Additional Pension Benefits (APBs) are a type of contributions-based pension paid in addition to the main final salary FPS pension. They are a method of ensuring that an element of pay, which is treated as pensionable but which may not still be in payment at the end of a firefighter’s service, will be recognised in respect of contributions paid.
APBs were first introduced to cater for the impact on pensionable pay of the phasing out of the Long Service Increment (LSI) and the introduction of Continual Professional Development (CPD) payments in July 2007. The removal of LSI affected the expected pension of firefighters who were receiving it. CPD payments introduced at the time LSI was phased out could not be guaranteed to be in payment at the end of a firefighter’s service. So APBs allowed a way of protecting the value of LSI for those who lost it, and an ongoing method for CPD payments to provide a pension for you and your dependants, whether or not CPD payments were being made at the end of your service.
If you are entitled to a LSI APB this will already have been worked out and notified to you by your FRA. The value will continue to increase in line with Pensions Increase Orders. It will be paid to you when you become entitled to receive your main FPS benefits. No further LSI APBs will be awarded.
In 2013, the APB provisions were extended to include some other types of non-regular pensionable payments. These include:
- allowances to reward additional skills and responsibilities,
- temporary promotion,
- performance related pay that is not included within basic pay.
Each FRA has to have a discretion in place to treat these payments as pensionable for an APB or not. They cannot be counted towards final salary pensionable pay if they were first paid after July 2013.
How are APBs worked out?
You and your employer pay the respective basic pension contributions on the additional pensionable amount. The total contributions paid by you and your employer over the previous 12 months are added together every 1 July and this amount is used to buy an amount of APB for that year, using factors provided by the Scheme Actuary. The amounts of APB at the end of each year are index-linked. The APB years are added together and paid to you as an additional pension when you become eligible to receive your main FPS 1992 pension. Part of the APB amount can be given up for lump sum.