A firefighter may choose to increase their pension provision, particularly if they are unable to build up 30 years pensionable service before their intended retirement age. A firefighter has the option to purchase increased benefits in FPS 2006: Modified Retained Section 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: Modified Retained Section.
A member is strongly recommended to seek independent financial advice before taking any action. Neither XPS Administration 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 firefighter 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: Modified Retained Section benefit entitlement has increased substantially (for example, if they have been promoted or have taken up a more senior appointment).
A firefighter will only be able to buy added years if they cannot achieve 30 years pensionable service at their normal pension age, and their written election is made at least 2 years before age 55.
In addition, a firefighter can only start to pay added years for as long as they are a member of FPS 2006: Modified Retained Section; if they are due to move to FPS 2015 at any time in the future, they must have started paying before that date.
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 CANNOT be cancelled and will continue until the firefighter's normal pension age (age 55), unless the Fire & Rescue Authority agree that continuing the contributions would cause financial hardship to the firefighter.
Existing added years contracts will continue even if the firefighter transfers to the Firefighters' Pension Scheme 2015.