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Written Statement - Proposals for a new Firefighter Pension Scheme in Wales from 2015 onwards, Industrial Action

Lesley Griffiths AM, Minister for Local Government and Government Business

In Plenary on 3 June, I committed to providing Members with an update on the discussions I have had with the UK Government regarding firefighter pensions. This statement does so and provides the context and development work undertaken over the last year in light of the ongoing trade dispute by the Fire Brigades Union (FBU).

Firefighter pensions are devolved to Welsh Ministers under the Fire and Rescue Services Act 2004.  There are currently two pension schemes for firefighters in Wales, the Firefighters Pension Scheme 1992 and the New Firefighters Pension Scheme 2007. Although devolved, there is little leeway to diverge from UK Government policy as this may impact on Her Majesty’s Treasury funding for the schemes.

Since 2007-08, the pension top up funding paid to Welsh Fire and Rescue Authorities has increased from £9.5m to £18.5m in 2013-14 and is estimated at £24m for 2014-15.
The top up funding provided by HM Treasury makes good annual shortfalls in pension funds and is paid through Annual Managed Expenditure (AME).

In the event of HM Treasury support for pensions being withdrawn, Welsh Government would need to fund the shortfalls through Departmental Expenditure Limits and any shortfall in future years (caused, for example, as a result of specific changes to Welsh Firefighters Pensions terms and conditions which may differ from England) would not attract further funding from HM Treasury. The FBU has been fully briefed and understand the conditions imposed by HM Treasury and the ramifications of any divergence for the Welsh Government.

Full scale pensions’ reform across all public service pension schemes, including the Welsh Firefighter Pension scheme, follows recommendations from Lord Hutton’s commission to make pensions more affordable and sustainable in the long term. The Public Service Pensions Act 2013 (2013 Act) received Royal Assent on 25 April 2013.

The FBU has consistently outlined their opposition to several aspects of the proposed new pensions’ scheme arrangements and a trade dispute letter was issued to all UK Ministers in May 2013.  This has led over the past year to FBU members taking industrial action on fourteen occasions, most recently on 21 June 2014.  

During the course of the trade dispute, I have met with and corresponded with Brandon Lewis MP, Parliamentary Under Secretary of State, Department of Communities and Local Government on numerous occasions.  As part of this dialogue, I have consistently urged the Minister to continue discussions with the FBU to reach a negotiated settlement to the dispute as soon as possible.

In September 2013, the First Minister asked officials to pursue a common fitness standard in Wales, with Welsh Fire and Rescue Authorities as employers, and representative bodies playing their part.  Progress has been made on the introduction of a single firefighter fitness standard for Wales by all three Welsh Fire and Rescue Authorities (FRA) and formal adoption, within the context of a single supporting health and fitness policy, is expected in mid July.

As part of the development of the new 2015 scheme I have commissioned the Government Actuary’s Department (GAD) to provide appropriate calculations to define the new scheme within a Welsh context. Under the 2013 Act, all schemes require a valuation of the scheme to be undertaken, this work is being undertaken by GAD, in accordance with HM Treasury scheme design parameters, and will provide the employer contribution rate and employer cost cap for the scheme.  In addition, as part of the development for the scheme, my officials have sought advice on the employee contribution rates to be proposed for Wales.  These will be consulted on in due course as part of the consultation process for the new scheme.  

The first consultation on the new 2015 Firefighters’ Pension Scheme from April 2015 is currently open on the Welsh Government website and closes on 4 July.  Welsh Government welcomes all comments regarding the consultation. You are able to respond using the online form or by post as detailed in the link below.

A further consultation will be issued in due course which will build on the draft proposals to include the outcome of the valuations and financing arrangements for new scheme.  Again, when appropriate I would welcome all views to feed into the final scheme for Wales.