Agenda item

(a)      Information about Immediate Detriment

(b)      LGA’s Immediate Detriment risk register

(a) Information about Immediate Detriment

CG explained that the HO had issued informal guidance on Immediate Detriment in August 2020.  In effect, the Guidance suggested that before Remedy is introduced into the Regulations (from 1 April 2022), FRAs could pay FPS members their individual legacy scheme benefits on retirement if the member preferred this to 2015 Scheme benefits.  The Guidance referred to members who would not be eligible for an ill-health pension in the 2015 Scheme but would have been entitled under the pre-2015 Schemes, as well as members coming up to retirement who could be better off retiring from the legacy schemes than the 2015 scheme.

The LGA had advised the HO against issuing this informal guidance on Immediate Detriment due to the contradictions it contained and complexity (of implementation) it ignored.  The guidance created difficulties for FRAs in suggesting they should not follow the existing law as set out in the FPS Regulations.  In normal circumstances, FPS benefits can only be paid in accordance with the legislation in force; an informal guidance note cannot “trump” the law.

However, the legal landscape changed with an Employment Appeal Tribunal case in February 2021 which ruled that FRAs could not rely on the Schedule 22 (of the Equalities Act 2010) defense.  It required FRAs to make a decision whether to apply the Immediate Detriment (ID) guidance.

CG explained that, if implementing ID, FRAs were also required to make a judgement on treatment of employee and employer contributions due, and interactions with the tax regime. The ID guidance required members to acknowledge that they may owe money back to the FRA once the Remedy legislation was in place.

A disclaimer was being drafted by HM Treasury for FRAs’ use, so that members could confirm in writing that they would repay money, if required.

The Board noted that no option (in the decision to follow or not follow ID guidance, and the practicalities of implementing ID) was without risk for FRAs and members.

(b) LGA’s Immediate Detriment risk register

CG referred the Board to risk 2 on the LGA project management approach to age discrimination remedy, namely knowingly working without legislation, policy and software development. The consequences of doing so included acting ultra vires, use of manual calculations, risk of complaints regarding incorrect payments, duplication of workload.  She highlighted that those risks were high, and controls and mitigations available to FRAs would have limited effect.

There were risks if ID guidance was implemented, and risks of challenge if it was not.

HS reported that Immediate Detriment cases were being processed by WYPF for 4 out of 19 Fire clients and this number (of FRAs) was likely to increase over time.

Legal advice had been obtained by WYPF prior to processing and making any payment under Immediate Detriment on behalf of a Fire client.

CG had discussed with the Chair the importance of ascertaining NCC’s plans on Immediate Detriment.  The Board’s responsibility is to assist the Scheme Manager in compliance with the Regulations, and NCC’s decision making process on Immediate Detriment should be reviewed by the Board.

In answer to a question, CG explained that the NCC Fire and Rescue Service was aware of the FPS members approaching retirement.  A policy decision needed to be made on ID by the Scheme Manager to ensure consistency of approach.

HS left the meeting at 11.09 a.m.