Pension increase (PI)
To make sure that cost of living rises don’t make your firefighter pension less valuable to you your pension is increased every year in April under legislation called Pension Increase. The amount it is increased each year is based on the Consumer Price Index (CPI) rate in the preceding September.
Pensions in payment and deferred pensions are increased in this way, for active contributors in the scheme it’s a little bit different. You can read more about how active member benefits are increased here.
Pensions in payment
As a pensioner in the scheme you will normally get the increase if:
- You are aged 55 or over at the date of the increase*
- You retired on ill health grounds
- You get a spouse, partner or child pension
- You’re not receiving a fixed-rate gratuity only
*The increase is applied on the first Monday on or after the 6 April each year so you will notice your pension is only partially increased in April with the full increase paid for May each year.
If you have retired during the year you will also find that you only get a partial increase in that first year.
State Pension Age
Once you reach State Pension Age and if you were a contributing member before 6 April 1997 you will have been contracted-out of the State Earnings Related Pension Scheme (SERPS) and have earned a Guaranteed Minimum Pension (GMP). This is paid as part of and within your firefighter pension but the way the annual increase is applied works a little bit differently. The normal Pension increase will be applied to your non-GMP pension element only. The increase to your GMP element will then be paid within your state pension. You can read more about the state pension and GMP here.
Pensions not yet in payment (deferred pensions)
Deferred or “preserved” pensions are also increased each year by PI in exactly the same way as pensions in payment are. You will see this increase each year on your Deferred Benefit Statement.