What happens when you leave the pension scheme?
Whether you're leaving firefighting, moving to a new post in another area of the UK or simply deciding to opt out of the pension scheme, you have a number of options depending on how long you've been a member of your firefighters' pension scheme.
Your options may also be complicated by having membership in more than one firefighters' pension scheme - and if you've transferred benefits from another pension (which would mean you'd automatically qualify for a pension). The following details are designed to help you make the right choices if you're opting out or leaving.
Your firefighter’s pension is a valuable benefit
Before leaving your Scottish Firefighters’ pension scheme you should carefully consider all your options, comparing any costs and the value of the many benefits provided by the scheme. It’s also worth taking independent financial advice when you’re weighing up your options. Remember, if you remain in the scheme you’ll continue to benefit from:
- a pension payable for life upon retirement once you've completed your qualifying service
- the option to take part of your pension as a tax-free lump sum when you retire
- tax relief on any contributions you pay into the scheme
- a range of benefits for your dependants if you die
- the option to nominate an individual, or individuals, to receive a lump sum payable in the event of your death
- the option to increase your benefits by paying extra contributions which can be deducted along with your regular contributions or paid as lump sums
- the option to apply for ill-health retirement if you’re unable to work due to ill-health.
Leaving before you've completed your 'qualifying service'
If you leave your scheme before you complete your qualifying service (within the first three months for the 2015 and 2006 schemes and two years for members of the FPS 1992 scheme) your only option will be to take a refund of contributions, less deductions. Once the refund is paid, you'll have no further benefits remaining in the scheme.
Leaving after you've completed your 'qualifying service'
Once you've completed your qualifying service (three months for the 2015 and 2006 schemes and two years for the FPS 1992 scheme) you'll qualify for benefits from the scheme so you can't have a refund of contributions. If you leave the fire pensions scheme your benefits will be preserved in the scheme and will be revalued every year in line with Consumer Price Index increases until you retire. This is known as 'deferred membership' and you'll be able to claim your full preserved benefits at your normal retirement age (60 for FPS 1992, 65 for NFPS 2006 and State Pension age for SFPS 2015) or on an actuarily reduced basis from age 55 for members of the NFPS 2006 and the SFPS 2015 pension schemes.
You can also transfer your preserved benefits to another defined benefit scheme, for example if you join a fire and rescue authority in another part of the UK.
Moving to another firefighting role outside Scotland
If you move to a fire and rescue authority in another part of the UK you'll need to join the scheme offered by that country.
You should ask your new employer about their scheme right away and initiate the transfer process immediately so that you maintain the level of benefits you're currently entitled to in your existing scheme - including preserving your normal pension age if you're in either the 1992 or 2006 schemes.
If you don't arrange a transfer to your new employer's scheme, your benefits will be preserved in the scheme and you'll have various options to take them from age 55 (or age 60 for FPS 1992 scheme).
Leaving the scheme while still working as a firefighter in Scotland
Membership of the pension scheme it is not compulsory. Although all firefighters are automatically enrolled, you can choose to opt out at any time by completing an opt out form. Before opting out, however, you should remember that your pension provision is a valuable part of your remuneration package, providing you with a range of benefits as well as an income in retirement. You may want to seek financial advice before opting out of the scheme.
If you do decide the leave the scheme, your benefits will be treated in the same way as if you had left service.
You should also note that your employer will automatically re-enrol you back into the scheme every three years. You can also re-join the scheme at any time by contacting your employer.
Note: If you're opting out of the Firefighters' Pension Scheme 1992 you'll not be able to re-join this scheme as it is now a closed scheme. If you do decide to re-join the pension scheme in the future you'll either join the New Fire Pension Scheme 2006 or the Firefighters' Pension Scheme (Scotland) 2015.
Taking a career break
Firefighters' Pension Scheme (Scotland) 2015
If you take a career break, or opt out, you must return to the scheme within five years to ensure your future service remains connected to your previous pension service.
If you don't return within five years, your previous service will become preserved and will be subject to different retirement conditions including revaluation in line with the Consumer Price Index rather than being linked to national average earnings.
Firefighters' Pension Scheme 1992 and New Firefighters' Pension Scheme 2006
If you take a career break you must return within five years in order to maintain the link to your final pensionable pay for benefits earned in your scheme. If you've taken a career break (but not opted out) while on full or tapered protection, you'll have to return within five years to ensure you return to your original scheme (as long as your tapered protection has not expired).