Agenda item

The Director of People and Development (DoPD) and HR Manager – Pay, Pensions and Performance presented the report to members which provided oversight and the latest information on pension issues in respect of uniformed officers of the Fire Service.

 

Internal Disputes Resolution Procedure (IDRP) – Stage 2

Lancashire Fire and Rescue Service (LFRS) had several cases that had previously progressed through both stages of the IDRP process. These related to the payment of pensionable allowances within LFRS. Some members remained dissatisfied, particularly regarding the limitation of backdated allowances to six years or the classification of allowances as non-pensionable when applied to temporary roles. The Pensions Ombudsman had contacted the Service regarding these cases. While LFRS had provided the relevant information, no formal outcomes had been received to date.

 

A further IDRP application had recently been submitted for consideration by the Committee. This was related to the Age Discrimination Remedy (McCloud/Sargeant).

 

Firefighter’s Pension Scheme Member Contribution Structure Consultation

During 2024/25 the government conducted a consultation on proposed amendments to the Firefighters’ Pension Scheme (England) Regulations 2014. The objectives of the consultation were to:

• achieve the target yield of 13.2% of pensionable pay over 1 October 2025 to 31 March 2027, and future valuation periods.
• update the member contribution structure to encourage scheme participation and reduce opt-outs.
• ensure the member contribution structure was administratively sustainable.
• ensure due regard to the Public Sector Equality Duty.

 

On 8 December 2025, the outcome was published confirming that, with effect from 1 April 2026, the contribution structure would be amended as follows:

• An additional band would be introduced, increasing the bands from four to five.
• Contributions would be based on Actual Pay rather than Wholetime Equivalent (WTE) pay. This would be a change for part-time and on-call firefighters, whose banding would now be based on their actual pay instead of the WTE for their role.
• From April 2027 the bandings would be increased each April in line by consumer price index (CPI) to allow for futureproofing.

 

This change affected all employees who were members of the Firefighters’ Pension Scheme 2015, resulting in either an increase or decrease in employee contributions. This change had been communicated to employees.

 

FRA’s were expected to have an appropriate policy in place to determine employee contribution bandings.

 

Information Consultation on the Firefighters’ Compensation Scheme for injury and death

The Local Government Association (LGA) launched an informal consultation on 6 March 2026 relating to the Firefighters’ Compensation Scheme (FCS). The FCS provided compensation for injury and death, in the form of an injury pension or gratuity for firefighters who were permanently disabled or died as a result of an injury received in the exercise of their duties. The consultation formed part of an initial review commissioned by the Ministry of Housing, Communities and Local Government (MHCLG) to ensure the scheme remained fair, effective and reflective of the modern firefighting role. The information consultation period ended on 14 April 2026.

 

Age Discrimination Remedy (McCloud/Sargeant)

In 2015, the government introduced new laws which resulted in a new pension scheme for firefighters - the Firefighters' Pension Scheme 2015 (FPS 2015). These laws included protections which meant that some members of the existing schemes (FPS 1992 and FPS 2006) didn't join FPS 2015 either straight away or at all, depending on their age. Following a legal challenge known as McCloud/Sargeant, the courts determined that the protections given to members were age discriminatory.

 

From 1 April 2022 all existing employees who were members of the pension scheme were moved to the reformed scheme, FPS 2015. The service was currently implementing retrospective remedy, providing eligible members with a choice to receive legacy pension benefits (FPS 1992 or FPS 2006) or reformed pension benefits (FPS 2015) for the period of discrimination (01.04.2015 – 31.03.2022).

 

The implementation of retrospection involved a statutory requirement to issue a Remediable Service Statement (RSS) to all members affected by age discrimination by 31 March 2025. This was a requirement for all public service pension schemes and had been a challenge across the sector. The table below showed the breakdown of the RSSs issued and the numbers outstanding which had been updated since the agenda reports had been published.

 

	Total Cases	Number Issued	Not Issued
Pensioners (including ill-health cases)	357	308	49
Pensioners (Beneficiaries of deceased members)	12	0	12
Actives	328	301	27
Deferred	181	157	24
	878	766 (87.25%)	112

 

The delay in issuing RSSs was due to a range of factors, including the delay in the issue of final government guidance, data processing challenges, software defects and the need to enact the Part-Time Workers remedy (Matthews) before progressing with McCloud related options.

 

The Pension Scheme Manager reported a breach to The Pensions Regulator (TPR) in relation to cases where guidance was available, but the Local Pensions Partnership Administration (LPPA) failed to issue an RSS. As part of this breach, an action plan was developed with LPPA to ensure the issue of the outstanding RSSs. The remainder of the RSSs were expected to be issued by 31 March 2026, with the beneficiary calculations being issued by 30 June 2026.

 

LPPA continue to prioritise the issue of RSSs but had reported a risk in relation to 54 of the 80 outstanding Immediate Choice (IC)-RSSs. 31 of these cases had an interaction with the Matthews part-time remedy, LPPA were currently experiencing production issues and were working with their software suppliers to resolve this issue. LPPA had informed LFRS that these IC-RSSs would not be issued by the 31 March 2026 deadline. A further 23 cases were at risk of not being issued, most of these cases related to data validation errors. LPPA would make every effort to issues these cases by 31 March 2026 and were prioritising unprotected and taper protected members, but these cases were complex to resolve and required specialised resource requirement from LPPA. The Scheme Manager had provided an update to The Pensions Regulator in relation to this breach and would provide a further update following the 31 March 2026 deadline.

 

73 IC members had opted for alternative pension benefits. LPPA commenced the payment of retrospective pensions in October 2025, and 59 members had had their pension adjusted as at the end of February 2026. LPPA continued to process payments for the remaining 14 pensioners.

 

A number of IC members had yet to make their election. The 12-month deadline for many of these members was approaching at the end of March 2026. If these members failed to decide by the 12-month deadline, a deemed election would be made by the Scheme Manager, this decision was irrevocable. LPPA and LFRS were making efforts to contact these members, particularly the tapered or unprotected members ahead of the deadline date.

 

The Service acknowledged the concerns of affected former firefighters and was actively working with LPPA to ensure the remaining IC-RSS statements were issued to members by 31 March 2026 and to bereavement cases by June 2026.

 

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

 

The failure to issue RSSs had applied across all Fire Authorities in respect of the Firefighter pension schemes. Indications across the public sector pension schemes and the fire sector suggested that LPPA remained ahead of the position nationally in terms of the implementation of remedy. 

 

Contingent Decisions

The firefighter remedy regulations provided for some decisions made by members during the remedy period to be revisited. This included decisions to opt out of the pension scheme and whether a firefighter would have purchased additional years in their legacy scheme had they been allowed to remain in it. 

 

LFRS had received 16 contingent decisions opt-out claims, which had been accepted by the Pension Scheme Manager. 11 of the 16 contingent decisions were from members purchasing service under the Part-Time Workers remedy (Matthews 2). A contingent decision was a decision taken by a member who may have taken a different decision if there had been no changes to the pension scheme. These individuals were due to be issued with a Contingent Decision Remediable Service Statement (CD-RSS) so that they could decide whether to make an election to opt back into their legacy scheme for the remedy period. These were yet to be issued as the Contingent Decision guidance from the Local Government Association (LGA) had been withdrawn. Questions raised by the LGA, trade unions and employers in relation to the contingent decision provisions in remedy legislation were yet to be resolved. The Home Office had taken legal advice to provide clarity over which pension schemes were available for individuals to opt back into.

 

Further guidance from the LGA to scheme managers was published in September 2025. This guidance allowed for members who opted out of the FPS 2006, or where an FPS 1992 member opted out during remedy period and did not rejoin during the remedy period to be processed. All other types of cases remained on hold pending further guidance.

 

Part Time Workers (Matthews 2) Remedy

The Matthews remedy for part-time workers involved a series of steps to ensure that On Call firefighters could access pension schemes.

 

The Service had identified over 600 existing and former employees who were eligible to express an interest in joining or purchasing additional pension under the Modified Pension Scheme. Reasonable endeavours had been made to contact all eligible individuals, including multiple follow-up letters and the use of a tracing service. These efforts were on-going.

 

To date, 420 individuals had expressed an interest, and 355 calculations/options packs had been issued. The calculations could be complicated and, occasionally requiring data going back as far as the 1960’s and 1970’s. So far, 259 individuals had elected to join or purchase additional pension.

 

LPPA had implemented a process to facilitate backdated pensions to Special Pensioner Members. These were On Call firefighters who were employed between 7 April 2000 and 5 April 2006. They were eligible to join the Firefighters Pension Scheme 2006 with retrospective membership to the start date of their employment, which for a small number of these cases dated back as far as the late 1960’s. Payments began in March 2025, with 106 individuals having received backdated lump sum and pension payments to date. 

 

The historical nature of these claims, including reverting back to the individuals original ‘date entered service’, posed difficulties in respect of service progression and payroll information. Issues over tax treatment had also not been resolved.  

 

As a result of the difficulties and issues that had arisen, the Government had undertaken a consultation. This consultation considered making changes to the original legislation including extending the deadline. The outcome of the consultation was published on 4 December 2025; it was expected that the legislation would come into effect no later than 1 April 2026. It was anticipated that the legislation would include a 12-month period from the date of publication in which fire authorities and pension administrators must fully implement the legislation and resolve outstanding cases.

 

The proposed amendments related to deceased members, the payment of additional death grants and conversion options. The fire authority would need to review cases from both the first and second options exercises.

 

An area that remained of some concern was no mechanism had been finalised to deal with aggregation. This was where an on-call employee subsequently achieved a wholetime role and would wish to combine both pension scheme benefits. Unless an agreement was reached by the government and Fire Brigades Union (FBU), the issue of disqualifying breaks in service would need to be addressed through the legal process in 2026 before aggregation would be dealt with in 2027. The Authority had agreed to the LGA proposal to jointly participate with other Fire Authorities in cost sharing in respect of any legal costs. The three case types to be resolved were:

 

·         Retained duty system (RDS) firefighters who, without a break in service, changed to become whole-time firefighters at some stage between 7 April 2000 and 6 April 2006, and who joined the FPS 1992 in respect of their wholetime service.

·         RDS firefighters who, without a break in service, changed to become wholetime firefighters on or after 6 April 2006, and who joined the FPS 2006 Standard scheme in respect of their wholetime service.

·         Firefighters with concurrent retained and wholetime service.

 

The national Scheme Advisory Board (SAB) had written to HMRC to highlight their concerns that no ‘spreading mechanism’ had been put in place for members affected by the Matthews remedy receiving pension backpay, over a number of years, taking them into a higher tax bracket. A spreading mechanism had been put in place for employees affected by the McCloud/Sergeant Age Discrimination remedy.

 

In addition, the SAB were engaged with MHCLG in relation to a compensation framework, to assist employees and former employees with tax advice and the potential costs of reopening an estate for a deceased member.

 

Resources

In addition to the LFRS resources, the LPPA had increased their resource to deal with this workload. Both sections were working extensively on age discrimination and part-time workers remedy in addition to the business-as-usual workloads.

 

It was likely that the government would extend the deadline for completion of the Part-Time Workers (Matthews 2) exercise to March 2027; this would allow for LFRS to complete existing workloads and any required changes as a result of the legislative changes. 

 

The challenge of implementing two significant, complex pieces of pension legislation, affecting large numbers of individuals concurrently was not to be under-estimated.

 

To create capacity sufficient for the implementation of the above two projects, the Temporary Pensions Coordinator role was filled on a casual basis and the postholder was predominantly supporting the administration of the Part Time Workers (Matthews 2) exercise. This temporary post continued until 31.03.2026. 

 

Dashboards

The Pensions Dashboard Programme continued to publish regular updates and newsletters in the lead-up to the pension schemes beginning their connections in April 2025. The connection date for public sector pension schemes into the central digital architecture was 31 October 2025.  LPPA’s completed connection of schemes to the dashboard’s infrastructure by 15 December 2025.

 

Following this connection, the government would issue LPPA with a Dashboard Available Point (DAP). This was the date when the pension dashboard would become publicly available. This date was set by the Secretary of State for Work and Pensions and would provide a minimum of six months’ advance notice.  In preparation for this date, LPPA would continue to cleanse member records, verifying data calculations and ensuring matching criteria were correct.

 

The Pension dashboard Programme (PDP) had published an updated draft of its reporting standards and opened a consultation on the changes. The update explained how pension schemes and providers would need to send daily reporting data to Money and Pension Service (MaPS) using a software interface, but it did not change what data must be collected or reported. The proposed deadline to implement the new standards was 30 November 2026, and the consultation was open until 25 March 2026. LPPA’s Dashboards Working Group intended to respond to this consultation.

 

Councillor D Smith remarked that this was a complex and challenging subject and thanked officers for explaining the content of the report well.

 

Resolved: That the committee noted the report and its implications for pension administration and member communication.