A firefighter may choose to increase their pension provision, particularly if they are unable to build up 40 years' pensionable service before normal pensionable age. A firefighter has the option to purchase increased benefits in FPS 2006 through 'added years'. They are also free to take out an entirely separate personal pension plan at the same time as they contribute to FPS 2006.
A member is strongly recommended to seek independent financial advice before taking any action. Neither XPS nor the member's Fire & Rescue Authority are authorised to give any financial advice.
HM Revenue and Customs place overall limits on pension contributions which are tax-deductible, but these are very generous. The current position is that, unless a member is a very high earner they are normally able to pay up to the whole of their taxable earnings in a tax year in pension contributions and have the whole amount allowable against tax, although there may be limitations in any year in which their FPS 2006 benefit entitlement has increased substantially (for example, if a firefighter has been promoted or has taken up a more senior appointment).
A firefighter will only be able to buy added years if they cannot achieve 40 years pensionable service at their normal retirement age, and their written election is made at least 2 years before age 60.
If a firefighter does not meet the criteria above they will NOT be eligible to purchase added years.
Added years contracts are a long term commitment. If a firefighter enters into a contract, it can only be cancelled if the member opts out of the scheme entirely or, at the member's request, the Fire & Rescue Authority agree that the payments should stop due to the member's financial circumstances. The payments can be temporarily suspended (i.e. they will resume again within six months) or, if the member and Fire & Rescue Authority agree that deductions should be discontinued for six months or more, the member’s election shall be treated as cancelled.
In all other instances the contract will continue until the firefighter's normal retirement age.
Existing added years contracts will continue even if the firefighter transfers to the 2015 Firefighters' Pension Scheme