The FPS1992 is a final salary pension scheme which means that your pension will be a proportion of final average pensionable pay.
The proportion will depend, in part, upon how much pensionable service you have at the time of leaving the scheme. For age and ill-health pensions, a principle of "fast accrual" is used. For each of the first 20 years of pensionable service, you will get 1/60th of average pensionable pay and for each of the following years you will get 2/60ths of average pensionable pay.
Each day of pensionable service will count as 1/365th of a year. The maximum number of 60ths that you can count is 40 (after 30 years' service). For example, if you retire at age 55 with 30 years of pensionable service and average pensionable pay of £30,000, your pension would be assessed as –
(20 x 1/60) + (10 x 2/60) x £30,000 = 40/60 x £30,000 = £20,000 a year
or, if you retire at age 50 after 27 years with the same pay, your pension would be –
(20 x 1/60) + (7 x 2/60) x £30,000 = 34/60 x £30,000 = £17,000 a year
What is pensionable service?
This is your service as a member of the scheme and in respect of which you have paid contributions. If you have ever worked part-time, the starting point for assessment of your pension is to use the pensionable service you would be able to count if whole-time.
Various other periods may count as pensionable service, e.g. that credited on receipt of a transfer value from another pension arrangement, unpaid leave (including additional maternity, paternity and adoption leave) for which contributions have been paid, or service which previously counted towards a pension which has since been cancelled. "Purchased 60ths" paid for by additional contributions would also be included in the assessment of pension.
What is average pensionable pay?
In most cases this will be your pensionable pay averaged over the last 365 days of pensionable service. It would not, however, include those payments which have been treated as pensionable for providing “Additional Pension Benefits”.
If either of the two preceding periods of 365 days would produce a greater amount, the final pensionable pay from one of those earlier periods could be substituted. This protects your pension if you have a reduction in pay in your last couple of years' service. If you have a reduction in pay earlier on in your service, the "two pension option" could help you.
If at any time you have worked part-time, the starting point for assessment of your pension is to use the pensionable pay you would be able to count if whole-time.
Age Retirement Pension
This would be payable to a firefighter who, upon retirement, is age 50 or over with at least 25 years' service (it is referred to as an "ordinary pension" in the FPS rules), or age 55 or over with less than 25 but at least 2 years' service (this is referred to as a "short service pension"). The basic formula is as above .
For example, if you retire at 55, with 22 years' pensionable service and average pensionable pay of £28,000, your pension would be –
(20 x 1/60) + (2 x 2/60) x £28,000 = 24/60 x £28,000 = £11,200.00 a year
Part of the annual pension can be commuted to provide a lump sum if you wish – see How much lump sum can I take.