Matthews (2nd Option) Case

Legislation came into force on 18 March 2024. 

The Scottish Fire and Rescue Service (SFRS) and the SPPA will then begin to contact eligible retained firefighters to ask them if they would like to buy back pension benefits (sometimes referred to as an ‘the 2nd options exercise’). 

While the legislation comes into force in March, the process for contacting firefighters with their options will take 18 months to complete. This means you may not hear from us until late in 2024. 

Many retained firefighters have already joined the modified scheme after what was known as the first Matthews options exercise. Members affected by this second exercise are those who were employed as a retained firefighter in Scotland during the following periods: 

• 7 April 2000 to 30 June 2000 
• 7 April 2000 to 30 June 2000 and 1 July 2000 to 5 April 2006 
• 1 July 2000 to 5 April 2006, for firefighters who were not given the option, or who chose not to join the retained firefighters modified pension scheme 2006 as part of the first options exercise. 

Participation is open to all individuals who meet the above criteria, including: 

• Current firefighters 
• Firefighters who have left the service. 
• Firefighters who have left the service and are in receipt of a pension: and 
• Firefighters who have left the service and are in receipt of ill health retirement benefits. 

There is nothing for you to do at the moment. 

By the end of 2024 you will receive an ‘expression of interest’ letter with a claim form. You will need to return this after which you will receive a letter which details your options – the cost of any additional pension payments you may need to pay if you wish to ‘buy back’, and how those additional contributions will impact your pension payments. 

Once you have returned your ‘expression of interest’ claim form, your request will be acknowledged. This will also let you know when you can expect the Scottish Public Pensions Agency to send you your options to allow you to make a decision. 

You may need to provide evidence of your service as a retained firefighter and your earnings during the eligible timeframe. SFRS will determine service based on the records that are held (e.g., payroll or HR records). As SFRS may not hold records going back as far as the start of your employment, they may not have enough information to determine a member’s full service history. In these cases, the member will need to provide relevant documentation which could include pay slips, P60s or employment contract.

What is special pensionable service?

This is the period that relates to the service a special member accrues following payment of the relevant special pension contributions for the limited period or extended limited period. 

How is my retained service calculated? 

Your personal calculation will be made up of the following: 

• the period during which you were serving as a retained firefighter (noting the date, if any, when the firefighter became a regular member of FPS 2006) 
• the earnings for each year of service during that period which you could count as pensionable if a scheme member. 
• the earnings of a whole-time regular firefighter in a similar role and with similar service (i.e. “reference pay”). 

What benefits will I receive? 

How your pension works

I am now a Wholetime Firefighter does this affect my benefits for that role? 

If you were a retained firefighter and immediately became a wholetime firefighter without any break and remain a wholetime firefighter now you may be in scope.

How will I get my options?

SFRS should send you an ‘expression of interest’ letter with a claim form. You will need to return this to them, to enable them to provide you with your options.

I was a member of FPS 2006; can I convert my Modified FPS 2006 service to FPS 2006 membership?

It will depend on the status of your membership, if you are a member or Pensioner conversion is possible, whereas it is not for Deferred members.

If you joined FPS 2006 from 6 April 2006 and are eligible to join the modified FPS 2006, you may be able to convert any service accrued before 6 April 2006 to your FPS 2006 membership.

You can select this option when you receive the Expression of Interest Letter and form from SFRS at the same time as declaring your interest in joining/paying for additional eligible service in the modified scheme.

I was part of the First Options Exercise and want to change my conversion choice, can I do this?

Yes.

You can select this option when you receive the Expression of Interest Letter and form from SFRS at the same time as declaring your interest in paying for additional eligible service in the modified scheme.

Who can advise me of the right choice to make?

Your decision is individual to your own circumstances, and it is key to understand that.

You will be provided with all the details you need to make a decision.

This will be in the form of an options pack. Once you have received your options pack if you feel you need help deciding, you can contact an independent financial adviser.

What happens if I don’t make a choice?

If you do not return the options form within four months, you may lose the right to join the modified FPS 2006.

We encourage that you return the form regardless of whether you are confirming or declining to become a member of the modified FPS 2006.

If you indicate a ‘no’ that you do not wish to pursue an option, then you will be sent an acknowledgement and no further action will be taken.

If you return the options form indicating a “Yes” – you do wish to take up option of joining/transferring service into the modified FPS 2006, you will receive an acknowledgement receipt of form by letter/email.

The election will take effect from the date of receipt of the election form. The period that will count upon payment will be detailed in the statement of calculation.

Am I going to pay more in contributions?

You have the choice about joining the Modified FPS 2006. This will impact how much you will have to pay in terms of contributions.

All the information you need to make a choice will be provided in an options pack.

The choice is individual, and how much and how you can repay contributions will be a key piece to consider when you make your choice.

Will I need to pay any arrears in pension contributions?

If you choose to join the Modified FPS 2006 or to pay for more service, if you were part of the first options exercise, you will need to pay the outstanding historic employee contributions before you receive any benefits.

Arrangements will be made to collect these contributions by lump sum or by instalment.

Will I receive tax relief on the contributions I pay back?

The regulations allow for tax relief to be deducted from the cost of purchasing historic service under the 2024 options exercise. The tax relief which is awarded is based on the basic taxation rates which applied during your historic period of membership.

Additionally, there is a provision in the regulations that allows for additional tax relief to be awarded where robust evidence is supplied which shows that you were a higher rate taxpayer during the historic period of membership.

Yes

Interest will be applied to any arrears of pension benefits. You will be given an estimate of the interest that may be due in your options pack.

Is there interest due on money I owe to the scheme?

Yes.

Interest will be applied to the arrears of contributions due. You will be given an estimate of the interest that may be due in your options pack.

Why can’t I join the Firefighters Pension Scheme 1992 (FPS 1992)?

Backdated membership of the FPS 1992 could not be given as that scheme is now closed. The FPS 2006 was ‘modified’ to have special provisions that generally reflect the rules of the FPS 1992.

I have service before 7 April 2000, can I purchase this as well?

If you were employed as a retained firefighter between 7 April 2000 and 30 June 2000 you will be able to have any continuous retained service before and including 7 April 2000 counted as pensionable service if purchased.

What is continuous retained service?

This is service that has no breaks/gaps whilst employed as a retained firefighter. If you were a retained firefighter, left to become a wholetime firefighter and then returned as a retained firefighter or both a wholetime and retained firefighter, the service as a wholetime firefighter would count as a break in retained service.

My Spouse/partner was a member of the firefighters’ pension scheme – why are you contacting me?

Some beneficiaries are eligible to a death grant and/or an additional death grant.

I left the scheme due to ill health – how am I affected?

If you became permanently disabled from undertaking your role as a firefighter, prior to 2006, and join the modified scheme you may now be eligible to apply for an ill-health pension.

I am in receipt of an injury pension – how will this affect me?

The protected right for those firefighters with unbroken retained employment from before 6 April 2006, who suffer a Qualifying Injury, to be treated as whole time regular firefighters was removed on 1 April 2014. The removal of this protected right will not affect those former retained firefighters currently in receipt of injury and ill-health pensions or for those cases where the Qualifying Injury occurred prior to the date that the protected right is removed i.e. 1 April 2014.

Scenario one

Question: Individual was a retained firefighter from June 1991 to February 1995 then in February 1992 transferred to another FRA as a wholetime firefighter. They were in employment as of 7 April 2000 but not as a retained firefighter, are they in scope?

Answer: Individual is not in scope as they were not in retained employment on 7 April 2000.

Scenario two

Question: Individual was employed as a retained firefighter from 2004 to 2006. They were not written to in the first round – Is this member in scope for the second exercise?

Answer: As this period wasn’t picked up during the first exercise then, yes, the individual is in scope to be considered under the second exercise.

Scenario three

Question: Individual was originally contacted as part of the first options exercise, however, didn’t take up the option as the service they could buy was limited to a couple of months. The member has service dating back to 1990 – Can they be considered under the second option exercise?

Answer: Providing the individual has continuous service prior to 1 July 2000 then, yes, the individual is in scope to be considered under the second exercise and should be given the option to buy back to the start date of any continuous service.

Scenario four

Question: Individual was originally contacted as part of the first options exercise, however, didn’t take up the option. The individual only has service post 1 July 2000 - Can they be considered under the second option exercise?

Answer: Yes, the individual is in scope to be considered under the second exercise.

Scenario five

Question: Individual originally elected to join the under the first options exercise, but either didn’t pay their lump sum or stopped paying their instalments. Will they be deemed in scope for the second options exercise?

Answer: Yes, you will be in scope however all contributions in relation to the 1st options exercise will need to be settled immediately before any pension benefits are paid. Pension contributions for the 2nd Options exercise may be paid my lump sum, instalments or commuted against future pension benefits.