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 2015 - Summary of benefits|
|A guaranteed public service career average 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 retire early from age 55, with reduced benefits|
|The ability to exchange part of your annual pension for a one-off, tax-free payment|
|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 2015 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 2015 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 or you have transferred in service from a previous pension, you will become entitled to a deferred benefit which will normally be payable from state pension age. You can ask for early payment from age 55 and receive reduced benefits.
If you have previous benefits from a final salary scheme:
- Benefits built up in previous membership of the FPS 1992 will be deferred with a normal payment age of 60, based on your pay at the date you opt out of FPS 2015.
- Benefits built up in previous standard membership of the FPS 2006 will be deferred with a normal payment age of 65, based on your pay at the date you opt out of FPS 2015.
- Benefits built up in previous special membership of the FPS 2006 will be deferred with a normal payment age of 60, based on your pay at the date you opt out of FPS 2015.
You may be able to transfer your deferred benefits to another workplace pension arrangement.
On opting out, you would not have any further cover under the FPS 2015 (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 2015 and later change your mind, you will be able to re-join the same scheme, as long as you are in a job that qualifies you for membership:
- If you re-join within 5 years and have previous membership of the FPS 1992 the final salary link for your deferred benefit will be reinstated, although the benefit remains payable from the deferred payment age of 60.
- If you re-join within 5 years and have previous standard membership of the FPS 2006 the final salary link and normal retirement age (60) for your deferred benefit will be reinstated.
- If you re-join within 5 years and have previous special membership of the FPS 2006 the final salary link for your deferred benefit will be reinstated, although the benefit remains payable from the deferred payment 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.