The Fire Brigades Union has drawn attention to a problem facing members that have accrued benefits in both the 1992 and 2015 Firefighters’ Pension Schemes, which exposes, in particular, members aged over 55 that can no longer meet firefighters’ fitness requirements.
In a missive to members on July 18, FBU national officer Mark Rowe highlighted the fact that members of the 1992 scheme cannot draw their benefits without retiring from their fire and rescue service.
The crux of the problem is the different pensionable ages between the two schemes. While the 1992 scheme has a normal pension age of 55 — with members being able to retire earlier at age 50 and with at least 25 years’ service — the 2015 scheme has a normal pension age of 60, with members being able to retire at age 55 but facing a reduction to their pension.
Rowe added that if a member takes their 1992 benefits after the age when they first became available, there is no uplift to account for the fact that they are being taken late.
It is not in the interests of the service to support a substantial number of employees who are not fit to perform frontline duties, for whom there is no alternative role but who cannot afford to retire
Mark Rowe, Fire Brigades Union
Members are able to take their 1992 scheme pension at the same age that applied before the 2015 reforms, “but the consequences could be disastrous”, Rowe said, due to the implications with the 2015 scheme.
Fire services face being left to support firefighters that cannot pass fitness tests, who cannot afford to retire, he added.
Damned if they stay, damned if they go
The FBU identified the risk to members in their late fifties that are unable to meet fitness standards.
It cited a recommendation from the 2013 Williams Report that firefighters over the age of 55 that can no longer meet these standards be allowed to leave early on a reduced pension calculated. This would ensure that there is no overall financial advantage or disadvantage to the firefighter for leaving before the normal pension age.
Rowe said the union had previously established that increasing the normal pension age to 60 in the 2015 scheme was “probably lawful”.
He added that it had made progress on lowering early retirement reductions to benefits, and had forced the government to relax rules governing fitness in order to support those that fail fitness tests.
“The problem for firefighters who have service in the 1992 FPS and in the 2015 scheme is that, whatever choice they make when they reach the age of 50 or 55, they stand to lose out,” he said.
An example was offered of a member born in 1977 that had joined the fire and rescue service in 1997 at the age of 20. On March 31 2022, they would be aged 45 and not yet able to draw their 1992 scheme benefits. Five years later, at the age of 50, they could do so, having accrued five years’ membership of the 2015 scheme.
Rowe pointed out that this member that draws from their 1992 benefits would have a commutation factor applied but that, because they must leave their service, the five years of their 2015 benefits would be treated as deferred and could not all be taken at age 50.
They could, instead, take the deferred 2015 scheme pension from age 55 and accept that it will be subject to actuarial reduction. But this reduction would be “massive” in England. A member with the state pension age of 67 would face a 46.6 per cent reduction.
The member could continue working until retiring and draw both pensions at age 55. However, the 2015 scheme pension will be reduced in England by 21.7 per cent, and the 1992 scheme pension will not have been paid for five years.
If they worked until age 60, the 15 years’ 2015 scheme pension could be taken without an early retirement reduction, but their 1992 scheme pension would be paid 10 years late without an actuarial uplift.
“This is grossly unfair,” Rowe said. “Whichever choice they make, the member has lost tens of thousands of pounds.”
If the accrued 1992 scheme pension is worth £15,000, for example, delaying payment by 10 years would represent a loss of £150,000. “But unless the regulations are changed, this continues to be lawful,” he added.
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Rowe pledged to raise the issue “when the next batch of pension regulations are made in the coming months”.
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“It is not in the interests of the service to support a substantial number of employees who are not fit to perform frontline duties, for whom there is no alternative role, but who cannot afford to retire,” Rowe said.
“The FBU believes that the [Firefighters’ Pension Scheme] regulations must be amended — and have stated as such to [the] Home Office — to include provision allowing them to retire without financial or other disadvantage.”
A Home Office spokesperson said: “The government is committed to providing public sector pensions that are fair to both workers and taxpayers.”
