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, whether the net pay deductions from the salaries of Ministry of Defence fire fighters and fire officers reflect the full difference in the value of pension benefits accrued compared with staff of similar grades working for local authorities.

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 Defence Fire and Rescue Service (DFRS) personnel to allow for the differences between their pension arrangements and those of Local Authority Fire and Rescue Service ("LAFRS") employees.

For Fire-fighter grades the abatement figure is a comparison of member contribution rates between the Civil Service Pension Schemes and the Local Authority Fire Pension Schemes. The abatement calculation makes allowance for the impact on the value of pension benefits which arises because MOD Fire-fighters pensions are based on an abated salary. The calculation of the abatement ignores differences in pension benefits accrued between the schemes being compared.

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 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 current NPD rate was introduced in 1993 and according to available information the calculation of the NPD ignores differences in pension benefits accrued between the schemes but may have taken account of wider pay issues.