How is my pension worked out?

The FPS 2006 Special Members Scheme is a final salary pension scheme which means that your pension will be a proportion of final pensionable pay.

The proportion will depend, in part, upon how much pensionable service you have at the time of leaving the scheme.

As a special firefighter member, for each year of special pensionable service, you will get 1/45th of final pensionable pay. The fraction of 1/45th reflects the accrual rate for FPS 1992 members. In that scheme, for each of the first 20 years of service the firefighter would be credited with 1/60th of pensionable pay and for each year between 20 and 30, he/she would be credited with 2/60ths.

As part of the pension settlement for retained firefighters, it was decided that the 60th accrual principle contained in the FPS 2006 should be reflected in the Special Members FPS but based on a uniform accrual principle of 1/45th for each year up to a maximum of 30 years. (This is how a deferred pension would be assessed in the FPS.) Each day of pensionable service will count as 1/365th of 1/45th.

For example, if a special firefighter member retires at age 55 with 15 years 28 days of pensionable service and final pensionable pay of £32,000, the pension would be assessed as –

15 28/365 x 1/45 x £32,000 = £10,721.22 a year

For regular firefighters, this is their period of service as a member of the FPS and in respect of which they have paid contributions. If their hours of employment are less than whole-time, the "calendar" (qualifying) length of service would be pro rated to reflect their part-time hours. For example if a regular firefighter worked half-time during six "calendar" years of service, the pensionable service for the pension calculation would be three years.

For retained firefighters, however, a totally different approach has to be used, based on pay. The actual pensionable pay they receive is compared with the pay that would have been received over the same period by a whole-time regular firefighter in the same role and with similar service. (The FPS 2006 calls this "reference pay".)

The comparison will normally be made over each financial year (1 April to 31 March) during the firefighter's pensionable employment. It will indicate the proportion of pensionable service which will count in each financial year. Suppose a retained firefighter worked for 3 financial years – from 1 April 2007 to 31 March 2010. Assume the pay of a whole-time regular firefighter in a similar role over the same 3 year period was –

1.4.2007 to 30.6.2007 £24,000
1.7.2007 to 30.6.2008 £26,000
1.7.2008 to 30.6.2009 £28,000
1.7.2009 to 30.6.2010 £30,000

These rates of pay would be the starting point for working out the retained firefighter's pensionable service. Next we need to break down these rates of pay to show how much would actually have been received by the whole-time regular firefighter within each of the financial years –

Year 1:

1.4.2007 to 30.6.2007: 91/365 x £24,000 = £5,983.56

1.7.2007 to 31.3.2008: 274/365 x £26,000 = £19,517.81


Year 2:

1.4.2008 to 30.6.2008: 91/365 x £26,000 = £6,482.19

1.7.2008 to 31.3.2009: 274/365 x £28,000 = £21,019.18


Year 3:

1.4.2009  to 30.6.2009: 91/365 x £28,000 = £6,980.82

1.7.2009 to 31.3.2010: 274/365 x £30,000 = £22,520.55


Then the pensionable pay received by the retained firefighter has to be established. For this example, let's suppose pay records show that the pensionable pay received by the retained firefighter was –

Year 1: £6,429.12

Year 2: £4,132.56

Year 3: £8,528.21

Finally, to work out the service credit for each financial year, we divide the pensionable pay received by the retained firefighter by the pensionable pay received by the whole-time regular firefighter –

Year 1: £6,429.12/£25,501.37 = 0.2521 of a year

Year 2: £4,132.56/£27,501.37 = 0.1503 of a year

Year 3: £8,528.21/£29,501.37 = 0.2891 of a year

Total: 0.6915 years' pensionable service

It is 0.6915 years (approximately 252 days) that would be the pensionable service used in the pension calculation.

Various other periods may count as pensionable service, e.g. service credited on receipt of a transfer value from another pension arrangement, unpaid leave (including additional maternity, paternity and adoption leave) where the firefighter has paid contributions, or "purchased" service where contributions have been paid to improve retirement benefits. Special firefighter members who have been members of the FPS 1992 or the unmodified FPS 2006 may also have pensionable service allowed under the "conversion" arrangements which applied when they first elected to join the modified scheme.

For parity with part-time and whole-time regular firefighters, the pensionable pay used in the pension formula for a retained firefighter will be the final pensionable pay that would have been used for a regular whole-time firefighter in a similar role and with similar qualifying service. In most cases this would be the (whole-time) 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 Split Award (two pension option) could help you.

This award would be payable to a firefighter who has sufficient service to qualify for a pension and who retires at or after 55. The age retirement pension formula for a special firefighter member is

annual pension = 1/45 x pensionable service x final pensionable pay

If, in line with the explanation of pensionable service and final pensionable pay given above, a special firefighter member who has served for 25 calendar years has been credited with 14.6047 years of pensionable service by reference to retained earnings and the pensionable earnings of a regular firefighter in a similar role, and assuming that at the date at which the retained firefighter retires with entitlement to an age retirement pension, a regular firefighter in a similar role would have final pensionable pay of £30,000, the assessment of the special firefighter member's pension would be–

14.6047/45 x £30,000 = £9,736.47 a year

Part of the annual pension can be commuted to provide a lump sum if the firefighter wishes – see How much lump sum can I have

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