Remedy

Removing age discrimination from the Firefighters’ Pension Scheme.

We understand that you may have questions or concerns relating to the age discrimination (Sargeant) ruling, which was accepted by the Government in July 2019.  

Rest assured, we are aware of the ongoing discussions being held between the Local Government Association (LGA) and the Fire Brigades Union (FBU). We are in constant dialogue with all parties and are working hard to get you the information you need to help you understand the impact of this ruling.

Working with the Fire and Rescue Authorities (FRAs) 

As part of this process, LPPA is working closely with the FRAs to make sure they notify us of their intentions. Together, we are also trying to establish a sensible process for handling individual cases. While it is too early to offer any timeframe on when individuals will be contacted, we will be in touch with individual members as soon as we have further information.

Next steps

If you do wish for your pension benefits to be considered and reviewed under Immediate Detriment, please contact your FRA directly. In the meantime, the following links to the LGA website, provide you with the very latest information on Remedy and how it might impact you.

2015 Remedy FAQs – Firefighters’ Pension Scheme
Click to view
2015 Remedy FAQs – FPS 1992 – 2015 transition members
Click to view

Myth buster

2015 Remedy ‘Facts’ – True or False

There are a lot of rumours circulating about Remedy. So, the Firefighters’ Pensions England Scheme Advisory Board have worked with the LGA to help clear up some of the facts about Remedy. The following information has been taken directly from their myth buster document.

FALSE

Members don’t need to take any action now. 

The Government has committed to applying these changes across all public sector pension schemes. 

This means members don’t need to do anything to receive the 2015 Remedy or to protect their existing benefits. 

Affected members will need to make a decision close to retirement about whether to take benefits built up during the remedy period from the relevant final salary or 2015 CARE scheme. Benefit illustrations for both schemes will be provided to members to help them decide. 

Affected deferred and pensioner members who have left the Scheme or retired since April 2015 will be contacted automatically by their Firefighters’ Pension Schemes administrator. The only action you should take is to make sure your contact details are up to date with your pension scheme administrator. 

A list of administrators is available at Fpsmember.org/contact

FALSE

It is true that final salary schemes will be closed to future pension build up on 1 April 2022. This means all active members (including members who received protection) will move into the Firefighters’ Pension Scheme 2015 (the 2015 CARE scheme) from 1 April 2022 and build up benefits in the 2015 CARE scheme from that date. 

However, when you move into the 2015 CARE scheme on 1 April 2022, you will still have access to any final salary benefits you have built up in the Firefighters’ Pension Scheme 1992 (FPS 1992) or the Firefighters’ Pension Scheme 2006 (FPS 2006). No changes will be made to these benefits, and the benefits you’ve built up will be calculated using the final salary scheme rules when you retire, meaning your final salary benefits are protected. Your future service will also count towards double accrual in respect of service in FPS 1992. The benefit illustrations that will be made available in March 2022 will show how this works. 

You can find out more at fpsmember.org/fps-2015/double-accrual-guarantee

FALSE

You can still choose to retire at your final salary scheme’s normal pension age. You would then receive the sum of: 

  • Your final salary pension up to 31 March 2015 from your relevant normal pension age;
  • For service between 1 April 2015 and 31 March 2022, the choice of pension calculated in line with your relevant final salary or 2015 CARE scheme, and;
  • Any 2015 CARE scheme pension built up from 1 April 2022 until your retirement date. Any FPS 1992 pension will be enhanced for double accrual as noted above.

The 2015 CARE scheme pension for both service in the remedy period and service after 1 April 2022 may be reduced if you choose to take your 2015 CARE scheme pension before age 60, as it is being paid for longer than expected. 

If you do choose to retire before age 55, you will not be able to access your 2015 CARE scheme pension immediately. This can then be taken from age 55 with early retirement reductions or paid in full at your State Pension age.

FALSE

You can opt out of the scheme at any time, but please think carefully before doing this and consider taking independent financial advice. While your take-home pay may be higher, you lose other valuable benefits including additional guaranteed income in retirement and death-in-service cover. 

The 2015 CARE scheme is still a valuable defined benefit scheme, which is expected to be worth more than your contributions. It’s a Career Average Revalued Earnings (CARE) scheme, which means it provides benefits based on your average salary throughout your career instead of final salary. 

A pension of 1/59.7th of your pay is added to your pension account each year and revalued in line with average weekly earnings until retirement. When you retire, you’ll have the option to exchange part of your pension for a tax-free lump sum. 

If you opt out of the 2015 CARE scheme, you should be aware you won’t benefit from building up additional pension in a scheme where the employer contributes a significant proportion of the cost. You’ll receive a lower level of pension at retirement, and it will also impact your death-in-service cover and the value of any potential ill-health pension. 

2015 CARE scheme benefits for active members are payable from age 60 (without reduction) and from age 55 onwards (with reduction). If you opt out, benefits are instead payable from your State Pension age and CARE pension taken before State Pension age will be reduced by the relevant early retirement factors. CARE pension will also not be revalued in line with average weekly earnings but revalued in line with Consumer Price Index (CPI).If you opt out, your final salary scheme benefits would also become deferred. In that case, FPS 1992 benefits are payable from age 60 and FPS 2006 benefits from age 65. 

See more information at fpsmember.org/fps-2015/opting-out

TRUE, although there are restrictions

If you leave the pension scheme, you may be able to transfer your benefits to another public sector pension scheme or registered occupational pension scheme with defined benefits in the Public Sector Transfer Club. However, under Government regulations, it’s not possible to transfer to defined contribution schemes such as a personal pension. 

You can only transfer your benefits once you have left the pension scheme and as long as you are not within one year of normal pension age.

 

FALSE

You may have heard of some high earners opting out of the schemes. While we’re unable to comment on individual cases, we’d expect this could be to avoid triggering a tax charge from either the annual or lifetime allowance by remaining in the scheme. 

For information, the annual allowance is the limit on the total amount that can be saved into a pension scheme each tax year (currently between £10,000 – £40,000) with tax relief applying and before a tax charge might apply. The lifetime allowance (currently £1,073,100) is the limit on how much you can build up in pension benefits over your lifetime while still enjoying the full tax benefits. 

If you think you might be affected by this, we recommend you seek regulated financial advice, as it may still be in your interests to remain in the scheme even if you have to pay tax or ask the scheme to pay it on your behalf in return for a reduction in benefits. 

More information on tax is available at fpsmember.org/need-to-know/tax-and-your-pension-benefits 

FALSE

There is no limit to the amount of service you can build up in the 2015 CARE scheme regardless of how much was built up in your final salary scheme. The maximum service that can be built up in the final salary schemes is 40 years (30 years for the FPS 1992 scheme as service after 20 years counts double).

FALSE

The contributions holiday was introduced to take account of the fact that members could not build up more than 30 years of service in the FPS 1992. 

As there is no service cap in the 2015 CARE scheme, the contributions holiday provision does not apply. 

You will carry on building up benefits for every year you are a scheme member. 

FALSE

The rules around tax-free lump sums are not changing. This means you will still be able to access a tax-free lump sum from your final salary and 2015 CARE schemes when you retire. If you have service in the FPS 1992 scheme, the age-related commutation factors will still apply to this part of your benefits.

FALSE

Because the 2015 Remedy offers you a deferred choice, many people won’t have to make a decision for some time, until they are due to retire. 

This is helpful because there are still some complex issues to resolve and administration challenges to overcome before schemes will be in a position to implement the 2015 Remedy and process cases without the risk of members not getting right the tax relief or interest on the various payments that will need to be made. 

This is why the Government has given public sector pension schemes until October 2023 to make new laws to move affected members of the CARE schemes back to their final salary schemes for the remedy period and offer a choice to those retiring. 

For more information on the Government’s progress in implementing the 2015 Remedy go to: Public service pensions – response to McCloud – House of Commons Library (parliament.uk)

However, for those that are retiring sooner or have already retired, individual Fire and Rescue Authorities are considering how to respond to changing Government guidance on processing cases. Any payments that are made at a later date will be backdated and have interest applied. 

We’re also making a more detailed communication available to members in March 2022. This will show a range of illustrative member scenarios to help you better understand the implications of the 2015 Remedy on your benefits. 

The differences between the final salary and CARE pension schemes means the set of benefits that is best for members depends on personal circumstances and preferences, including things you may not yet know, such as how your salary changes in the future and when you will retire. The communication will outline various scenarios, using different milestones and salary profiles for a set of example members in service across all the final salary schemes. 

This means you’ll be able to see the benefits the members would be entitled to if they retired at these milestones, comparing the position of the member choosing final salary or CARE benefits for the remedy period. 

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