will raised by 1% per year from 2012 until 2014 when it will stand at 14%.
In addition to these contribution rises, it is also proposed that a tiered employee contribution rate is introduced from 2012. If introduced, it will mean that by 2014 station/group managers could be paying up to 16%, and area managers could be paying up to 17%. This could mean that an area manager pays almost £3,700 more in employee pension contributions per year by 2014, a station manager almost £2000 more per year, and a firefighter almost £900 more per year.
Representatives from CLG informed the committee that they were expecting a letter from the Chief Secretary to the Treasury outlining exact details of how employee contribution rates would rise. They stated that as a result of treasury decisions, the proposed increases to employee contribution rates were unavoidable.
CLG also outlined that from 2014 pension benefits would be reformed. This included potential increases in retirement age and moves to end final salary schemes, replacing them with career average schemes.
FBU officials present at the meeting made it clear that the union opposed these proposals. CLG have indicated that similar employee contribution rate increases will be applied across all public sector pensions. Members in the Local Government Pension Scheme will face an increase in their contributions over the same period of around 3%, meaning that the average contribution rate will rise from 6.4% to 9.4%.
Date posted: 26.11.10
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