How much will you get?
In this section
The firefighters’ pension scheme 1992 is a final salary pension scheme.
Are you building up benefits elsewhere?
This section gives you details about your firefighters' pension scheme 1992 pension. If you also have benefits in the firefighters' pension scheme 2015, you should read about how much you could also receive from that section.
How much will you get?
What factors are considered?
The firefighters’ pension scheme 1992 is a final salary pension scheme, which means the amount you get in retirement is based on:
- how long you were a member;
- your average pensionable pay when you leave; and
- an accrual rate.
Annual benefit statement
Checking your figures
Each year your administrator will let you know the value of your pension in your annual benefit statement, or for those members affected by age discrimination remedy, your annual benefit statement and remediable service statement (ABS RSS).
When you come to retire, you can choose if you want to take a lump sum as well as a pension.
Find out more about your ABS RSS.
Calculating your pension
What you might receive
For your first 20 years your pension is calculated as:
Annual pension =
(Pensionable service x 1/60th)
average pensionable pay
Then, for years 21 to 30 your pension is calculated as:
Annual pension =
(Pensionable service x 2/60th)
average pensionable pay
This is known as double accrual. If you also have benefits in the firefighters' pension scheme 2015, you can find out more about how double accrual is protected in the double accrual section.
Example
Wholetime Firefighter 1992 Only
Years of service
22 years in total
Retirement age
55
Salary
£38,000
For years 1 to 20: 20 x 1/60
For years 20 to 22: 2 x 2/60
Total pension paid each year
= 24/60 x £38,000 = £15,200 a year
Part of your pension can be given up for a lump sum – find out more in the lump sum section?
Lump sum
Commuting your pension
You can give up part of your pension for a tax free, cash lump sum. This is known as ‘commuting your pension’ or commutation.
- 01.
Let your administrator know that you want to give up part of your pension to take a lump sum, no earlier than four months before your retirement and before your first pension payment is made. You’ll need to know your national insurance number, so keep this handy.
- 02.
Choose how much of your pension you would like to give up for lump sum. You should think about the limits which are shown below.
- 03.
Your administrator/fire and rescue authority will arrange for the lump sum payment to be made as soon as possible after your retirement date.
- 04.
Your remaining pension will be paid on the next available payroll. Your administrator should let you know when this will be.
Cash lump sum calculations
The calculation used for your cash lump sum depends on your circumstances at retirement.
| Circumstances at retirement | Maximum pension you can give up | Lump sum calculation |
|---|---|---|
|
One quarter of your annual pension. | Lump sum = (Pension / 4) x commutation factor |
|
Two and a quarter (2.25) times your annual pension. | Lump sum = (Pension x 2.25) |
What is a commutation factor?
This is one of the figures used in the calculations for cash lump sums. They are set by the Government Actuary’s Department and are based on the age you take your pension. The full list of commutation factors is shown below.
Using the table below, use the age in years that you expect to take your pension to find out the commutation factor that would be used to calculate the lump sum you could take.
Commutation factor based on the age you take your pension.
| Years | Months | Commutation |
|---|---|---|
Example
Calculating pension and lump sum
Factors:
- Age at retirement: 57 years and 7 months
- Pensionable service: 30 years
- Lump selected: one quarter of annual pension (the maximum allowed)
- Annual pension: £20,000 a year (before the lump sum is taken)
- Commutation factor: 22.1
The options would be:
1. Pension only
Cash lump sum at retirement: £0
Pension each year: £20,000
2. Pension and lump sum
Cash lump sum at retirement: £110,500
Pension each year: £15,000
You can also choose to give up less pension to receive a smaller lump sum.
How was this calculated?
The pension and lump sum option would be calculated as follows:
Lump sum = (£20,000/4) x 22.1
= £5,000 x 22.1
= £110,500 cash lump sum
Pension remaining each year in retirement = £20,000 - £5,000
= £15,000 a year
Small pensions
Trivial commutation
If the value of your pension from all your pension arrangements is less than £30,000, you may be able to take it as a lump sum. This is known as trivial commutation.
In the calculations for trivial commutation, to work out the value of your pension in firefighters’ pension scheme 1992, you would multiply the annual pension by 20.
Example
Trivial commutation
Annual pension = £1,200 a year
Value for trivial commutation = £1,200 x 20 = £24,000
In this example the member would be able to look into taking their pension as a lump sum.