Membership of the Firefighters’ Pension Schemes is automatic, but not compulsory. The schemes allow you to save while you are working in order to enjoy a pension when you retire. They are workplace pension schemes, provided by your employer who also meets part of the cost of providing the range of secure benefits. So it is an extremely valuable and important part of your employment package.
Whatever your reasons for thinking about opting out, you should give it careful consideration before making a decision. It is worth taking time to look at the benefits you are giving up - these are detailed in the table below. You may also wish to take independent financial advice. If you decide to opt out based on advice you receive, you should ask for this advice in writing.
Your employer cannot ask you or force you to opt out. If you are asked or forced to opt out you can tell the Pensions Regulator.
Equally, no one can force you to remain in the scheme but, if you choose not to be member, you should understand the implications for both you and your dependants before opting out.
|FPS 2006 - Summary of benefits (standard members)|
|A guaranteed public service final salary pension that remains one of the best available and is a tax efficient way of saving for retirement|
|Retirement with benefits paid in full from age 60 that increase automatically with the cost of living|
|Ability to apply for member-initiated early retirement from age 55, with reduced benefits|
|The ability to exchange part of your annual pension for a one-off, tax-free payment|
|A final salary link for your FPS 2006 benefits unless you return to the Firefighters’ Pension Schemes after a break of 5 years or more|
|Ill-health retirement benefits if you have to leave work through permanent ill health|
|A lump sum death grant of 3 times your pensionable pay if you die in service|
|Dependants’ benefits for a surviving partner, and/or children|
If you do not want to be a member of the FPS 2006 you can opt out at any time by writing to your FRA or completing an opt out form if one is available. If the notice is in electronic format, you must include a statement confirming that you personally submitted the notice. The opt out would take effect from the following pay day.
If you opt out of the FPS 2006 before completing 3 months of membership, you will be treated as never having been a member and will receive a refund of your contributions minus an adjustment for tax relief.
If you opt out after 3 months, you will become entitled to a deferred benefit which will normally be payable from age 65. You may be able to transfer these benefits to another workplace pension arrangement.
On opting out, you would not have any further cover under the FPS 2006 (other than that provided by any deferred pension). However, you would continue to be covered by the provisions of the Firefighters' Compensation Scheme in the event of a qualifying injury.
If you decide to opt out of the FPS 2006 and later change your mind, you will be able to re-join the same scheme if you have full- or tapered-protection, as long as you are in a job that qualifies you for membership. If your taper date has passed and you are in eligible employment, you will be offered membership of the FPS 2015.
Re-joining either scheme within 5 years will reactivate your FPS 2006 deferred benefit which can then be accessed from the normal retirement age of 60.
The Pensions Act 2008 introduced new pension rules for all employers in the UK called automatic enrolment. It means that your FRA will have to opt you back (or ‘re-enrol’ you) in to a pension scheme every 3 years. You will then have the choice to opt out again.
If you change your job, your new employer will normally put you back into pension saving straight away.