Pension News

Firefighters’ Pension Scheme 2015 - transitional arrangements

Following the introduction of the 2015 Firefighters’ Pension Scheme, transitional arrangements were put in place by the then Government to progress firefighters from their current pension scheme (1992, Modified or 2006) to the new 2015 scheme (transition). These arrangements were dependent on age/service and scheme membership, some firefighters who were 10 years of less from their Normal Pension Age (NPA) had full protection and remained in their pension scheme. The older a firefighter was, the more likely they were to have longer service and therefore less time to serve before reaching the NPA of their pension scheme. Therefore, the younger a firefighter was, the less protection they were likely to have, if any.

The FBU decided to challenge the Government along with another case that involved Judges, who, like a number of public sector pension schemes, were being treated in the same way on the grounds of age discrimination.

It is important to note that the case relates only to the transitional protection arrangements in the 2015 firefighters’ pension scheme, and whether these are discriminatory. It does not address the introduction of that scheme itself by the primary legislation of the Public Service Pensions Act 2013.

The court found that, having introduced the protections, the Government should have justified the discriminatory impact but that it had failed to do so, and therefore justification on the grounds of legitimate aims must fail. As a result the court dismissed any further deliberation over the question on proportionality of means.

The Government applied to the Supreme Court to appeal this decision, however, yesterday the Supreme Court denied the Government’s request for an appeal and therefore the case on behalf of the Firefighters and Judges had succeeded.

What does this mean?

Until the remedy has been determined by the employment tribunal and any regulations changed as a result, it is unclear as to how future benefits may change. Therefore any retirement projections, Annual Benefit Statements (ABS) as at 31 March 2019, or pensions advice must be based on the regulations as they currently stand and arguably are meaningless.

The remedy hearing will overcome the age discrimination, however, that does not automatically mean that those discriminated against will have their benefits uplifted or be reverted back into their original pension scheme as the 1992, Modified and 2006 schemes are closed and would require new legislation to readmit employees back into these schemes.

Added to the fact that this legal decision will impact on other public sector pension schemes that undertook similar transitional arrangements, the cost of which will be huge, the Government is likely to seek a remedy that will overcome the discrimination while incurring the lowest additional cost.

The remedy could in theory also take a considerable time to agree (potentially a year or more) so nobody will know the individual impact on their pension in the near future.

As more factual information becomes available we will advise members accordingly.