Here is the pension money trail in plain English and how eventually it ends up in your pension pocket, or some of it.

Go here.

During the last financial year 2012-2013 the DCLG and 46 FRS between them spent £666 million on fire pension payments in England only. See the government’s own Report on the Firefighters’ Pension Fund, Income and Expenditure, 2011-12 & 2012-13, England;

This £666m expenditure only covers the 46 English Fire Authorities but does not include those Fire Service Veterans receiving their pensions in Scotland, Wales, and Northern Ireland who are paid by their devolved Assemblies, but these Assemblies nevertheless receive their annual Top-Up grant from the central Exchequer so £666m is not an total figure for the UK.

This is simply because Fire Service Veterans whilst in service signed up to a Statutory UK-wide Fire Service Pension Scheme which was in existence before the devolution of these Assemblies occurred.

The Firefighters Pension Scheme (the old ’92 Scheme) and the New Firefighters Pension Scheme (the new 2006 Scheme) are both statutory, tax approved, unfunded, final salary occupational pension schemes.

Statutory-In plain English this means the Schemes are set up with Parliament’s approval; Tax-approved by the Treasury(who also approve the Scheme benefits) for tax at source purposes;for tax free commutation; unfunded means the Firefighters’ Pension Schemes have no assets to cover their liabilities-in other words every year starts with the Schemes bankrupt; final salary – it pays a correct final salary upon retiring from the Fire Service or on compulsorily retirement(for whatever reason).

As an original concept in the early 1970’s it was all quite wonderful. The NJC Employers annually deducted the 11% from every Firefighter’s salary and then the NJC Employers would add their 21.3% contribution to the income pension pot. In effect the Firefighters and their NJC Employers would between them pay 33% the cost of the Scheme and the government as a part of its Contract with its Firefighters would pay the balance, 66% of the cost of the Scheme .

This wonderful bounty of income from the Firefighters/NJC Employers would be wisely invested on behalf of the government and the communities and when the pension time came the Fire Authority would be able to pay their pension retiree their justly well earned, and it may be added, their correct pension and off the Fire Service Veteran would walk into the sunset and the Fire Authority would not notice his financial passing because of their wise forethought and investment. At least that was the theory.

 From the 1970’s until the representative bodies eventually gave up in despair the government/NJC Employers were repeatedly advised and encouraged to the point of distraction to invest this joint pension pot along with the Firefighters for the collective rainy day, but they never did. They spent all this joint income. In addition in their institutionalised incompetence every year they sold off more of the ‘family silver’ to make up for an  increasing pension deficit. Little wonder that today local Fire Authority coffers are empty.

 Though this dire situation is not helped by Chief Fire Officers double dipping, or in the case of the government’s own Fire Adviser Holland triple and quadruple dipping in the future; and also paying themselves the handsome figure of 11% bonuses(effectively letting the taxpayers pay their pension contributions for them) for ‘efficiently’ managing this controlled terminal pension crash; allied with Councillors e.g. in Lancashire giving themselves a 42% pay rise, it is little wonder that the Fire Service is in the parlous financial state it is.

Unbridled self-serving greed always has consequences usually for others who correctly manage to live within their own budgets.

So how do these well paid Councillors control the negative budget of the Firefighters Pension Fund if that is not an oxymoron?

Each FRS is required to have a specific account known as the ‘Firefighters Pension Fund’. An account which controls and records all transactions involving fire pensions under their delegated local jurisdiction. It is also required for local, national audit, and public accounting purposes. Under the current financing arrangements monies paid into this Fund are, in the main, contributions from serving Firefighters and their NJC Employers, and monies paid out from it in expenditure are in the main-the paying fire pensions to Fire Service Veterans.

In theory at the beginning of each financial year all FRS Firefighters Pension Fund accounts balance sheet starts at zero because it has no assets to cover its liabilities. It is bankrupt.

However to function, each FRS Pension Fund has to have some money in their Firefighter Pension Fund to commence the financial year in April and so a certain amount of money (proportional to the number of pensions each FRS estimates it has to pay out in the forthcoming year) is provided by that FRS with a loan to the Fund to ‘pump prime’ the payment of fire pensions in the new financial year, otherwise no FSVs would ever get paid in advance in late March/April !

This also means that these Funds are perpetually running in deficit/loss or in other words they are perpetually bankrupt throughout the year. At the year end, which is one year behind this expenditure, each FRS then states to the DCLG how much monies in total it has spent on fire pensions and the DCLG, when satisfied, then pays them an 80% ‘Top-Up’ grant of this amount in taxpayers money leaving the remaining 20% to be paid by income from local taxes(again the taxpayer).

It is an important point that only pension payments are topped up in the is manner. Central government refuse to pay for Injury Awards which have to be borne by the local taxpayer/Fire Authority.

The original Top-Up chart for  Grant payment to each English FRS in 2012-2013 is prepared by the DCLG, whilst remembering that in this chart the Top-Up grant money paid to a particular FRS by the DCLG(Taxpayers) is just 80% of the claimed total expenditure for the preceding year by each named FRS. Go here

For 100% of the total expenditure claimed each named FRS just add 20% to this final figure; or to save the Reader the time the Morning Bugler has done the calculation and amended the DCLG chart-accuracy not guaranteed;

Go here.

 As a working example Lancashire was paid £10,333,245.0 by the DCLG in Top-Up grant for the year 2012/2013; to this then add 20%, i.e., £2,066,649m making a total of £12,399,894.0 which is the total expenditure by taxpayers for providing Lancashire’s Firefighters’ Pension Fund which it claims it spent on fire pensions payments.

 So back to the government’s balance sheets.

It is a spurious and deliberately deceitful point by the current Fire Minister to claim that for every £1 the Firefighter contributes the taxpayers contributes £5 pounds.  

The fact of matter remains that if the FRS were the efficient finance managers of taxpayers monies they would have us all believe they are and had taken the investment advice that they had been repeatedly offered over the decades prior, this £5 to £1 ration need not have arisen, or if it did, it would have been a considerably smaller ratio. But is this ratio figure remotely true or is it government propaganda?

In the financial year 2012 to 2013 the total outlay for England on the Pension Schemes amounted to £666 million. Firefighters contributed £297 million to this pot and unless the Editor’s mathematics have gone awry this come to a ratio of £2.24 to £1. So where did the Fire Minister get his £5-to-£1 ratio?

We must conclude, like statistics, that there are lies, damned lies, and a Fire Minister’s public statement…

As ever this coalition government, like governments of all colours, insist on blaming the victim for their gross incompetence, especially the poor and those who can actually make their personal balance sheet work. It is hardly a novel stance…

Next as we read and digest the government’s own Report we see the pigeons coming home to roost as we conclude that this coalition government and its ministers can only complete half a mathematical equation when it fails to think its way through the complete cycle which is clearly demanded in balancing any budget.

Income to this Pension Fund principally from the joint contributions of the Firefighters and the NJC Employers, as a proportion of expenditure fell yet again in 2012-2013.

In 2008-2009 the pension fund’s income from its Firefighters and the NJC Employers was 56% of its expenditure.

In 2012-2013 the pension fund’s income from its Firefighters and the NJC Employers was only 45% of its expenditure.

How can this Fund continue sliding down into ‘bankruptcy’ when it is already perpetually bankrupt and what caused this dramatic shift down?

And in the meantime who will continue to pick up the bill, for this deficit, the taxpayer(including the Firefighters).

So what else does this report tell us?

In the game of consequences, forgetting the safety of the Public which it seems the government are happy to do, the plain fact of the matter is that if this coalition government aided by its ‘stakeholder partners’ ceased closing fire stations and as a consequence reducing the number of Firefighters it requires, the pool of Firefighters they need to pay pension income contributions would not as a consequence shrink either, would it? It is simpler to place this increased burden of contributions on the Firefighters who remain.

What privileged school did these people learn their maths and economics in?

So is this just so much hyperbole?

Applying this ludicrous central government logic fully leads to the point where if they close every Fire Station and sack every Firefighter, who is going to make the pension contributions to help pay the fire pensions of those who for the past decades governments have been happy to take pension contributions from, but who unfortunately are living longer and now quite rightly insist that they require their pension paying without any further whinging, moaning, or Uria Heap hand wringing.

The answer of course of who picks up this final bill is, the weary taxpayer(including the Firefighters)…

In 2012-2013 Report the expenditure-less income which equals deficit( the red and widening gap) has widened from £259m to £370m an increase of £111m  which is a whopping increase of 43%.

In plain English this dramatically illustrates that if these ‘stakeholder partners’ drastically reduce the number of Firefighters helping to pay for the government’s Firefighters Pension Fund who will the government transfer this growing like Topsy pension finance burden to?

The answer of course, once more is, the taxpayer(including the Firefighters)…

How is that for good economics and easing the burden on the taxpayer?

 Lest there be doubt the Report goes on to state that in 2012-2013 in this disastrous game of consequences and whilst making the Firefighters pay more in contributions the NJC Employers still had to pay 2% more in contributions from local tax payers just to attempt make up this Pension Fund shortfall.

And where did they get this money from, the local and national taxpayers(including the Firefighters at both levels).

Even the horses in the paddock are laughing amongst themselves.

In raw Titanic terms…those who were bailing out the sinking Titanic Pension Fund were either fired, pensioned off, short changed, or simply had enough and jumped ship. Those unfortunates who remain have had their terms and conditions so brutally dis-incentivised that there is no incentive to complete their service and thus they will leave transferring what little of their personal pension fund they have managed to accumulate with them.

The rising graph of pension transfers in this report tells us so.

Neither is there an incentive for anyone in their right minds to join the Fire Service. Where there is risk serving their fellow Citizen then there must be incentive to protect those taking the risk against injury or paying the final price.

The 1992 Scheme was fair minded and did just that providing it was correctly applied.

The 2006 Scheme was a ‘brown paper and vinegar’ greedy man’s charter by which a cynical government broke its word, its honour , and its Contract  with its Firefighters.

It still wanted the protection; the courage; and the resilience of those who were prepared to put themselves in harm’s way but it was unwilling to pay the insurance premium.

Consequently more Citizens will die in emergency situations and as a consequence their human and intrinsic ‘value’ to this ‘big society’ will be lost for ever whilst the Fire Service haemorrhages away morale-less, weary of ‘modernisation’, enraged by seeing the brass neck flaunting of unstoppable greed by their ‘leaders’, and totally dispirited in exhaustion.

Little wonder in calculating the ‘risk against return’ which all Firefighters engage in daily at all Operations it is hardly surprising that they, unlike their illustrious forebears’ service to a Nation with whom they had concluded a fair deal, will rightly conclude that it is simply not worth it…

At the end of the financial year 2013 there were 38,855 Fire Service Veterans receiving a fire pension(s) under the 1992 Pension Scheme(though it is not clear how many are Rule B3 ill-health pensions) and 643 Fire Service Veterans receiving a fire pension(s) under the 2006 Pension Scheme, a grand total of 39,498. DCLG Report – Go here.

Each '92 pension required that it was initially and correctly calculated using the correct applicable formulae provided in law, 1992  SI No:129, when the pension(s) first came in to payment.

During its life time of monthly payments each pension has to be correctly robustly administered, paid, audited monthly and annually, publicly accounted for, and adjusted where necessary by a specialist staff who are expected to be trained and qualified to carry out these specialist tasks. One assumes that the acquisition of these qualifications and skills is ultimately reflected in their salaries.