Retirement

Thinking of retiring? It's never too early to start thinking about your retirement and planning early can help ensure a smooth transition from your working life into a life of relaxing. Here you will find all the details you need to know about the retirement process and most importantly how you can find out how much you will receive.

What is pensionable service?

This is your period of service as a member of the NFPS and in respect of which you have paid contributions. If your hours of employment are less than whole-time, the “calendar” (qualifying) length of service would be pro rated to reflect your part-time hours. For example if you work half-time and have completed six “calendar” years of service, your pensionable service will be three years.

Various other periods may count as pensionable service, e.g. that credited on receipt of a transfer value from another pension arrangement, or unpaid leave (including additional maternity and adoption leave) where you have paid contributions, or “purchased” service where you have paid contributions to improve retirement benefits, or service which previously counted towards an award which has been cancelled.

What is final pensionable pay?

In most cases this will be your pensionable pay averaged over the last 365 days of pensionable service. If either of the two preceding years would produce a greater amount, the final pensionable pay from one of those years could be substituted.

If your hours of employment are less than whole-time, although your pensionable service will be pro rated to reflect your hours, the final pensionable pay used in the pension calculation will be the whole-time equivalent pensionable pay.

Normally the “best-of the-last-three-years” principle will cater for any fluctuations in pay leading up to retirement. Sometimes, however, a firefighter may change roles or have a reduction in an element of pensionable pay earlier in his or her career, e.g. by transferring to a post without a pensionable allowance such as flexible duty supplement or by moving and losing London Weighting allowance. To protect pension rights, the firefighter could be awarded a “split pension”.

Age retirement pension

This award would be payable to a firefighter who has sufficient service to qualify for a pension and who retires at or after age 60. The basic formula is used, i.e.

annual pension = 1/60 x pensionable service x final pensionable pay

Example:
A firefighter who has completed 40 years’ pensionable service and whose final pensionable pay is £30,000 would receive immediate payment of a pension of:-

40/60 x £30,000 = £20,000 a year

Part of the annual pension can be commuted to provide a lump sum if the firefighter wishes.

Authority-initiated early retirement pension

This award would be payable to a firefighter who has sufficient service to qualify for a pension, who has reached age 55 but not age 60, and whose fire and rescue authority have determined that he/she should be retired in the interests of the management of the service. The basic formula is used, i.e.

annual pension = 1/60 x pensionable service x final pensionable pay

Example:
A firefighter aged 55 who has completed 10 years’ pensionable service and whose final pensionable pay is £27,000 would receive immediate payment of pension of:-

10/60 x £27,000 = £4,500 a year

There would be no reduction of the pension to take account of the fact that it is being paid early.

Part of the annual pension can be commuted to provide a lump sum if the firefighter wishes.

Member-initiated early retirement pension

This award would be payable to a firefighter who has sufficient service to qualify for a pension, who has reached age 55 but not age 60, and who chooses to retire with immediate payment of benefits. (The fire and rescue authority have not determined that he/she should be retired in the interests of the management of the service.) The first part of the calculation uses
the basic formula, i.e.

annual pension = 1/60 x pensionable service x final pensionable pay

But then a reduction would be applied to reflect the fact that the pension is being paid early. The reduction factor is supplied by the Scheme Actuary. It is currently 5% for each year between the date of retirement and age 65 (deferred pension age).

Example:
A firefighter who retires at age 58 having completed 10 years’ pensionable service and whose final pensionable pay is £27,000 would receive immediate payment of pension of:-

10/60 x £27,000 – (7 x 5%) = £4,500 – 35% = £4,500 – £1,575 = £2,925 a year

Part of the annual pension (after reduction) can be commuted to provide a lump sum if the firefighter wishes.

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