Firemens Pension Scheme 1992 · CAS-84083-M5S5

CAS-84083-M5S5

Ombudsman’s Determination Applicant Mr R

Scheme Firemen’s Pension Scheme 1992 (the Scheme)

Respondents South Wales Fire & Rescue Authority (the Authority) Rhondda Cynon Taff County Borough Council (the Council)

Complaint Summary Mr R has complained about the Authority’s maladministration in failing to implement an amendment to the Firemen’s Pension Scheme Order (1992) (the 1992 Order). He asserts that he has suffered a financial loss because of the Authority’s maladministration.

Summary of the Ombudsman’s Determination and reasons

1 CAS-84083-M5S5 Detailed Determination Material Facts

Mr R was born in September 1962. He was previously employed by the Fire and Rescue Service (the Service) and was an active member of the Scheme from 19 September 1988, until he retired in June 2018.

Mr R said that in February or March 2018, he was informed verbally by the Director of People Services (the Director), that, as of 1 April 2018, the Authority would be implementing an amendment to how retirement benefits were calculated. Temporary promotion salary would no longer be used in the calculation of retirement benefits, instead an APB would be used.

At the time, Mr R’s substantive post was ‘Group Manager B, Competent.’ He was temporarily promoted to the role of Area Manager in the Operational Risk Department (Area Manager), from 14 June 2017 until his retirement.

In March 2018, Mr R had applied for the permanent role of Area Manager. Mr R’s application was unsuccessful. His colleague, Mr S(1), was appointed instead.

In April 2018, the Service issued a bulletin (the Bulletin) to members of the Scheme. This informed members that if they retired after 1 April 2018, new rules concerning

1 Relevant sections of the 1992 Order are in Appendix 1. 2 Details of the Old and New Rule B5C are detailed in Appendices 2 and 3.

2 CAS-84083-M5S5 how temporary promotions would be treated for pension calculations, would be implemented.3

Mr R said that during a debriefing on the appointment process, after he was unsuccessful in his application for the Area Manager post, the Chief Fire Officer (CFO) informed him that he was next on the list to be appointed to the role of Area Manager. The CFO also informed Mr R that as there had been four appointable candidates, there would not be another recruitment process for the Area Manager post in the near future. The CFO said that the Assistant Chief Fire Officer (ACFO) would be retiring within the next 12 to 18 months, and Mr R would then be appointed to the next Area Manager position.

Mr R also said that during his conversation with the CFO, the CFO had pointed out that if he were going to retire in the near future, it would have been more beneficial for him to retire in June of 2018 rather than September 2018 because in doing so he could rely on nine months “of his temporary [Area Manager] pension.”

Following this, Mr R requested retirement quotations showing the benefits he could receive if he retired in June or September 2018.

On 13 April 2018, the Council sent Mr R the quotations. There were no disclaimers included with the quotations. The quotation with a retirement date of 15 June 2018 (the Quotation), stated Mr R’s final salary as £68,923.04 and showed that the benefits he would receive at this retirement date were:-

On 1 February 2019, the Service wrote to Mr R (the February Letter). A summary of the February Letter is detailed below in paragraphs 20 to 30.

3 Details of the Bulletin are in Appendix 4.

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On 12 February 2019, the Service sent Mr R a further letter, detailing the outcome of the Authority’s meeting held the day before. This letter said the Authority had determined that:

4 The three recommendations are detailed in Appendix 5.

5 CAS-84083-M5S5 Subsequent to this letter, Mr R made a complaint through the first stage of the Scheme’s Internal Dispute Resolution Procedure (IDRP). A summary of his IDRP stage one complaint is detailed below, in paragraphs 33 to 44.

Mr R submitted that his decision to retire on 14 June 2018 was heavily influenced by his personal knowledge of the Scheme at the time, advice and pension calculations provided to him. These were all based on the premise that his temporary promotion salary as an Area Manager would contribute to his pension calculations. During debriefing discussions with members of the panel, following his unsuccessful application for the permanent role of Area Manager, he was informed that if he was going to retire in the near future, it would be more beneficial to retire in June rather than in September 2018. In doing so, he would be able to rely on nine months of higher salary for his pension calculation.

Following receipt of the retirement quotations, he considered his options. These were:-

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Summary of Mr R’s position

5 A summary of Mr R’s schedule of loss is detailed in Appendix 6.

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The correct test in respect of loss as a result of negligent misstatement is set out in Corsham and Others v Police and Crime Commissioner for Essex and Others [2019] EWHC 1776 (Ch) at paragraph 173 per Morgan J. As a result, the following questions should be asked on the balance of probabilities:-

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6 Hanif v Middleweeks [2000] Lloyd’s Rep. PN 920 at [14] per Mance LJ 7 See Appendix 6.

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Summary of the Authority’s position

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8 Hirtenstein v Hill Dickinson LLP [2014] EWHC 2711 and PCP Capital Partners LLP and another v Barclays Bank plc [2021] EWHC 307 9 Mr R provided a new statement to TPO from the CFO. A summary of the CFO’s statement is detailed in Appendix 7. 15 CAS-84083-M5S5

10 Mr R provided reasons for this view using his net salary loss between June and September 2018 as an example to demonstrate the interest he believes is payable. 16 CAS-84083-M5S5

Subsequent to the Decision, there were further exchanges between Mr R, the Authority and TPO.

On 19 March 2025, I sent Mr R and the Authority my second Preliminary Decision (the Second Decision) on this complaint.

The Authority did not submit any comments in response to the Second Decision.

Mr R did not accept the Second Decision and made some additional comments, which have been summarised below.

Summary of Mr R’s submissions in response to the Second Decision

Mr R submitted that had he not been provided with incorrect information then not only would he have remained in employment and obtained the substantive role of Area Manager, he would also have progressed to the role of Area Manager Competent prior to his retirement.

Mr R provided details of some of the challenges and experience he had gathered during the 12 month period he was temporarily promoted as Area Manager, and he provided a further statement from the CFO. He also provided some additional comments, and these have been summarised below:-

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The Authority did not respond to Mr R’s further comments. TPO contacted the Authority to inform it that, on the basis of Mr R’s further submission and evidence, I was minded to find that he would have been incrementally promoted from development to competent between 1 May and 1 September 2019, with attendant consequences for the redress calculation. Despite being informed that, in the absence of a response or further submissions, I would proceed to issue my Determination, the Authority did not respond.

Conclusions

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11 Musawi v Bevis Trustees [2009] 055 PBLR - [2009] EWHC 1915 (Ch) at para 16 NHS Business Services Authority v Leeks & Ors [2014] EWHC 1446 (Ch) at para 59 NHS Pensions Agency and another v Pensions Ombudsman and Beechinor [1997] OPLR 99 at 102 Westminster City Council v Haywood [1998] Ch. 377 at 394

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At the time of his retirement, Mr R was three months away from accruing 30 years’ pensionable service in the Scheme. Prior to his retirement, the quotation he had received from the Council with a retirement date of September 2018 showed that Mr R would receive lower benefits than he would receive, if he retired in June 2018 instead.

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12 See paragraph 86 above. 13 See paragraph 13 above.

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For me to decide whether Mr R would have progressed to the grade of Area Manager Competent prior to his retirement on 30 September 2020, I need to consider whether it is more likely than not that Mr R would have attained the required evidence to demonstrate the relevant competencies to progress to the grade of Area Manager Competent.

Mr R has said that to progress from Area Manager Development to Area Manager Competent is not a promotional process, it is an evidenced based managerial developmental process while in role. This characterisation of the process has not been challenged by the Authority.

Mr R asserts that he would have been able to use challenges and experiences he had gathered during the 12 month period he was temporarily promoted to the Area Manager role as evidence in his Development to Competent portfolio. In support of his assertions Mr R provided details of the experience and evidence he had gathered during that period and a further supporting statement from the CFO.

Mr R further asserted that knowing the Service’s policies and procedures as well as he did, along with the evidence he gathered while temporarily promoted in the Area

14 See Appendix 1.

23 CAS-84083-M5S5 Manager role, he would have qualified for Area Manager Competent at best within the first six months of his permanent promotion, at worse by the end of his first year in post.

The Authority presented no evidence on this point, despite receiving the notice referred to in paragraph 102 above. The CFO, in his statement which Mr R submitted as part of his post Second Decision submissions said:-

“In the year [Mr R] was temporary Area Manager he had extensive strategic experience in both the operational and managerial aspect of the role. He was assessed competent in safety critical command decision making, which is a highly pressurised command assessment.

Having worked with [Mr R] on the Senior Management Team whilst he was temporary Area Manager, and reviewing the evidence [Mr R] has provided, I have no doubt whatsoever that if [Mr R] had remained in post and been substantively promoted to Area Manager he would have progressed from development to competent within a short time frame of within the first six months of his promotion…

[Mr R] was a valuable and well respected senior officer at the Service; his experience, knowledge and leadership skills stood him out above the others.”

The evidence before me on this point is not fully aligned. In Mr R’s original submissions, he asserted that he would have achieved the competent grade “after” a year at the development grade. He later described 12 months as a “worst case scenario.” The CFO has submitted that Mr R could have expected to be promoted to competent in six months. I consider then that the evidence sets out, broadly a “worst case scenario” of more than 12 months and a “best case scenario” of six months.

A finding that he would have achieved competence at 12 months is compatible with all the evidence. However, a finding that it would have occurred after only six months is not compatible with Mr R’s initial witness statement because he referred to promotion “after” a year in the development role. I have taken into account the CFO’s evidence, and I acknowledge that, at the time, Mr R would have been in post. I have also taken into account the Authority’s lack of response or submissions on the point.

However, in order to find that Mr R would have been promoted to competent in six months, I would need to be able to find that the best case scenario was more likely than not to have occurred. I do not consider that I can safely reach this conclusion because a best case scenario is inherently less likely than a non-best case scenario, and would require higher cogency of evidence than I have before me. On that basis, I find, on the balance of probabilities, that had Mr R not retired on 14 June 2018 and had been substantively promoted to the role of Area Manager on 1 October 2018, he would have progressed to the grade of Area Manager Competent twelve months after being appointed on 30 September 2019. This is sooner than Mr R originally submitted but later than the date in the “best case scenario”. I find that Mr R would also have

24 CAS-84083-M5S5 remained at the Area Manager Competent grade until he retired on 30 September 2020.

Overpaid pension contributions and higher spouse’s pension

Maladministration

Directions

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Dominic Harris

Pensions Ombudsman 3 July 2025

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“…

PART G

PENSIONABLE PAY AND CONTRIBUTIONS

G1 Pensionable pay and average pensionable pay

(1) Subject to paragraphs (2), (9) and (10), the pensionable pay of a regular firefighter is the aggregate of—

(a) the amount determined in relation to the performance of the duties of his role (whether as a whole-time or part-time employee) other than those amounts payable to him in respect of the benefits within rule B5C(5); and

(b) the amount (if any) of any benefits which are pensionable under rule B5C(1).

(2) …

(3) The average pensionable pay of a regular firefighter is, subject to paragraphs (5) to (7C), the aggregate of his pensionable pay for the year ending with the relevant date.

(4) The relevant date—

(a) for the purposes of rule C7 (spouse’s or civil partner’s award where no other award payable), and the Compensation Scheme, is the date of the person’s last day of service as a regular firefighter, and

(b) for all other purposes of this Scheme, is the date of the person’s last day of service in a period during which contributions were payable under rule G2.

(5) Subject to paragraphs (6) and (7), if he was in receipt of pensionable pay for part only of the year ending with the relevant date, his average pensionable pay is the aggregate of his pensionable pay for that part multiplied by the reciprocal of the fraction of the year which that part represents.

(6) For the purposes of paragraphs (3) and (5), any reduction of pensionable pay as a result of any—

28 CAS-84083-M5S5 (a) sick leave;

(b) stoppage of pay by way of punishment;

(c) ordinary maternity, ordinary adoption or paternity leave;

(ca) parental bereavement leave;

(d) paid additional maternity or additional adoption leave; or

(e) unpaid additional maternity or additional adoption leave where contributions have been paid under rule G2A,

shall be disregarded.

(7) If the amount determined in accordance with paragraphs (3) to (6) is less than it would have been if the relevant date had been the corresponding date in whichever of the two preceding years yields the highest amount, that corresponding date shall be taken to be the relevant date.

(7A) The average pensionable pay of a regular firefighter who—

(a) is entitled to a long service increment; and

(b) retires after 30th September 2006 and before 1st October 2007, or becomes entitled to a deferred pension under rule B5 within that period,

shall be calculated—

(i) as if his long service increment had accrued at the rate of £990 per annum (disregarding the reduction in the amount of the long service increment that had effect in relation to times on and after 1st October 2006), and

(ii) disregarding any LS-related payment.

(7B) The average pensionable pay of a regular firefighter who—

(a) is entitled to additional pension benefit under rule B5B (additional pension benefit: long service increment), and

(b) retires on or after 1st October 2007,

shall be calculated on the basis of whichever of the following paragraphs yields the greater amount—

(i) the calculation is made with regard to the amount credited to him under rule B5B, but without regard to his long service increment and any LS-related payment, or

29 CAS-84083-M5S5 (ii) the calculation is made with regard to his long service increment and any LS-related payment, but without regard to the amount credited to him under rule B5B.

(7C) The average pensionable pay of a regular firefighter shall be calculated without reference to any additional pension benefit credited under rule B5C (additional pension benefit).

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“B5C Additional pension benefit: continual professional development

(1) A regular firefighter who, in any CPD year beginning with the year commencing on 1st July 2007, receives CPD payments, shall be credited with an amount of additional pension benefit in respect of that year.

(2) Subject to paragraph (3), the amount of additional pension benefit in respect of a CPD year shall be determined on 1st July immediately following the year in question in accordance with guidance and tables provided by the Scheme Actuary.

(3) Where the Retail Prices Index for the month of September preceding the relevant tax year is higher than it was for the month of September in the CPD year in question, the amount of additional pension benefit for that CPD year (as calculated in accordance with paragraph (2) and, if applicable, this paragraph) shall be increased by the same percentage as the percentage increase in the Retail Prices Index.

(4) Any increase in accordance with paragraph (3) shall be applied with effect from the first Monday of the relevant tax year.

(5) In this rule—

“CPD payments” , as regards a firefighter, means payments made to him by his employing authority in respect of his continual professional development;

“CPD year” means a period of 12 months beginning with 1st July in which a firefighter is in receipt of CPD payments;

“tax year” means a tax year in relation to which—

(a) the amount of a firefighter’s pension benefits is calculated for the purposes of this Scheme, and

(b) he is not in receipt of a pension under this Scheme or entitled to a deferred pension under rule B5;

and a tax year is a relevant tax year in relation to a particular CPD year if it is the tax year in which CPD payments for that CPD year are taken into account; and

“tax year” means the period of 12 months beginning with 6th April.”

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“…

B5C Additional pension benefit

(1) Where a fire and rescue authority determines that the benefits listed in paragraph (1) are pensionable, and in any additional pension benefit year pays any such pensionable benefits to a regular firefighter, the authority shall credit the firefighter with an amount of additional pension benefit in respect of that year.

(2) Subject to paragraph (3), the amount of additional pension benefit in respect of that year shall be determined on 1st July immediately following the year in question in accordance with guidance and tables provided by the Scheme Actuary.

(3) The amount of additional pension benefit determined in accordance with paragraph (2) shall be increased on the first Monday of the following relevant tax year by the same amount as any increase which would have applied if that additional pension benefit were a pension to which the Pensions (Increase) Act 1971 applied and the beginning date for that pension were the 1st July of the tax year immediately before the relevant tax year.

(4) For the avoidance of doubt, the increase of additional pension benefit in the tax year 2010/2011 shall be increased by the same percentage as the percentage increase in the Consumer Prices Index in September 2010 with effect from Monday 11th April 2011.

(5) The benefits referred to in paragraph (1) are—

(a) any allowance or supplement to reward additional skills and responsibilities that are applied and maintained outside the requirements of the firefighter’s duties under the contract of employment but are within the wider functions of the job;

(b) the amount (if any) paid in respect of a firefighter’s continual professional development;

(c) the difference between the firefighter’s basic pay in their day to day role and any pay received whilst on temporary promotion or where he is temporarily required to undertake the duties of a higher role;

(d) any performance related payment which is not consolidated into his standard pay.

(6) In this rule— 32 CAS-84083-M5S5 “additional pension benefit year” means the period of 12 months beginning with 1st July in which a firefighter is in receipt of any of the benefits listed in paragraph (5).

“the beginning date” means the date on which the pension is treated as beginning for the purposes of section 8(2) of the Pensions (Increase) Act 1971;

“following relevant tax year” means the tax year after the relevant tax year, in relation to which the member is not a pensioner member or entitled to a deferred pension under rule B5;

“relevant tax year” means a tax year in relation to which—

(a) the amount of a firefighter’s pension benefits determined under this rule for the purposes of this Scheme is taken into account for tax purposes, and

(b) the firefighter is not in receipt of a pension under this Scheme or entitled to a deferred pension under rule B5; and

“tax year” means the period of 12 months beginning with 6th April.”

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Appendix 4 Details of the South Wales Fire and Rescue Service HR Bulletin 2018 (05)

“Title: Firefighters’ Pension Scheme 1992 (FPS 1992) (Amendment to Rule B5C)

The Firefighters’ Pension (Wales) Scheme (Amendment) Order 2014 came into force on 31 December 2014 and made retrospective amendments from 1 July 2013 to the Firefighters’ Pension Scheme 1992 (FPS 1992).

The Order introduced a new Rule B5C – Additional Pension Benefit to the FPS 1992. This new Rule requires the Fire Authority to take a decision on whether temporary promotion for members of the 1992 Scheme is pensionable or non- pensionable (if pensionable then the calculation of pension will be made on an Additional Pension Benefit (APB) basis).

At the Fire Authority meeting held on 26 March 2018, the Fire Authority took the decision not to introduce the new Rule B5C – Additional Pension Benefit on a retrospective basis to 1 July 2013, but to make all temporary promotion pensionable on an APB basis with effect from 1 April 2018.

The effect of this decision is that:

Active members of the 1992 Scheme who are temporary promoted on or after 1 April 2018 will have their pension calculated on an APB basis from this date forward.

Active members of the 1992 Scheme who have been temporary promoted after 1 July 2013, but before 1 April 2018, and their retirement date is more than 3 years since the temporary promotion, will have their period(s) of temporary promotion calculated on an APB basis.

Active members of the 1992 Scheme who have been temporary promoted prior to 1 April 2018, and can retire within 3 years of the 1 April 2018, will still be able to use any period(s) of temporary promotion as part of the best of their last 3 years to benefit from the increase in salary in their final salary pension calculation, hence leaving existing and future pension benefits in the position they are currently at the point of retirement.

It should be noted that for this group if an individual chooses not to retire within 3 years of 1 April 2018, then their pension calculations will be based on the new Rule 34 CAS-84083-M5S5 B5C – Additional Pension benefit and have any previous temporary promotion recalculated and applied on an APB basis.

Date of Bulletin issue: 29 March, 2018…”

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“The first recommendation is that the Fire Authority confirms that temporary promotions are pensionable, and that this decision is applicable from the effective date of the new Rule B5C, i.e. 1 July 2013.

The second recommendation is that the Fire Authority adjust all future pension payments made after 31 March, 2019, to ensure they are calculated and made on the APB basis.

The third recommendation is that the Fire Authority does not recover any overpayment of lump sum or pension made prior to 1 April, 2019.

The second and third recommendations are based on the principle that there is already a precedent set in respect of recovering pension overpayments in the public sector. The general approach taken by public sector pension schemes to this issue has been to reduce future pension payments to the correct level going forward and to waive the repayment of any historic overpayments to avoid financial hardship to members.”

36 CAS-84083-M5S5 Appendix 6 Mr R provided detailed calculations of the past losses he believed he incurred between 14 June 2018 and 12 April 2022. He also provided a summary of the future losses that he believes he will incur. A summary of these losses is detailed below.

Past loss

15 This is Mr R’s best estimate figure. 16 This figure is the amount after Mr R deducted the pension payments he had actually received during the same period. 37 CAS-84083-M5S5 Appendix 7 A summary of the Statement from the previous Chief Fire Officer of the South Wales Fire and Rescue Service

“…I retired as the [CFO] in April 2024. I provide this statement as a true and accurate record of accounts and sequence of events centering around [Mr R] and the promotion process to Area Manager of South Wales Fire and Rescue Service facilitated in 2018 (sic).

In the early part of 2018 a vacancy arose to the role of Area Manager, which due to the infrequency and low number of positions in the Service the promotion services for this role were facilitated on in ‘just in time’ and needs basis only. The promotion process was a multi stage process with eligible candidates applying but few being successful at the conclusion.

Prior to the promotion process [Mr R] approached me for a professional discussion on his future. He was concerned that he may not be seen as a credible candidate for promotion to Area Manager as he was approaching 30 years service (sic). I reassured [Mr R] that the promotion process would be fair and equitable for all, and if successful with his length of service he would bring significant experience to the Senior Management Team. In fact at this time he was temporary promoted to Area Manager and was performing extremely well in role leading the Operational Risk Management function (sic). With this reassurance [Mr R] made the decision to apply for the promotion process and stated to me that he would if successful, he would give a two year commitment to the Service.

The Area Manager process in 2018 provided four successful candidates, which then made up a promotion list for the Service to use to fill vacancies as they arose in the next year or two. The successful candidates in result order were:

[Mr S(1)]

[Mr R]

[Mr S(2)]

[Mr S(3)]

[Mr S(1)] was appointed with immediate affect to the vacancy that arose as a result of [Mr N] retiring (sic). All candidates we debriefed on their performance and were advised on where they were on the Area Manager promotion list. As part of the debrief discussion I had with [Mr R] we discussed his good performance at the assessment centre, his ongoing strong performance in role as temporary Area Manager and that he was in a strong position for an Area Manager vacancy as he was 2nd on the list. As [CFO] succession planning and scenario planning is a strong requirement to ensure the Senior Management 38 CAS-84083-M5S5 Team continues to function with a diversity of colleagues. Based on the knowledge and assumptions I made I anticipated the [ACFO] …would likely retire in the next 12-18 months. I shared this with [Mr R] and I advised him to ‘keep his powder dry’ and see how the next 12 months materialise, which may bring him a substantive promotion to Area Manager.

Regrettably in June 2018 [the ACFO’s] family circumstances changed dramatically and he tendered his intention to retire at the end of September 2018. In this period of time I was aware that [Mr R] had received pension estimates from the Services’ pension administrator, and ultimately made a decision to retire based on the pension estimates he received. On 1st October [Mr S(2)] who was third on the promotion list was substantively promoted. If [Mr R] had not made the decision to retire he would have been substantively promoted instead of [Mr S(2)]…”

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