20 May 2015
5,000 retired firefighters will be compensated after not receiving the pensions that they were entitled to.
The Pensions Ombudsman said that the Government Actuary’s Department (GAD) failed to review commutation factors within the firefighters’ pension scheme.
Commutation allows a member of a pension scheme to forfeit part of their pension for an immediate, lump sum payment.
Retired firefighter William Milne was chosen as a test case. When Milne retired in 2005, the commutation terms for those enrolled in the 1992 Firefighters Pension Scheme had been in use since 1998. Despite a recommendation by GAD that they be reviewed three years after their implementation, no review had taken place in 2001, or after.
The ombudsman ordered that Milne’s commutation factor be reviewed, and that he be compensated for any loss of money or tax liability.
Matt Wrack, FBU general secretary, said: “This is a significant victory for retired firefighters.
“As the outcome has just been announced the FBU will be looking at the details and discussing the decision with its legal advisors.”
A HM Treasury spokeswoman said; “The government accepts the Pensions Ombudsman’s determination in full and will ensure that the directions made in relation to Mr Milne are taken forward in due course,” she said.
“The government recognises that there may be other individuals who are potentially affected by the principles set out in this determination. Firefighters’ and police pension schemes across the UK will work to identify such affected individuals and ensure that appropriate payments are made.”