Report of the Assistant Director People Services

The Panel received a report from the Assistant Director People Services which informed Members of the further developments in the situation relating to McCloud/Sargeant judgement on Age Discrimination.  The report set out how the Service was able to proceed with future and past retirements that were immediately affected and included the Service’s legal position as well as identifying the scope and risks.

The Payroll, Pensions & HR Assurance Manager Panel briefly introduced the report reminding Members that at its previous meeting the Panel had agreed that ESFRS should pay under Immediate Detriment, wherever possible, to those in scope at that time under that informal guidance.  He added that since then the Fire Brigades Union (FBU) had been successful in bringing about tribunal cases which had led to an agreement by the FBU and the Local Government Association (LGA), through a Memorandum of Understanding on a Framework, recommending how services proceed with regard to paying pension benefits and compensation under Immediate Detriment to both retrospective and prospective retirees.  The Panel was being asked to consider adopting the Immediate Detriment Framework, as attached at appendix 3 to the report.  The Panel could choose not to follow the Framework, however this would lead to a severe risk of litigation. 

The ADR/T added that in terms of financial impact, there was significant risk but it could not be quantified at present.  The Service and West Yorkshire Pension Fund (the pension fund administrators) were already incurring additional costs in relation to administration and software.  There was also the possibility of tax charges and claims relating to injury to feelings, the cost of which would have to be borne by the Authority.  Additional guidance from Her Majesty's Revenue and Customs on tax charges was expected.  Due to the level of uncertainty, there was currently nothing provided for in reserves for the additional costs.  A bid could be made for funds from the corporate contingency or General Balances.  It was expected that the costs associated with the administration of the remedy would be borne by the Service whilst monies owed to members would be met by government.  The additional impact on employers contribution levels had not been taken into account in the latest Comprehensive Spending Review as it fell outside of the period but the Sector continued to lobby Government to fully fund all of these additional costs.

The Payroll, Pensions & HR Assurance Manager highlighted that resources were a challenge given the 90 calendar day deadline from application by the member/dependent to payment of benefits, as set out in the Immediate Detriment Framework.  The Panel asked further about resourcing and whether an automated system was available or being developed, whether there was a short-term solution or if there was opportunity to outsource processes.  The ADR/T responded that discussions were taking place at a national level on the upgrading of the software packages used to administer FPS to facilitate the remedy.  Officers were exploring options to use Excel spreadsheets  to semi-automate aspects of the ID process.  Availability of staff with the level of expertise and knowledge required was a challenge.  Options, such as employing temporary lower level resource to do volume processing which could then be overseen by specialist staff, were being considered.

RESOLVED: That the Panel agrees to payment under the Immediate Detriment Framework and allowing those Firefighters’ Pension Scheme members in scope to be offered payment under their legacy pension scheme regulations.