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Firefighters’ options exercise requires ‘corrective action’ – Law & Regulation

The remedial action covers “special members” — a category created when retained firefighters were made eligible to join the New Firefighters’ Pension Scheme in 2006.

The implementation of the EU Part-Time Workers Regulations determined that these members, employed between July 1 2000 and April 5 2006, were entitled to pension benefits broadly similar to those enjoyed by members of the FPS, with retrospective access to the NFPS granted in 2014.

On April 1 2014, a first options exercise was supposed to be carried out, intended to allow existing and former retained firefighters the opportunity to join the NFPS as “special members” and pay “appropriate contributions” in respect of their service during the relevant period.

However, take-up of the options exercise was not universal, and a July FPS bulletin from the Local Government Association explained that a number of those who elected to become special members during the options exercise, but who subsequently left their contracts with contributions outstanding, had not been served properly by several FRAs.

“The regulations support the fact that the member’s decision to leave should not impact their ability to continue to pay for the cost of past service. If the member leaves, or opts out, they have the option to pay all remaining contributions within three months of the leaving date in order to count all of the service,” the bulletin explained.

Alternatively, members “can continue to pay periodical contributions as a deferred member”.

Though this choice should have been outlined during the first options exercise, the bulletin said that a number of FRAs failed to do so. 

A second options exercise is in the works, after the European Court of Justice’s determination in the O’Brien v Ministry of Justice ruling held that the remedy could extend back before the Part-Time Workers Regulations were required to be implemented. 

On March 9, a memorandum of understanding was reached between the government, the Fire Brigades Union, the Fire and Rescue Services Authority and FRA employers, to be implemented by legislation from the Home Office setting up a second options exercise that will allow affected members to purchase pension entitlements in the FPS as a special members.

However, before that second exercise — expected in 2023 — takes place, the FPS bulletin argued that FRAs should implement the corrective action required by their improper handling of the first options exercise. 

“This will help keep the 2023 options exercise as straightforward as possible,” it explained.

It recommended that FRAs revisit past deferred cases to determine what options (if any) were actually offered, and to confirm which regulatory option applies to each member.

Members who left their contracts within three months should be offered three options: to repay outstanding contributions by a lump sum, to continue with periodic contributions, or be offered a pro-rated pension based on contributions already paid.

Members that left more than three months ago should be offered two options: to continue with periodic contributions, or to take the pro-rated pension.

“Periodic contributions would need to be reviewed and possibly altered to take account of any gaps in the repayment schedule. We believe that the correct regulatory option available is to recalculate the instalments so that the remaining balance is repaid at the original 10-year point,” the bulletin said.

It also stated that FRAs should immediately contact affected members to notify them of the options available to them, and then to notify the scheme administrator of the member’s decision, updating their records accordingly. 

The LGA declined to specify how many members are affected. 

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