Rachael Maskell – 2016 Parliamentary Question to the Ministry of Defence

The below Parliamentary question was asked by Rachael Maskell on 2016-09-02.

To ask the Secretary of State for Defence, how net pay deductions from the salaries of Ministry of Defence fire fighters and fire officers are calculated.

Mark Lancaster

The Net Pay Deduction (NPD) for Fire Officer grades, or abatement in the case of Fire-fighters, is the adjustment to the salaries of DFRS personnel to allow for the differences between their pension arrangements and those of Local Authority Fire and Rescue Service (LAFRS) employees. Ministry of Defence (MOD) Fire-fighter and Fire Officer grades are members of the Civil Service Pension Schemes and the Principal Civil Service Pension Scheme (PCSPS), whereas LAFRS staff belong to Local Authority Fire Pension Schemes (LAFPS).

The MOD Fire-fighter abatement is a single blended abatement figure based on a weighted comparison of member contributions rates between the PCSPS and the LAFPS. The abatement calculation makes allowance for the impact on the value of pension benefits which arises because the MOD Fire-fighter pension is based on an abated salary. The calculation of the abatement ignores differences in pension benefits between the schemes being compared.

The pay abatement level for Fire-fighters is calculated on behalf of the MOD by the Government Actuary Department (GAD). The current abatement of 7.1% is being reviewed by GAD to take account of the introduction of the new Civil Service Pension Scheme on 1 April 2015 and the Local Authority Fire-fighters Pension Scheme 2015.

For Fire Officer Grades the NPD has been calculated primarily by considering the differences in member contribution rates between the different pension schemes. The current NPD was implemented in 1993 and according to available information the calculation ignores differences in pension benefits accrued between the schemes but may have taken account of wider pay issues. The current NPD is 5.9% of pre-tax basic pay. In practice, an adjusted NPD, equal to 3.54% of pre-tax pay, is applied to Fire Officer salaries. This does not reduce the tax payable by the officer. For Fire Officers the NPD does not affect the salary used for pension purposes, so both pension benefits and member contributions are calculated based on salary before application of the NPD.

The MOD is currently reviewing the rate of the NPD for Fire Officer grades.