Update on arrangements for processing Immediate Detriment cases.
Minutes:
MP advised that, since the last Board meeting, there had been significant developments. MP outlined the background to and implications of this issue (the McCloud/Sargeant age discrimination ruling). Ultimately, the remedy would require legislation which was currently in draft form with a view to implementation on 1 April 2022.
Previously, both the LGA and Home Office had issued guidance on progressing immediate detriment cases prior to the legislative remedy being in place. Subsequently, the LGA and FBU had negotiated an Immediate Detriment Framework (IDF) for adoption by fire and rescue authorities and designed to mitigate the risks of further employment tribunals.
In February of this year, the Authority had determined to halt any further transfers from the 92 Scheme and to begin to process “pipeline” cases (i.e. firefighters coming up to retirement) on the basis of firefighters taking all payments from the legacy scheme (should they so wish), subject to agreeing that the associated calculations were provisional and could be subject to change once the final remedy legislation was in place. These calculations would need to be undertaken manually as the software did not yet exist for this.
The IDF also put in place proposals not just for “pipeline” cases (referred to Category 1) but also for Category 2 cases (i.e. those firefighters who had already retired). HMRC had clarified, though, that any adjustments to lump sum payments made more than twelve months ago would be classified as unauthorised payments. Subsequently, the Home Office had advised that, following further work with Treasury colleagues, the technical matters associated with remedy were more complicated than initially thought. Consequently, the Home Office had withdrawn its initial guidance and advised fire and rescue authorities to cease processing any immediate detriment claims until the remedy position was clear. The Home Office had further commented that, given this stance, the government would not cover any costs associated with payments outside of the pension accounting provisions prior to the remedy position being enacted.
The Home Office had also advised that, on basis of a recently-issued HMRC policy statement, any adjustments to lump sum payments more than twelve months old would not be treated as unauthorised payments but only with effect from 6 April 2022. Until this date, the costs of unauthorised payments would fall to the Authority.
The Authority had not, to date, signed up to the IDF and, while the Home Office guidance had been withdrawn, the legal position had not changed. The legal advice obtained by the Authority was clear in terms of action that might be taken to process pipeline cases. Consequently, the Authority was proposing to continue processing “pipeline” cases on the basis already agreed (which was based on the legal advice obtained) and within existing, Scheme rules (e.g. overpayment of contribution refunds) but, in light of the Home Office statement, not to address any cases of firefighters who had previously retired (i.e the IDF Category 2 cases).
Communications on this position would be issued in due course, albeit there had been no formal consultation with representative bodies at this stage. The Service was doing all it could to process those cases it could address in a proportionate and timely manner, within the existing legal framework.
The LGA had commissioned further legal advice which was expected imminently. Once available, this would be reviewed to see whether it impacted on the Authority’s current commission. Additionally, WYPF had been approached with a view to potentially commissioning further legal advice to assist its clients (i.e. fire and rescue authorities).
Concerns had also been raised as to the timeframes proposed by the IDF for addressing immediate detriment cases i.e. having sufficient resourcing available to do this (both internally within the Service and with WYPF).