If you leave your employment as a firefighter or opt out of the FPS 2006 and you:
- have at least 3 months' pensionable service or have transferred pension rights into the scheme, and
- are not eligible for immediate payment of an age retirement pension because you are not old enough and/or do not have the required length of service, and
- are not retiring on grounds of ill-health,
then you would be entitled to a deferred pension.
This would be worked out using the basic formula -
annual pension = 1/60 x pensionable service x final pensionable pay
For example, if you had completed 6 years' pensionable service and had final pensionable pay of £28,000, you would be entitled to a deferred pension of –
6/60 x £28,000 = £2,800 a year
A deferred pension is normally put into payment at age 65. However, you can ask for early payment from age 55. If your FRA agrees, your deferred pension will be reduced to take account of the fact that it will be paid for longer.
Reductions are worked out by the Scheme Actuary and are shown in the table below. These are the current factors and are subject to change.
| FPS 2006 early retirement factors | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Age | 55 | 56 | 57 | 58 | 59 | 60 | 61 | 62 | 63 | 64 |
| Percentage reduction | 39.9% | 37.1% | 34.2% | 31% | 27.6% | 23.9% | 19.9% | 15.5% | 10.8% | 5.7% |
For example, a former firefighter asks for early payment at age 58, having completed 10 years’ pensionable service with final pensionable pay of £27,000. An actuarial factor of 0.690 would apply and the pension would be worked out as –
(1/60 x 10 x £27,000) x 0.690 = £3,105.00 a year
A deferred pension can also be paid earlier if you become permanently disabled from undertaking regular employment. This is a similar test to that which decides if a serving firefighter would be eligible for a higher tier ill-health award, although there would be no higher tier ill-health pension element paid in this case. For early payment on health grounds, the pension would be paid without reduction.
A deferred pension that is put into payment will be increased in line with the Pensions Increase Orders (i.e. "cost of living" increases) that have applied since your date of leaving.
Part of the annual pension after any reduction can be converted to provide a lump sum – see how much lump sum can I take?
Alternatively, you may be able to transfer your deferred pension to a new employment.