Additional Pension Benefits (APBs) are a form of contributions-based pension paid in addition to the main final salary pension. They are a method of ensuring that an element of pay, which is treated as pensionable but which may not be present at the end of a firefighter’s service, will nevertheless be recognised in respect of contributions paid.
APBs were first introduced to cater for the impact on pensionable pay of the phasing out of Long Service Increment (LSI). The removal of LSI affected the pension expectation of those firefighters who were receiving it. The only members of the FPS who will have entitlement to a LSI APB are those longer-serving firefighters who transferred from the Firefighters’ Pension Scheme 1992. No further LSI APBs will be awarded. It was a one-off form of protection.
However, APBs remain available to cater for other elements of pay which may not be permanent and so not suitable for final salary benefits, e.g. Continual Professional Development payments and certain other allowances and payments that the authority, at their discretion, may allow to be treated as pensionable.
The way in which APBs work is that you pay basic pension contributions on the relevant element of pay, and the authority pays contributions at the employer’s contribution rate. The contributions which have been paid by you and the authority over the previous 12 months are totalled on every 1 July and the sum is then used to “buy” an amount of APB for that year by reference to factors provided by the Scheme Actuary. The amounts of APB at the end of each year are index-linked. They are totalled and paid to you as an additional pension when you become eligible to receive your main FPS2006 pension. But note that if your main FPS pension is paid on member-initiated or authority-initiated early retirement, the APB would be subject to an actuarially assessed reduction.