Transcript Document

Welcome
Proposed Pension
Cuts
UK Debt
Government says;
• The UK debt is the worst in living
memory
• We must all make sacrifices to get the
debt paid off
George Osbourne says;
• We are all in this together
3
Do you see George and other MP’s
leading the way with sacrifices?
UK Debt
It doesn’t get any worse than that
does it
4
UK Debt
Or does it?
The previous graph was is a small section taken from the
one below but the government and some newspapers
like to use it to justify the public sector cuts the
government announced BEFORE the Hutton review
had been completed.
5
UK Debt is NOT the reason;
• for your pay being frozen for at least 2
years despite inflation running at over
5% for the last 2 years.
That’s a £3k devaluation in wages for a FF
so far!
• why you must work longer, pay more
and get less pension entitlement
The only reason is political spin;
to be seen to be cutting public spending
6
Pension Cuts
Work longer, pay more and get less
• Pension up rating mechanism changed from RPI
to CPI
• Contributions to rise from 2012. By 2014 a FF
will pay £350 per month
Both existing pension schemes end in 2015 and a
new one introduced for everyone which includes;
• Min. age to receive full pension will be 60 for all
• Career average scheme not final salary
• Regularly rising contribution rates as pension
scheme changes to “Cap n Share”
You can’t deny, it’s an attractive proposition!
7
RPI to CPI
This change has already happened as it
was introduced in the 2011 budget.
• Pensions are devaluing as a result of this
imposition as CPI does not keep up RPI.
• This change will decrease the maximum
commutation sum for a FF by
approximately £10k.
• The FBU and some other public sector
unions are challenging this legally. The
case is scheduled to go to court in
October.
8
April 2011
Rise in contributions
• No public service workers pay more in
contributions than the 11% FF’s already
pay into the FPS
• Government wants a 3.2% rise for all*
public services. This would take a FF’s
contributions to 14% (£351pm), 11.7%
for NFPS (£292pm), whilst many other
public sector workers would still pay
less than 8%
• Phased contributions; FF 14.2% up to
AM’s who will pay 17%
9
From 2012
Minimum Retirement age 60
The table below shows the VO2 Max values for age and sex
rating
excellent
good
> average
average
rating
excellent
good
> average
average
10
18-25
> 60
52-60
47-51
42-46
18-25
> 56
47-56
42-46
38-41
26-35
> 56
49-56
43-48
40-42
Men Age (years)
36-45
46-55
> 51
> 45
43-51
39-45
39-42
35-38
35-38
32-35
56-65
> 41
36-41
32-35
30-31
65+
> 37
33-37
29-32
26-28
26-35
> 52
45-52
39-44
35-38
Women Age (years)
36-45
46-55
> 45
> 40
38-45
34-40
34-37
31-33
31-33
28-30
56-65
> 37
32-37
28-31
25-27
65+
> 32
28-32
25-27
22-24
Proposed new pension scheme
Minimum Retirement age 60
• Current VO2 Max pass mark is 42
• Few men will be able to reach the VO2
Max above age 55
• Virtually no women will be able to reach
the VO2 Max above age 55
This will not be covered under ill health
retirement
• Those who cannot reach the fitness
standard will be sacked under capability
as there are simply not enough non
operation roles available to redeploy all
these members
11
Proposed new pension scheme
Minimum Retirement age 60
Anyone who joined the fire service
after age 20 will not be able to
accrue a full pension entitlement
by age 60.
Many will have to work much longer
to avoid a poverty stricken
retirement, although ironically,
their retirement will be far shorter
as a result.
12
Proposed new pension scheme
End to final salary scheme
Promotion leads to loss of pension as
well as even higher rises in
contributions up to an initial rate
of 17%
Up rating mechanism for average
salary indexing will be CPI not RPI
which means the pension you
finally receive will be vastly
devalued from a final salary
equivalent.
13
Proposed new pension scheme
Cap n’ Share
• This means that the employers
percentage of contribution to the
pensions are frozen whilst the
employees contributions rise at
regular intervals
• There will come a time when
members of the scheme pay a
higher contribution rate than the
employers
14
Proposed new pension scheme
Fire Fighters are a special case
Public sector pensions (England,
Job
Firefighter (FPS)
Police (Old scheme)
Police (New scheme)
Firefighter (NFPS)
NHS
Local government
Teacher
Civil servant
Military
Contribution as % of salary
11%
11%
9.50%
8.50%
5% - 8.5%
5.5% - 7.5%
6.40%
1.5% - 3.5%
0%
Private sector workers average around 5.2%
15
Fire Fighters are a special case
The FPS was reviewed and reformed in 2006
• The NFPS was introduced for new joining
members in 2006
• The rest of the public sector cannot claim
the same and as such we should be exempt
from further changes as we’ve already
modernised
It is highly likely we can force the government
to rethink this second round of cuts for FF’s
but it will take more than words to do so....
16
Consultation & Action
The government has concluded consultation
with the TUC on its proposed public
sector pension cuts.
It will now start 3 months of union specific
consultation.
We must show the government we are not
prepared to roll over before they make the
statutory changes to the pension schemes
after the consultation period ends.
We must all support the model resolution.
The time to fight back has arrived.
17
thank you