gototopgototop

Firefighter 18/20 exercise

 

18-20 Frequently Asked Questions

1. Who will benefit from this ruling?

A. Only firefighters who joined the 1992 FPS aged 18-20 and accrued or will still accrue 30 years' service by the time they reach age 50.

2. What does this mean?

A. It means that if you are affected (i.e. you joined before the age of 20) upon reaching 50 you will be able to:

· Retire immediately with a pension – you can retire immediately because you will have reached the earliest age you can retire from the FPS (except in cases of ill health).  Because you have accrued 30 years you can commute the maximum and will not be limited to the lower commutation limit of 2.25 x your annual pension.

· Continue employment and recommence payment of contributions (although the accrual cap remains in place with a maximum thirty years pension). You can chose to continue working but because you could retire immediately from age 50 with your pension you must resume pension contributions if you wish to retire at your expected NPA (if this is below age 60)

· Or continue employment without resuming your pension contributions, thus becoming a deferred member. You can continue to work without resuming your pension contributions but you will become a deferred member and will not be able to access your pension before age 60 except on ill health grounds.

3. What happens if I have already paid my contributions for this period?

A. If you have already accrued 30 years in the FPS, are under age 50 and made the contributions for periods over 30 years you will get a refund for these payments.

For example, if you joined at age 18 and you are already 50 you will get the contributions you actually made at age 48-50 (2 year's contributions) refunded plus interest.  If you joined at age 19 and are already 50 you will get the contributions you actually made at age 49-50 (1 year's contributions) refunded plus interest.

4. Why does it only apply from 1 December 2006?

A. This will apply retrospectively to 1 December 2006 because this is the date when discrimination of this type became unlawful.

5.  If I get a contributions holiday after I've paid in 30 years but I am still unable to retire because I am under age 50, what happens if I get a pay increase or get promoted during this period?

A. You will still remain a full active member of the scheme during this contribution holiday period and your final salary will reflect any permanent pay increases.

However, when you reach age 50 you will have to make a choice to either retire immediately, continue in employment and resume contributions or continue without resuming contributions.  Please note that if you continue in employment but do not resume contributions you will become a deferred member and any further increases in pay or promotion will not be considered.  In this situation your pension will be calculated at the point you became a deferred member.

6.  Am I fully covered for ill health etc during this contributions holiday period?

A. Yes, you are a full active member of the scheme during this period but again please note that if at age 50 you continue in employment but do not resume contributions you will become a deferred member.

7.  What are the tax implications in relation to any refund?

A.  The ruling outlines that the refund will be adjusted up or down to take account of any tax or national insurance underpayments/overpayments that have occurred in relation to this issue.

8.  What are the tax implications for those on a contributions holiday?

A.  Firefighters should be aware that pension contributions attract tax relief and therefore reduce the amount of pay that is taxable. The refunds will reflect the tax relief that was originally provided when the contributions were paid and for those current firefighters who will be eligible for a "contribution holiday" they will no longer receive tax relief on that part of their pay as contributions are no longer being paid.

9.  Does this ruling cover someone who joined at age 18-20 but is transferred into the 2015 Firefighters' pension scheme before they accrue 30 years?

A. No.  A person who joined at age 18-20 but is transferred into the 2015 scheme before they accrue 30 years will not suffer the same age discrimination and will be allowed to accrue more than 30 years reckonable by combining the 1992 service and the 2015 service.  This is possible because the 2015 scheme does not have an accrual cap.

Link to Scottish Government Website