Pension News

Age Discrimination - Pension Update

As previously published late last year we were made aware that the cost-cap for the 2015 Firefighters Pension Scheme had been breached and therefore the Home Office looked towards the Scheme Advisory Board (SAB), of which we are a member, to provide a solution to remedy the breach.

Members of the SAB met last month and a set of proposals were presented to the Home Office, these proposals would rectify the breach, provide scheme members with improved benefits but also incur an additional cost to local employers.

However, to complicate matters around the same time the Court of Appeal ruled that the Government’s changes to pensions (firefighters and judges) was discriminatory on the grounds of age. While the government has applied to the Supreme Court to appeal the ruling (a decision that could take up to 12 weeks), the fact that the latest public sector pension schemes (Health, Education, Police etc.) might require a major review due to the legal outcome has led to a halt in work undertaken to rectify the cost-cap breach.

So what does this mean to serving members of fire pension schemes?

At present, the government is awaiting the outcome of their application to appeal the ruling. If an appeal is granted it will be many months before a final legal decision is made within the courts. If the government wins its appeal we do not expect there to be further changes made to the pension scheme other than to rectify the cost-cap breach.

If the government either fails in it application to appeal, or loses a further appeal a remedy hearing is likely to take place to decide on how the legal ruling can be rectified. This will require all of those affected by the age discrimination to be treated fairly, this could be achieved by those currently deemed to be disadvantaged having more favourable terms applied to bring them level with their comparatores or a lowering of the benefits to equalise the terms.

This situation is extremely complicated and fluid so it would be inappropriate to try and second guess in any detail what will happen in the coming months. We will however do our best to provide information to members that is timely and factual as and when it becomes available.

In the meantime if you have any further questions on this matter please contact FRSA HQ.