Employee Contribution Review
Background
Public Service Pension Schemes (PSPS) undergo four-yearly scheme valuations, which are undertaken by the Government Actuary’s Department (GAD). The 2020 Firefighters’ Pension Scheme (England) valuation measured the cost of benefits accruing over the implementation period from 1 April 2024 to 31 March 2027, and set employer contribution rates accordingly. The 2020 valuations (based on data at 31 March 2020) for Firefighters’ were finalised and published on 21 December 2023.
Employer Contribution Rate
The outcome of the valuation for the Firefighters’ Pension Schemes (England) was an increase of 8.5% in the employer contribution rates to 37.6%.
Member Contribution Yield
Employer rates are calculated based on an assumed yield of contributions from scheme members set out in the reformed scheme design framework of 2014/15. The member contribution yield was set at 13.2% of pensionable pay, and originally took into account contributions from active membership and benefit accrual across the legacy final salary 1992 and 2006 schemes, and the reformed 2015 scheme. The legacy schemes closed to active membership on 31 March 2022. GAD has reviewed the contribution rate structures and anticipate that the yield from members is set to under-deliver by 0.2%.
In layman’s terms, this means that the amount received in employee contributions will not meet the required amount by 0.2%.
HM Treasury is responsible for overall public service pension policy and has instructed Home Office that the 2020 valuation results should reflect the target yield of 13.2% pa and thus action should be taken by Home Office to ensure that the employee contribution structure is updated to attain the target yield.
Home Office have invited the Firefighters’ Pensions (England) Scheme Advisory Board (SAB) to review the existing contribution rate structure so that steps can be taken to ensure the member yield can be achieved by the end of the implementation period. The SAB have considered suggested principles including, delivering the yield, encouraging member scheme participation and future proofing the employee contribution structure.
Next Steps
Home Office will be carrying out a public consultation in the coming months to allow for all interested parties to review the suggested proposals and invite feedback, with a view to the new structure coming into force from 1 October 2025. To support the consultation, Home Office, alongside GAD, will be hosting live engagement sessions for all interested parties. Further details will be circulated when the consultation is launched
As a member of FPS 2015 you pay a pension contribution which is a percentage of your pensionable pay or assumed pensionable pay as shown in the table below.
Contributions are deducted from your pay each month.
| Contribution Table 2024/25 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2024 to 31 March 2025 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
For part-time regular firefighters and retained and volunteer firefighters, the pensionable pay shown in column 1 would be that of a whole-time regular firefighter of equivalent role and length of service. It does not take into account certain reductions in pay, for example, during sick leave, or leave of absence.
Although the contribution rate (the percentage) is determined by reference to whole-time equivalent pay, contributions are paid on the actual (part-time) pay received.
Your contribution rate will be determined at the start of your membership and then at the start of each subsequent scheme year (1 April).
If you have a change in scheme employment or any material change during the financial year which affects your pensionable pay so that it falls into a different contribution band, the FRA will advise you of a change in contribution rate and the date from which the change will be applied.
The FRA pays an employer’s contribution each month plus extra charges for ill-health awards and the cost of exercising certain discretions allowed under the scheme rules.
Employer contributions are calculated by the Scheme Actuary every four years. The current employer contribution rate for FPS 2015 is 37.6%.
Contribution rates for the period 1 April 2023 to 31 March 2024 are as follows:
| Contribution Table 2023/24 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2023 to 31 March 2024 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2022 to 31 March 2023 are as follows:
| Contribution Table 2022/23 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2022 to 31 March 2023 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2021 to 31 March 2022 are as follows:
| Contribution Table 2021/22 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2021 to 31 March 2022 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2020 to 31 March 2021 are as follows:
| Contribution Table 2020/21 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2020 to 31 March 2021 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2019 to 31 March 2020 are as follows:
| Contribution Table 2019/20 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2019 to 31 March 2020 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2018 to 31 March 2019 are as follows:
| Contribution Table 2018/19 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate from 1 April 2018 to 31 March 2019 |
| Up to £27,818 | 11.0% |
| £27,819 to £51,515 | 12.9% |
| £51,516 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2017 to 31 March 2018 are as follows:
| Contribution Table 2017/18 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate 1 April 2017 to 31 March 2018 |
| Up to £27,543 | 10.5% |
| £27,544 to £51,005 | 12.7% |
| £51,006 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2016 to 31 March 2017 are as follows:
| Contribution Table 2016/17 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate 1 April 2016 to 31 March 2017 |
| Up to £27,270 | 10.0% |
| £27,271 to £50,500 | 12.5% |
| £50,501 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Contribution rates for the period 1 April 2015 to 31 March 2016 are as follows:
| Contribution Table 2015/16 | |
|---|---|
| Pensionable pay range for an employment | Contribution rate 1 April 2015 to 31 March 2016 |
| Up to £27,000 | 10.0% |
| £27,001 to £50,000 | 12.2% |
| £50,001 to £142,500 | 13.5% |
| £142,501 or more | 14.5% |
Illness or injury absence
If you are away from work because of illness or injury, and receiving pensionable pay and/or statutory pay, you continue to pay contributions at your usual percentage rate on the actual pay that you receive.
If you are not entitled to receive pensionable/statutory pay during the absence, you can choose to pay contributions at your usual percentage rate based on the pay you were receiving immediately before it stopped. Payment can be made by lump sum or in instalments from your salary, as agreed with your employer and within certain time limits. The FRA may also ask you to pay the employer contributions that would have been due.
Child-related leave
During child-related leave you pay contributions on whatever rate of pensionable pay you receive (including statutory pay).
If you are not entitled to receive any pensionable/statutory pay during a period of ordinary maternity, paternity or ordinary adoption leave, you would be treated as if you had paid contributions.
If you are not entitled to receive any pensionable/statutory pay during a period of additional maternity or adoption leave, parental leave or shared parental leave, you will have the option to pay contributions on "assumed pensionable pay", i.e. the pensionable pay you would have received but for the leave. Payment can be made, within certain time limits, by lump sum or in instalments from your salary, as agreed with your employer. The FRA would pay employer contributions on the assumed pensionable pay.
Authorised unpaid absence
If you have a period of authorised unpaid absence, you can choose to pay contributions at your usual contribution rate on "assumed pensionable pay", i.e. the pensionable pay you would have received but for the unpaid absence. Payment can be made, within certain time limits, by lump sum or in instalments from your salary, as agreed with your employer. The FRA may also ask you to pay the employer contributions that would have been due.
Trade dispute absence
If you are absent because of a trade dispute, you can choose to pay contributions on "assumed pensionable pay", i.e. the pensionable pay you would have received but for the absence. Payment can be made, within certain time limits, by lump sum or in instalments from your salary, as agreed with your employer. The FRA may also ask you to pay the employer contributions that would have been due.
Reserve Forces Service Leave
While on reserve forces service leave you would be expected to pay contributions on your "assumed pensionable pay", i.e. the pay you would have received but for the leave, unless you qualify for benefits under another occupational pension scheme during that period.
The contributions may be deducted from any payment made for of the same period under Part 5 of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951.
Contributions, pensions and certain other benefits are based on "pensionable pay" and "assumed pensionable pay".
The following items are treated as pensionable pay:
- pay received for the performance of the duties of your role, except for any allowances or emoluments paid on a temporary basis;
- your permanent emoluments (including, in the case of a retained firefighter, any retaining allowance)
- the amount foregone if you have agreed to surrender the right to receive part of your pensionable pay in exchange for the employer providing a non-cash benefit (this is sometimes referred to as "salary sacrifice");
- the amount paid for continued professional development (CPD) if the authority has determined that this should be pensionable.
However, any payments made by an employer to a member who is on reserve forces service leave would not count as pensionable.
Sometimes a firefighter's pay may be reduced or stop for a period. This could have an effect on the assessment of benefits. FPS 2015 explains what can count as "assumed pensionable pay" in certain circumstances so that benefits will not be affected. These circumstances include sick leave, injury leave, child-related leave and unpaid leave. Assumed pensionable pay is the pay that would have been received but for the absence.
In some circumstances, for example sick leave with reduced pay, assumed pensionable pay will be applied automatically. In other circumstances, such as sick leave with no pay, the application of assumed pensionable pay would depend upon a member choosing to pay, and paying, contributions for the relevant period.
Your FRA's pension administrator can inform you of your rights and options if this applies to you.