Firefighters 2006 scheme – Active

Ill-health pension

Ill-health pension

A firefighter who has at least 3 months qualifying service and who is permanently disabled for the performance of the duties of his/her role may be considered at any age for an ill-health pension. There are two tiers of ill-health award:

• a lower tier award which provides a lower tier ill-health pension based on the formula:

1/60 x pensionable service x final pensionable pay

• a higher tier award which provides a lower-tier ill-health pension as shown above plus a higher tier ill-health pension based on the formula:

(2% x pensionable service) x prospective pensionable service to 60 × final pensionable pay 
              60              

The higher tier award is made where the firefighter has at least 5 years' qualifying service and is permanently disabled from undertaking regular employment.

For example, a firefighter aged 50 who has completed 12 years' service and whose final pensionable pay is £30,000 retires on grounds of ill-health with a lower tier award. He would receive immediate payment of a pension of –

12/60 x £30,000 = £6,000 a year

If, instead, he is given a higher tier ill-health award, the higher tier pension would be:

(2% x 12) x 10 x £30,000/60 = £1,200 a year

In total, the higher tier ill-health award would be:

£6,000 (lower tier pension) + £1,200 (higher tier pension) = £7,200 a year

A lower tier, but not a higher tier ill-health pension can be commuted to provide a lump sum.

What if you are a retained firefighter?

A serving firefighter who has at least 3 months qualifying service and who is permanently disabled for the performance of the duties of his/her role may be considered at any age for an ill-health pension. There are two tiers of ill-health award:

• a lower tier award which provides a lower tier pension
• a higher tier award which provides a lower tier pension plus a higher tier pension

The higher tier award is made where the firefighter has at least 5 years' qualifying service and is not only permanently disabled for the performance of the duties of his/her role as a firefighter but is also permanently disabled from undertaking regular employment.

"Qualifying service" is the "calendar" length of Scheme membership. For example, if a retained firefighter has been a member for 5 years from 1 July 2009 to 30 June 2014, he/she will have sufficient service to qualify for a higher tier award regardless of the length of pensionable service to be used in the pension formula.

The lower tier ill-health pension is based on the formula:

1/60 x pensionable service x final pensionable pay

For a retained firefighter, the lower tier pension would be assessed on similar principles to those used in the assessment of an age or deferred pension. The method of assessment of a higher tier ill-health pension, particularly for a retained firefighter, is a bit more complicated. It is based on a proportion of prospective service, i.e. the service the firefighter will not be able to achieve because of the ill-health retirement. This is the formula:

(2% x A) × (A x C) 
   B    × D 
60

where:

A is the pensionable service accrued in the Scheme before ill-health retirement, i.e. assessed on similar principles to the pensionable service used in an age or deferred pension calculation

B is qualifying service, i.e. calendar length of Scheme membership

C is the pensionable service that the firefighter would have accrued from the date of ill-health retirement until normal retirement age (60) had he/she continued to be a contributing member of the Scheme as a whole-time regular firefighter

D is the final pensionable pay ("reference pay")

For example, if a retained firefighter has been a member of the Scheme for 16 years (16 years' qualifying service), has 4 years pensionable service credited up to the date of leaving and – if a whole-time regular firefighter – would have completed a further 12 years' pensionable service by normal retirement age and would have final pensionable pay of £29,501.37, the higher tier ill-health pension would be assessed as –

(2% x A) × (4 x 12) 
                       16    × £29 501.37 
                                         60          = £118.01 a year

It would be added to the lower tier ill-health pension to form the higher tier ill-health award.

A lower tier, but not a higher tier ill-health pension can be commuted to provide a lump sum.