What happens if I leave or opt out?
If you do not want to be a member of the FPS you can opt out at any time by giving written notice to your fire and rescue authority. The notice would take effect from the following pay day. If you have less than three months' service when the notice takes effect, you would normally receive a refund of any contributions you have paid. If you have three months' or more, but less than two years' qualifying service, you would have a choice of a refund or a transfer of accrued pension rights to another pension arrangement. With two or more years' service, you would be entitled to a deferred pension or a transfer of accrued rights to another pension arrangement. You would cease to have any further cover under the Scheme (other than that provided by any deferred pension). You would, however, continue to be covered by the provisions of the Compensation Scheme.
If you subsequently change your mind and wish to rejoin the Scheme you would not be permitted to do so. Instead, you may be allowed to join the New Firefighters' Pension Scheme. This would be subject to:
- You not being able to count 40 or more years in the New Firefighters' Pension Scheme (e.g. if a transfer of any pension rights held in the FPS to that Scheme is permitted).
- A medical examination at your own expense to satisfy your fire and rescue authority of your good health if they so require.
Your election to join would take effect from the following pay day. If you are thinking about opting-out of the FPS please seek independent financial advice. You would save the cost of contributions but would probably pay more by way of tax (contributions attract tax relief) and National Insurance contributions (while a member of the FPS you pay the lower, contracted out rate). In addition, you and your dependants would cease to have the cover the FPS provides.
A refund can be paid only if you:
- Have less than two years' qualifying service in the FPS; and
- A transfer of personal pension rights has not been paid into the Scheme.
If you are eligible for a refund, this would be the total of all the contributions that you have paid less any deductions in respect of:
- The certified amount of any Contributions Equivalent Premium due; this is a payment that has to be made to "buy" you back into the State Second Pension – while a member of the FPS you will have been contracted out of that element of the State pension scheme; and
- Tax – under current HM Revenue and Customs rules this is currently 20% in respect of the first £10,800 refunded and at 40% in respect of any amount in excess of £10,800.