2010 News

New financing system for police/fire pensions introduced from 1st April 2010

In October 2008, the Scottish Government and Convention of Scottish Local authorities (COSLA) reached agreement on the extra funding needed to offset pressures on the police service and the fire and rescue service caused by a record number of retirements. As part of that agreement, a way forward on reforming the funding arrangements for police and fire pensions was negotiated.

As a result a Steering Group was set up to progress the police and fire pension reform project. The Steering Group consists of representatives from:

  • The Scottish Government
  • Association of Chief Police Officers in Scotland (ACPOS)
  • Chief Fire Officers Association (Scotland) (CFOA(S))
  • Police Conveners Forum
  • Fire Conveners Forum

In addition to the Steering Group, a Working Group was established in order to manage the changes required to introduce the new financial arrangements. The Working Group is made up of members from:

  • The Scottish Government
  • CFOA(S)
  • Local Authority Directors of Finance

The members of both the Steering Group and the Working Group support the new financial arrangements and guidance has been issued that outlines the new procedures. Briefly under the new arrangements, firefighter pension costs (with the exception of injury benefits and ill-health capital charges) will be met through a combination of employee contributions, a new actuarially-based employer's contribution calculated as a percentage of pensionable pay and, as required, a "top-up" payment by the Scottish Government. Authorities will be required to set up and maintain a new pension account into which defined income will be made for example member and employer contributions and out of which pensions in payment will be made. Any shortfall between the pension account income and expenditure will be met by top up payments from the Scottish Government and any surpluses will be taken into account as part of future pension funding.

The agreed guidance was issued under Scottish Fire Circular 2/2010.  Work is now under way to draft the necessary regulatory changes to both the fire schemes and it is planned that the draft Scottish Statutory Instruments will be issued for consultation in May 2010. 

This release is now on the Scottish Government website, here:


Link to Scottish Government Website