Agenda item

HR Manager Jayne Hutchinson presented the report to members.

The Public Service Pensions Act (PSPA) 2013 introduced the requirement to have a Local Pension Board (LPB) to assist in the governance of the Scheme. The Board had no remit as a decision-making body but was established to assist Lancashire Fire and Rescue Service (LFRS) as the Scheme Manager to fulfil its functions which covered all aspects of governance and administration of the Firefighters’ Pension Scheme (FPS).  The Combined Fire Authority delegated its functions to Bob Warren, then Director of People and Development. Although he had retired from that role, due to the current complexity and pension agenda relating to the Age Discrimination and Part Time Workers remedies which had resulted in the implementation of new pension and HMRC legislation and the development of new policy, he had continued assisting in the pension’s activity for an interim period. 

Work Programme during 2024/25

The focus of pension workload during this year had been reported to the Local Pension Scheme Board and was primarily a continuation of the work on the implementation of the following major projects:

·         The Sargeant/McCloud judgement related to age discrimination, this arose after the implementation of the Firefighters’ Pension Scheme 2015 and followed a successful challenge by the Fire Brigades Union (FBU) of age discrimination in relation to the protections put in place for existing members.

·         Matthews’s judgement affecting on-call members commonly referred to as the ‘Second Options Exercise’. This arose following a legal challenge around on-call firefighters who were eligible to join the pension scheme from the start of employment.

Sargeant/McCloud Age Discrimination Remedy

During the first quarter of 2024/25 Lancashire Fire and Rescue Service (LFRS) completed the pay, tax and contribution data for almost 1,000 members affected by the age discrimination remedy. This allowed the services pension administrator, the Local Pensions Partnership Administration (LPPA) to issue Annual Benefit Statement – Remediable Service Statements (ABS-RSS) to active employees. 50 active employees did not receive ABS-RSS due to a number of reasons principally caused by late or non-receipt of Government guidance. As a result of this it was necessary for the Scheme Manager to report a breach of statutory duties to The Pensions Regulator (TPR).

368 Immediate Choice members (retired before 1 October 2023 with legacy scheme service) were due to receive an Immediate Choice Remediable Service Statement (IC-RSS) before 31 March 2025. 54 individuals did not receive the IC- RSS due to data processing difficulties and late notification of government guidance and the Scheme Manager notified the Pensions Regulator of this breach in statutory procedures as required. The Pension Scheme Manager in accordance with the legislative procedures also notified the Pensions Regulator that due to the necessary government guidance not being issued it was necessary to defer the deadline for the issuing of the IC-RSS for 64 individuals. The reasons for many of the delays was due to the need for the Matthews remedy to be enacted and resolved before the McCloud correction could be progressed. 

Individuals who were not going to receive their RSS statement were individually notified before the deadline.

The Pensions Regulator had acknowledged the breaches and deferment and currently had not requested any further information.

The failure to issue both the ABS- RSSs and the Immediate Choice Remediable Service Statement (IC- RSSs) applied across all Fire Authorities in respect of the Firefighter pension schemes. Lancashire’s performance in conjunction with close liaison with the services pension provider was significantly better than most Fire Services.

The service was endeavouring to progress the outstanding IC-RSSs as soon as possible. It was anticipated that all the IC-RSSs would be issued by 31 July 2025.

Matthews Second Options Exercise

The Service had identified over 600 existing and former members of staff who were eligible to express an interest in the exercise to allow members to join or purchase additional pension under the Modified Pension Scheme. The Service had made reasonable endeavours to contact all eligible members, this had involved sending several follow-up letters to each individual where necessary using their last known address. As many individuals left LFRS employment over 20 years ago this had also involved the use of a tracing service to ‘track down’ individuals at their current address. To date 400 individuals had responded, and the Service continued to make repeated attempts to contact individuals.

Calculations for the exercise were complicated and, in a small number of cases, required data going back as far as the 1960’s and 1970’s. To date approximately 270 calculations/options packs had been sent to members. This work would continue into 2025/26.

Measures were currently being explored to reduce the timeframe of putting the resulting pensions into payment. 

Internal Dispute Resolution Procedure and Pensions Ombudsman

In 2020/21, the Service implemented the pensionable allowances project, retrospectively applying backdated pensionable allowances for six years to existing and former employees who had worked a range of duty systems where allowances were previously non-pensionable. As a result of this, the Service had received a number of Internal Dispute Resolution Procedures (Appeals) from employees and former employees. All applications were from members who were dissatisfied that they were not included in the pensionable allowances exercise due to the backdating period or the non pensionability of their pay associated with the temporary nature of their role. The Board had also been informed about a number of complex cases that had been dealt with at Stage 1 and Stage 2 over this period, including through the Internal Dispute Resolution Procedure (Appeals). The Service had now been contacted from the Pensions Ombudsman regarding a number of cases, information had been provided but no Pensions Ombudsman outcome had yet been advised.

Pensions Dashboard

The Pensions Dashboard Programme continued to publish regular updates and newsletters in the leadup to the pension schemes beginning their connections in April 2025. The services connection date had been advised as 31.10.2025.

The Board continued to focus on key areas identified by the Pensions Regulator and maintained an oversight of the key risks to the fund. The Risk Register had continued to be reviewed at Board meetings. The service was involved in the LPPA project plan for implementation that was on track.

Risk Register

A key activity of the Local Pensions Board during the year was monitoring and reviewing the Firefighter Pensions Risk Register.

In response to a question from Councillor D Smith in relation to the 31 July 2025 deadline for IC-RSSs to be issued, Jayne Hutchinson confirmed that the LPPA had set out a program up to October 2025 with different pension categories still awaiting guidance. Councillor D Smith asked if all pensions would be paid by October 2025, the DCFO explained that the timeline had slipped and was out of the services control, he acknowledged that LPPA had done all that they could. Jayne Hutchinson added that there were two providers of the pensions system Civica and Heywoods. Heywoods had not built a solution meaning that manual calculations were required, the service used Civica. The DCFO added that fire and rescue services were only one part of the pensions issue. Jayne Hutchinson added that she met fortnightly with the LPPA and the scheme manager met with the LPPA monthly.

In response to a question from County Councillor J Tetlow in relation to the financial impact, Jayne Hutchinson confirmed that the different pension schemes afforded different benefits but previous tax relief and interest had to be considered. The DCFO added that the service had received government grant funding meaning there had been no impact on the budget position. He added that the previous day crewing plus pension (DCP) remedies did have a financial impact on the service and any cases that were upheld by the Pension Ombudsman would have a financial impact on the authority.

The Chair requested that any information received in relation to pensions be distributed to members of the committee to help newer members gain an understanding of the background information.

Resolved: That the Committee noted the report.