gototopgototop

Frequently Asked Questions

As pensions are unique to each individual depending on their age, service and contributions it is impossible to answer individual enquiries.  The following questions and online calculator try to answer as many questions about the general provisions as possible.

1. What about lump sums?

Part of a firefighters' pension may be commuted (i.e. exchanged) for a lump sum.  The lump sum arrangements will be calculated in two parts:

 

    • The pension payable under the 1992 Scheme will be able to be commuted by using a commutation factor, which is based on
      the current commutation arrangements for 1992 Scheme members.  The commutation factors will therefore be calculated  in accordance with the relevant commutation tables in force at that time of your retirement.
    • The pension payable from the 2015 Scheme will be able to be commuted at a rate of 12:1 – this means that every one pound of pension can be converted to twelve pounds of lump sum.  The amount of pension exchanged for a lump sum must not exceed one quarter of the pension.

For 1992 scheme members

Firefighters may be able to commute up to a quarter of their 1992 scheme pension provided that when the firefighter is able to retire:

 

    • The firefighter is able to reckon at least 30 years pensionable service or
    • the firefighter retires at or after the Normal Pension Age.  The Normal Pension Age for the 1992 scheme is age 55.

In all other cases the commuted portion must not be such that the lump sum exceeds two and a quarter times the full amount of the
pension.  This would apply to those firefighters who retire between the ages of 50 and up to 55 with more than 25 or more years' pensionable service but less than 30 years.

The lump sum will calculated in accordance with the relevant commutation tables in force at that time of a firefighter's retirement.

For 2006 scheme members

The pension will be able to be commuted at a rate of 12:1 – this means that every one pound of pension can be converted to twelve pounds
of lump sum.  The amount of pension exchanged for a lump sum must not exceed one quarter of the pension.

Firefighter members who transfer to the 2015 scheme

The pension and the lump sum arrangements will be calculated in two parts (based on service in either the 1992 or 2006 schemes and service in the 2015 scheme).

So, for example, the lump sum arrangements for a former 1992 scheme member who transfers across to the 2015 scheme:

 

    • The pension payable under the 1992 Scheme will be able to be commuted, based on the current commutation arrangements for
      1992 Scheme members.  So, for example, a firefighter who retires from the 2015 scheme at age 55 or retires from age 50 with combined continuous pensionable service (in the 1992 and 2015 schemes) of 30 years will be able to commute up to a quarter of their 1992 scheme pension for a lump sum.  The lump sum will be calculated in accordance with the relevant commutation tables in
      force for the 1992 scheme at that time of the firefighter's retirement.
    • The pension payable from the 2015 Scheme will be able to be commuted at a rate of 12:1 – this means that every one pound of
      pension can be converted  to twelve pounds of lump sum.  The amount of pension exchanged for a lump sum must not exceed one quarter of the pension.

Example

A firefighter joins the 1992 scheme at age 25 and completes 20 years pensionable service in the 1992 scheme before transferring across to the 2015 scheme.  The firefighter continues active membership of the 2015 scheme for a further 10 years before retiring at age 55.

Annual Pension earned under the 1992 scheme:        £14,500

Annual Pension earned under the 2015 scheme which reflects an actuarial reduction as it is being paid before the scheme's normal retirement age of 60 :                                             £  3,200

Total Pension                                                          £17,700

As the firefighter has completed 30 years combined continuous pensionable service in the 1992 and 2015 schemes (or you could say that the firefighter has reached the 1992 scheme's Normal Pension Age of 55) then the firefighter can commute up to one quarter of the 1992 scheme pension, under the existing rules of the 1992 scheme, using the commutation factors in force at that time.

Assuming that the firefighter wishes to commute the maximum amount that s/he is able to:

 

For the 1992 scheme pension element:

Maximum amount of pension that can be commuted is a quarter:

£14,500 x ¼ =£3,625

After commutation the 1992 scheme pension will be £10,875 (i.e. £14,500 less the commuted portion of £3,625)

Using current commutation factors for the 1992 scheme (as at July 2013, where the commutation factor for a firefighter who retires at age 55 is 20.8), the lump sum will be calculated as £3,625 x 20.8 = £75,400

For the 2015 scheme pension element:

Maximum amount of pension that can be commuted is a
quarter:

=£3,200 x ¼ = £800

After commutation the pension will £2,400 (i.e. £3,200 less the commuted portion of £800)

The commuted element of pension can be converted  to the lump sum at a rate of 12:1 Lump sum will be £800 x 12 = £9,600

Total annual pension after commutation                    £13275 (£10875 + £2400)

Total Lump sum                                                           £85000  (£75400 + £9600)

2. How do I know what my accrued benefits are?

Benefits will accrue under the rules of your old scheme up to 31st March 2015 or the point that your tapering protection (should you have
it) ends.  After that the value of your benefits based on that protected service will be determined by your salary at the point of retirement.

For members of the 2006 scheme this is simply the number of 60ths you accrued (the 2006 scheme accrues benefit at a rate of 1/60th of your final salary for each year of service) based on your final salary.  The payment of these accrued benefits will be subject to all the rules of your 2006 scheme.

For members of the 1992 scheme, accrued rights are slightly more complicated.  This complication arises from the fact the 1992 scheme has double accrual from 20 years' service.  Effectively members of the 1992 scheme accrue benefit at a rate of 1/60th of their final salary for each year of service for the first 20 years and 2/60ths for each of the last ten years of service.  A member of the 1992 scheme with 30 years' service will therefore have accrued 40/60ths (or 2/3rds) of their final salary as a pension.

3. I am a member of the 1992 Firefighters' Pension Scheme (FPS) and was within 10 years of retirement on 1st April 2012.

All active scheme members who, as of 1st April 2012, have 10 years or less to their current Normal Pension Age will see no change in when they can retire, nor any decrease in the amount  of pension they receive at their current Normal Pension Age.  This protection will be achieved by the member remaining in their current scheme until they retire, which could be beyond 31st March 2022;

All active 1992 scheme members who, as of 1st April 2012, were within 10 years of being able to take an unreduced pension i.e. they were
age 40 or over and had at least 20 years' service, will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current Normal Pension Age.  This protection will be achieved by the member remaining in their current scheme until they retire.

 

4. I am a member of the 2006 new Firefighters; Pension Scheme (NFPS) and was within 10 years of retirement on the 1st April 2012.

If you fall into this category you must be aged 50 or over from 1st April 2012. Your pension provisions have been protected.  There will be no difference to your pension arrangements at retiral i.e. you will remain in the existing scheme.  To secure protection you must remain a contributing member of the scheme until you retire.

 

5. I am a member of the 1992 FPS but was more than 10 years from retirement on the 1st April 2012.

If you were within 4 years of being 10 years or less from retirement or within 10 years or less of being able to take a full unreduced pension on the 1st of April 2012, you will qualify for what is known as tapering protection.  The exact length of the tapered protection afforded depends on individual circumstances..  The latest day for protected service is 31st March 2022.  To retain tapering protection you must remain as a contributing member of the scheme until the date that protection expires.

 

6. I am a member of the 2006 NFPS but was more than 10 years from retirement on 1st April 2012.

If you were within 4 years of being 10 years or less from retirement on the 1st April 2012, you will qualify for what is known as tapering protection.  As retirement age in the 2006 scheme is fixed at age 60 this means that if you were over 46 (but under 50) on the 1st April 2012 you will have some protection.  The exact length of the tapered protection afforded depends on individual circumstances .  To retain the tapering protection you must remain as a contributing member of the scheme until the date that protection expires.

 

7. I am a member of the 1992 FPS and I qualify for tapering protection but what does that actually mean?

Everyone's circumstances are different but the following general provisions (best illustrated by way of example) will apply.  Let's assume you intend to retire at age 51 having completed 30 years service.  You may still do so.  the effect of doing so is this;

You will be entitled to draw your 1992 scheme benefits (accrued to the end of the period of tapered protection) based on your final salary.  You will also be able to take a commuted lump sum (if you choose to do so) in accordance with the provisions of the scheme.  If you do so however you will not be able to access your benefits accrued in the CARE scheme until state pension age, however there is the option that you may access your CARE benefits at age 55 (actuarially reduced from state pension age).  If you take this option your CARE pension will be reduced by approximately 60%.  You have other options as follows:

You may choose to work to age 55 and then retire.  The consequence of doing so is this.  You will not draw your 1992 scheme benefits for four years but you will access them at 55 where the normal provisions of the scheme (including access to a commuted lump sum, the rate of which will be based on an age 55 factor) will apply and they will be linked to your final salary at retirement.  Additionally you will also be able to access your CARE benefits at that time, however, these benefits will be actuarially reduced to reflect that you are retiring before the normal pension age of 60 in the CARE scheme.  This actuarial reduction will continue for the rest of your life.  Actuarial reduction is to reflect that you will draw your pension for longer.

You may choose to work between 55 and 59 and then retire.  The consequence of doing so is this.  You will not draw your 1992 scheme
benefits for the corresponding period of time. You will access them at retirement where the normal provisions of the scheme based on final salary (including access to a commuted lump sum again based on a factor related to your age at retirement) will apply and they will be linked to your final salary at retirement. You will also be able to access your CARE benefits at that time, however, these benefits will be actuarially reduced to reflect that you are retiring before the normal pension age of 60 in the CARE scheme. The longer you work, the less the actuarial reduction is, but it is also longer from you being able to draw your 1992 scheme benefits and this reduces the factor used to calculate your 1992 scheme lump sum.  This
actuarial reduction will continue for the rest of your life.  Actuarial reduction is to reflect that you will draw your pension for longer.

You may choose to work to age 60 and then retire.  The consequence of doing so is this.  You will not draw your 1992 scheme benefits for nine years but you will access them at 60 where the normal provisions of the scheme based on final salary (including access to a commuted lump sum the rate of which will be based on an age 60 factor) will apply and they will be linked to your final salary at retirement.  You will also be able to access your CARE benefits at that time.  The CARE benefits will be payable in full as you have reached the normal pension age of 60 for the CARE scheme.

 

8. I am a member of the 2006 NFPS and I qualify for tapering protection but what does that actually mean?

The 2006 scheme's normal pension age is 60 although members can elect to retire from age 55 in which case their pension is reduced to reflect that the pension is being early. The actuarial reduction applied would be on the basis of between 4% and 5% for each year the pension is taken
early. In these circumstances the pension is reduced from the scheme's deferred pension age of 65.  Let's assume you intend to retire aged 56.  You may still do so.  The effect of doing so is this;

You will be entitled to draw your 2006 scheme benefits (accrued to the end of the period of tapered protection) based on your final salary but that pension would be reduced by around 36%-45% (i.e. 4%-5% for each of the 9 years from age 65).  You will also have access to a lump sum in accordance with the provisions of the scheme based on the actuarially reduced pension.

Your 2015 CARE benefits will automatically be actuarially reduced to reflect that you are retiring before the normal pension age of 60 in the CARE scheme.  However the actuarial reduction will be calculated from age 60 so the 2015 CARE benefits will be reduced by around 16%-20% (i.e. 4%-55 for each of the 4 years from age 60). The actuarial reductions would continue for the rest of your life To avoid any actuarial reduction in your 2006 NFPS and 2015 CARE benefits your only option is to work to the normal pension age of 60.

 

9. I am a member of the 1992 FPS and I do not qualify for tapering protection.

Your ability to accrue benefits in the scheme ceases on the 1st April 2015.  After that date you will be automatically transferred into the CARE scheme.  You will still have the option of retiring at 30 years' service but should be aware of the implications of doing so.

As everyone's circumstances are different this is best illustrated by way of an example.  Let's assume you intend to retire at age 51 having completed 30 years' service.  You may still do.  The effect of doing so is this;

You will be entitled to draw your 1992 scheme benefits (accrued to 31st March 2015) based on your final salary.  You will also be able to take a commuted lump sum (if you choose to do so) in accordance with the provisions of the scheme, however there is the option that you may access your CARE benefits at age 55 (actuarially reduced from state pension age).  If you take this option your CARE pension will be reduced by approximately 60%.  You have other options as follows;

You may choose to work to age 55 and then retire.  The consequence of doing so is this.  You will not draw your 1992 scheme benefits for four years but you will access them at 55 where the normal provisions of the scheme (including access to a commuted lump sum the rate of which will be based on an age 55 factor) will apply and they will be linked to your final salary at retirement.  Additionally you will also be able to access your CARE benefits at that time, however, these benefits will be actuarially reduced to reflect that you are retiring before the normal pension age of 60 in the CARE scheme.  This actuarial reduction will continue for the rest of your life.  Actuarial reduction is to reflect that you will draw your pension for longer.

You may choose to work between 55 and 59 and then retire. The consequence of doing so is this.  You will not draw your 1992 scheme
benefits for the corresponding period of time. You will access them at retirement where the normal provisions of the scheme based on your final salary at retirement (including access to a commuted lump sum again based on a factor related to your age at retirement) will
apply.  You will also be able to access your CARE benefits at that time, however, these benefits will be actuarially reduced to reflect that you are retiring before the normal pension age of 60 in the CARE scheme. The longer you work, the less the actuarial reduction is, but it is also longer from being able to draw your 1992 scheme benefits and this reduces the factor used to calculate your 1992 scheme lump sum.  This actuarial reduction will continue for the rest of your life.  Actuarial reduction is to reflect that you draw your pension for longer.

You may choose to work to age 60 and then retire.  The consequence of doing so is this.  You will not draw your 1992 scheme benefits for nine years but you will access them at 60 where the normal provisions of the scheme based on final salary at retirement (including access to a commuted lump sum the rate of which will be based on an age 60 factor) will apply.  You will also be able to access your CARE benefits at that time.  The CARE benefits will be payable in full as you have reached the normal pension age of 60 for the CARE scheme.

 

10. I am a member of the 1992 FPS with tapered protection and wish to retire at age 55.

You  can take your 1992 FPS benefits (with an an optional lump sum) and your 2015 CARE benefits with actuarial reduction of 5 years. What happens to my 2015 CARE benefits if I don't take them at age 55?

If a member leaves aged 55 and doesn't take their 2015 CARE benefits immediately then they become a deferred member of the 2015 CARE scheme and the deferred pension age is the member's state pension age.  This means that, whilst the pension would increase by CPI, if they were to take it at age 60 it would be actuarially reduced from state pension age.

 

11. I am a member of the 2006 NFPS and I do not qualify for tapering protection.

Your ability to accrue benefits in the scheme cease on the 1st April 2015.  After that date you will be automatically transferred into the 2015 CARE scheme.  Although the 2006 NFPS normal pension age is 60 you will still have the option to retire at age 55 but should be aware of the implications of doing so (see current para.9 above).

12. What if I don't join the CARE scheme on the 1st April 2015 or if I have protection, after my period of tapering protection expires?

If you do not join the CARE scheme your 1992 or 2006 scheme benefits will be deferred in accordance with the deferment arrangements
in your scheme.

Link to Scottish Government Website