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 Long Service Increment (LSI) in June 2007. The removal of LSI affected the pension expectation of those firefighters who were receiving it. The only members of FPS 2006 who will have entitlement to an LSI APB are longer-serving firefighters who transferred from the FPS 1992. No further LSI APBs will be awarded. It was a one-off form of protection.
However, APBs remained available to cater for other elements of pay which may not be permanent and are therefore not suitable for final salary benefits, such as Continual Professional Development (CPD) payments which were introduced in July 2007.
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 2006 pension. Part of the APB amount can be given up for lump sum.
Note that if your main FPS pension is paid on member initiated or authority initiated early retirement, the APB would be reduced for early payment.