15 May 2019
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The States Employment Board (SEB) has today lodged an appeal against a decision by the Royal Court on the SEB’s pension dispute with the Jersey Fire and Rescue Service Association (FRSA). The SEB believes there are errors of law that the Court of Appeal should have the opportunity to consider.
Following States Assembly approval, a new Career Average pension scheme was introduced into the public sector in 2016. The FRSA claim that, when compared to the previous final salary scheme, the new scheme cost its members more in contributions and paid out less in benefits.
The SEB accepts this. However, the new pension arrangements were introduced by the States Assembly to maintain a sustainable, defined contribution pension scheme for public sector workers. As people are living longer, the previous pension scheme was becoming more expensive.
Unions representing all pay groups were consulted as the new pension scheme was developed, and unions balloted their members on whether to support the introduction of the scheme. The FRSA was the only union to reject the scheme.
The FRSA took a case to the Jersey Employment and Discrimination Tribunal, claiming that the SEB should have referred the matter to binding arbitration in accordance with their No Impairment of Service Agreement.
The Tribunal found in favour of the FRSA, and the SEB appealed to the Royal Court, which judged that the Tribunal’s decision was correct. Now the SEB has decided to appeal against the decision of the Royal Court, as it believes there are errors of law that the Court of Appeal should have the opportunity to consider.
The Deputy Chair of SEB, Connétable Richard Buchanan, said: “We accept that the career average scheme is less generous than the final salary scheme, but the States Assembly adopted the change, on advice from actuaries, in order to maintain a defined contribution scheme for public sector staff. The employer pays 16% of each employee’s salary into the scheme each month, while employees pay 7.75% or 10.10%. This is still a generous pension scheme and all other unions supported its introduction.
“SEB is pursuing this case through to appeal as we believe it is correct to uphold the right of the States Assembly to introduce progressive public sector pensions’ legislation without the need to compensate pension scheme members for those changes.”
No further comment will be made by the SEB on this case until the matter has been determined by the Court of Appeal.
Background
The Career Average Revalued Earnings (CARE) pension scheme was introduced in 2016 after the States Assembly approved a new law.
Unions representing all pay groups were consulted as the scheme was developed, and all unions subsequently balloted their members on whether the introduction of the scheme should be supported.
FRSA was the only union not to support the scheme, on the basis that its introduction cost its members more and members received reduced benefits compared to the previous scheme. This is not in dispute.
Existing pension scheme members, other than those with a reserved right to stay within the previous scheme due to their proximity to retirement, joined the CARE scheme on 1 January 2019.
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