TYNE AND WEAR FIRE AND RESCUE AUTHORITY SUBJECT: FIREFIGHTERS PENSION SCHEME 2015 EMPLOYER CONTRIBUTIONS FROM 1 APRIL 2015

Size: px

Start display at page:

Download "TYNE AND WEAR FIRE AND RESCUE AUTHORITY SUBJECT: FIREFIGHTERS PENSION SCHEME 2015 EMPLOYER CONTRIBUTIONS FROM 1 APRIL 2015"

Jayson Lane
8 years ago
Views:

1 TYNE AND WEAR FIRE AND RESCUE AUTHORITY Item No HUMAN RESOURCES COMMITTEE: 23 APRIL 2015 SUBJECT: FIREFIGHTERS PENSION SCHEME 2015 EMPLOYER CONTRIBUTIONS FROM 1 APRIL 2015 JOINT REPORT OF THE CHIEF FIRE OFFICER, THE CLERK TO THE AUTHORITY, THE FINANCE OFFICER AND THE PERSONNEL ADVISOR TO THE AUTHORITY 1 PURPOSE OF REPORT 1.1 The purpose of this report is to inform members on the Firefighters Pension Scheme 2015 ( the 2015 Scheme) Employer Contributions from 1 st April BACKGROUND 2.1 As Members will recall, The Coalition Government commissioned Lord Hutton to chair the Independent Public Service Pensions Commission to review public service pensions and to make recommendations on how they can be made sustainable and affordable in the long-term and fair to both public sector workers and the taxpayer. 2.2 On 23 May 2012, a Proposed Final Agreement was published on the scheme design for the 2015 Scheme in England to be introduced from April. 2.3 The first period of statutory consultation took place between 18 December 2013 and 12 March 2014 and the second period of statutory consultation commenced on 23 May Members were kept informed regarding the consultations throughout the consultation period. Key areas of interest included the rates at which employers and employees were expected to contribute to the 2015 Scheme

1 The purpose of this report is to inform members on the Firefighters Pension Scheme 2015 ( the 2015 Scheme) Employer Contributions from 1 st April 2015. 2 BACKGROUND 2.

2 3 EMPLOYER CONTRIBUTIONS TO THE FIREFIGHTERS PENSION SCHEME The second statutory consultation sought responses from interested parties on the draft regulations for the new Firefighters Pension Scheme and in particular, a more detailed set of draft regulations to the earlier consultation which included the chapter, Employer Contributions Part 8, Chapter This new chapter sets out that employers will need to pay contributions based on a member s pensionable earnings or, where applicable, based on a member s assumed pensionable earnings. The actual employer contribution will not be specified in the regulations, but the regulations set out that the Secretary of State will notify scheme managers of the employer contribution rate, which will be based on the 2015 scheme s valuation. 3.3 The Authority is now in receipt of the new employer contribution rates for the 1992, 2006 and modified pension schemes. Modelling has taken place of contributing employees in the various schemes on full protection, transitional protection and no protection. This modelling indicates a 2015/16 budget figure reduction in employer s pension contributions of 280,000. The implications of this position will be monitored and subject to further reports. 3.4 An unknown factor is what, if any, compensatory adjustment Government might make to grant funding. As such it would appear prudent to recommend retaining the 2015/16 budget as agreed until further information is provided by Government. Employer contribution rates from 1 st April 2015 for all schemes Pension scheme Employer contribution rate 1992 Scheme 21.7% 2006 Scheme 11.9% 2015 Scheme 14.3% 3.5 Members are advised that the Governments proposals for employee contribution tariffs for the Firefighters Pension Scheme 2015 are contained in Appendix A to this report for information. 7 RISK MANAGEMENT 7.1 A risk assessment has been undertaken to ensure that the risk to the Authority has been minimised as far as practicable.

regulations to the earlier consultation which included the chapter, Employer Contributions Part 8, Chapter 3.

3 8 FINANCIAL IMPLICATIONS 8.1 All financial implications are included within the body of this report however, members should note that the financial implications may be affected by any compensatory adjustment made by Government (if any). 9 EQUALITY AND FAIRNESS IMPLICATIONS 9.1 The equality and fairness implications are included within the body of this report. 10 HEALTH AND SAFETY IMPLICATIONS 10.1 There are no health and safety implications in respect of this report. 11 RECOMMENDATIONS 11.1 Members are recommended to: a) Consider the content of this report; b) Receive further reports as appropriate. BACKGROUND PAPERS The under mentioned Background Papers refer to the subject matter of the above report: Consultation on the regulations to introduce a new Firefighters Pension Scheme from April December 2013 and May 2014 consultations.

(if any). 9 EQUALITY AND FAIRNESS IMPLICATIONS 9.1 The equality and fairness implications are included within the body of this report. 10 HEALTH AND SAFETY IMPLICATIONS 10.

4 Appendix A Employee contribution rates from 1 st April 2014 The table below sets out the Government s proposals for employee contribution rates to apply in the in 2014 for the 1992 and 2006 schemes: Pensionable pay band (full time equivalent) Fire Pension Scheme 1992 Previous Contribution Rate rate effective New Fire Pension Scheme 2006 Previous Contribution rate Rate effective <= 15, % 11.00% 8.50% 8.50% 15, % 12.20% 9.10% 9.40% 21,000 21, % 14.20% 9.60% 10.40% 30,000 30, % 14.70% 9.90% 10.90% 40,000 40, % 15.20% 10.10% 11.20% 50,000 50, % 15.50% 10.20% 11.30% 60,000 60, % 16.00% 10.50% 11.70% 100, , % 16.50% 10.80% 12.10% 120,000 > 120, % 17.00% 11.10% 12.50% Employee contribution rates from 1 st April 2015 The table below sets out the Government s proposals for employee contribution rates to apply in the first four years of the 2015 scheme Employee contribution rate payable 0 and up to 27, % Over 27,000 and up to 50, % Over 50,000 and up to 142, %

00% 11.00% 8.50% 8.50% 15,001-11.90% 12.20% 9.10% 9.40% 21,000 21,001-12.90% 14.20% 9.60% 10.40% 30,000 30,001-13.20% 14.70% 9.90% 10.90% 40,000 40,001-13.50% 15.20% 10.10% 11.20% 50,000 50,001-13.

5 Employee contribution rate payable 0 and up to 27, % Over 27,270 and up to 50, % Over 50,500 and up to 142, % Employee contribution rate payable 0 and up to 27, % Over 27,543 and up to 51, % Over 51,005 and up to 142, %

LGPS 2014 - FREQUENTLY ASKED QUESTIONS

LGPS 2014 - FREQUENTLY ASKED QUESTIONS THE BACKGROUND TO LGPS 2014 Why is another new scheme being introduced? The Coalition government came to power with a clear agenda to change public sector pensions,