• Firefighter Member Banner Benefits on Retirement
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    As a member of FPS 2015, the pension a firefighter earns each year is based on their pensionable pay in that year and is then increased by a set revaluation rate, linked to the average weekly earnings index, for each year up to retirement or leaving. The final pension is calculated by adding together the pension earned in each year of membership.

    The formula for calculating pensions is set out below:

    A member's individual pension pot is built up for each year based on an accrual rate of 1/59.7th. For the examples a revaluation rate of 2% is assumed.

    For example, if a firefighter earned £20,000 in year 1, their pension pot for that year would be calculated as follows:
    £20,000 × 1/59.7 = £335.01

    If they then earned £20,000 in year 2, their pension for that year would be calculated as follows:
    £20,000 × 1/59.7 = £335.01

    So at the end of year 2, their pension pot would be year 1 revalued plus year 2
    (£335.01 × 2% = £6.70 = £341.71 + £335.01 = £676.72)

    If they then earned £23,000 in year 3, their pension for that year would be calculated as follows:
    £23,000 × 1/59.7 = £385.26

    So at the end of year 3, their pension pot would be years 1 & 2 revalued plus year 3
    (£676.72 × 2% = £13.53 = £690.25 + £385.26 = £1,075.51)

    This formula is continued on until retirement, at which point a member would be able to commute up to 25% of their accrued pension to provide a tax free lump sum. The rate of commuting pension to lump sum is at the ratio of 1:12, meaning that for every pound of annual income given up, a member will receive £12 lump sum. Please note that the factor is not specific to age or gender.

    No Lump Sum
    Member's Pension Pot after 35 years = £16,780
    = Pension of £16,780 per annum

    Maximum Lump Sum
    Member's Pension Pot after 35 years = £16,780
    = Pension of £12,585 per annum & Lump Sum of £50,340

    (Lump sum obtained by £16,780 × 25/100 = £4,195 × 12 = £50,340. Pension given up £4,195)