Firefighters 1992 scheme
Transfer of pension rights out of the FPS
If you leave the FPS with 3 or more months' service but are not eligible for immediate payment of a pension because you are not old enough nor retiring on grounds of ill-health, as an alternative to a deferred pension you could request that your pension rights should be transferred to some other pension arrangement. A transfer value, a sum representing the capital value of your pension rights, would be assessed in accordance with guidance provided by the Government Actuary and offered to the managers of your new pension scheme. The transfer would take place only if you so instruct.
Transfer of pension rights within the FPS
If you leave your employment with your current fire and rescue authority and transfer to further employment as a firefighter with another authority, provided there is no break in service between employments, you would remain a member of the FPS. Although your pension rights will normally transfer with you, payments of transfer value are not exchanged between English fire and rescue authorities. The authority you leave would simply send a statement of your accrued pension entitlement to your new authority.
However, if you leave to take up employment as a firefighter in Scotland, Wales or Northern Ireland, a transfer payment would be paid because different funding arrangements apply. Provided there is no break in service between employments you would be subject to the FPS rules of the relevant country.
If you do not want to be a member of the FPS1992 you can opt out at any time by giving written notice to the authority. The notice would take effect from the following pay day.
Under FPS1992 rules, a member:
- with less than 3 months' service when the notice takes effect would receive a refund of any contributions he/she had paid;
- with 3 months' or more but less than 2 years' qualifying service, would have a choice of a refund or a transfer of accrued pension rights to another pension arrangement;
- with 2 or more years' service would have entitlement to a deferred pension or a transfer of accrued rights to another pension arrangement.
Because the FPS1992 became a closed pension scheme in April 2006, a person who opts out now will usually have more than 2 years' service and so would qualify for the deferred pension or transfer option.
On opting out, you would cease to have any further cover under the FPS1992 (other than that provided by any deferred pension). You would, however, continue to be covered by the provisions of the Firefighters' Compensation Scheme in the event of a qualifying injury.
If you subsequently change your mind and wish to rejoin the FPS1992 you would not be permitted to do so. Instead, according to your eligibility, you would be allowed to join another suitable pension scheme provided by the fire and rescue authority. Also, under “automatic enrolment” requirements introduced by the Pensions Act 2008 and which impact on all UK employers, the authority will have to periodically re-enrol you into a pension scheme. (You would have the right to opt out again if you wish.)
Seek independent financial advice if you are thinking about opting out of the FPS1992.
You would save the cost of contributions but would probably pay more by way of tax (contributions attract tax relief). You and your dependants would cease to have the cover which active membership of the FPS1992 provides.
You will be automatically opted back in to the scheme on your Fire and Rescue Authorities auto enrolment re-enrolment date. If you are either re-enrolled or choose to opt back in to the scheme you may join the FPS2015 and not FPS1992, depending on your protection status.
If you leave your employment as a firefighter and you
- have at least 2 years' pensionable service or, if less, have had a transfer of personal pension rights into the FPS, and
- are not eligible for immediate payment of an age retirement pension because you are not old enough and/or do not have the required length of service, and
- are not retiring on grounds of ill-health,
then you would be entitled to a deferred pension. You would also be entitled to a deferred pension if you opt out of the FPS while still in employment provided you have at least 2 years' pensionable service or have had a personal pension transfer into the FPS.
A deferred pension is calculated by first assessing the "hypothetical" pension a person would have received if their pensionable service had been continuous to normal pension age (55) or to age 60 for a firefighter in the role of Station Manager B and above. Then the hypothetical pension is "pro-rated" according to the period actually served.
For example if you would have completed 30 years at normal pension age and your average pensionable pay at the date you leave is £27,000, the first part of the assessment of the deferred pension would be to work out the hypothetical pension as follows:
(20 x 1/60) + (10 x 2/60) x £27,000 = 40/60 x £27,000 = £18,000.00 a year
If your actual pensionable service at the date of leaving was 5 years, then the deferred pension would be 5/30ths of the hypothetical pension:
5/30 x £18,000 = £3,000.00 a year.
Part of the annual pension can be commuted to provide a lump sum if you wish.
Any part-time service would be taken into account after the whole-time deferred pension has been assessed.
If, in the previous example, 3 of the 5 years you had served were whole-time and 2 were half-time, the part-time deferred pension would be:
5 × £3,000.00 = £2,400.00 a year
A deferred pension is put into payment at age 60. It can be paid earlier if the firefighter becomes permanently disabled for performing any duties appropriate to his/her former role. Or, if you wish, it could form the basis of a transfer value paid to some other pension scheme. This would include the New Firefighters' Pension Scheme if you subsequently take up further employment as a firefighter and are eligible to join the New Scheme.
Can I have a refund of contributions?
A refund can be paid only if you:
- have less than 2 years' qualifying service in the FPS, and
- a transfer of personal pension rights has not been paid into the Scheme.
If you are eligible for a refund, this would be the total of all the contributions that you have paid. There would be no payment to you of any employer's contributions. Deductions would be made from the refund in respect of:
- the certified amount of any Contributions Equivalent Premium due; this is a payment that has to be made to "buy" you back into the State Second Pension – while a member of the FPS you will have been contracted out of that element of the State pension scheme; and
- tax – under current HM Revenue and Customs rules this is currently 20% in respect of the first £10,800 refunded and 40% in respect of any amount in excess of £10,800.
Because the FPS became a closed scheme in April 2006, it is unlikely that any serving members would now be entitled to a refund.