If you are now thinking about retiring from service, please see the guides below for information on what you need to do, what you can expect, and the issues you may need to consider.
You will need to give one month’s notice in writing to the Chief Fire Officer, copying in Service Support and Pensions. Please complete the Retirement Notification below, stating your last day of work, and the date on which you wish your retirement benefits to be paid.
If you are thinking about re-employment with a public sector organisation after retirement, there may be tax implications and your pension may be affected.
Re-employment on Retirement - Protected Pension Age (PPA)
Members taking a pension and/or lump sum benefit before normal minimum pension age are liable for a tax charge, unless they retire on the grounds of ill health. From 6 April 2010, the normal minimum pension age was increased from age 50 to age 55. However, individuals paying into a scheme that allowed members to take their benefits without consent before the age of 55 were entitled to keep their earlier normal minimum pension age, providing that they were a member of that scheme on 5 April 2006. This is known as the member’s PPA.
The Firefighter’s Pension Scheme 1992 has a PPA of 50 with at least 25 years’ service, therefore benefits can be paid from age 50 without additional tax charges. There is no requirement for a member to register this protection with HMRC, it applies automatically.
PPA can be lost in the circumstances outlined below and is automatically lost where the main purpose (or one of the main purposes) for early entitlement to benefits is to avoid paying tax or national insurance contributions.
Loss of PPA – Re-Employment
A PPA can be lost if the member does not comply with certain rules on or after retirement. If a member is re-employed by a sponsoring employer or by a body or person connected to a sponsoring employer the member may lose their PPA and become subject to tax charges.
Loss of PPA – Concurrent Employment
If a member holds both a full-time and on-call firefighter role, they must leave the on-call post before or at the same time as the full-time post, or the entitlement to PPA is lost. This is because, after becoming entitled to their pension, they are still employed by a sponsoring employer.
A sponsoring employer in relation to an occupational pension scheme is any employer who participates in that scheme, i.e. they employ members of the scheme. There can be more than one sponsoring employer in relation to an occupational pension scheme. Therefore, any Fire and Rescue Authority or other employer such as a Local Authority council that pays active members of the Firefighters’ Pension Scheme 1992, is a sponsoring employer.
Effect of Losing PPA
If PPA is lost, the following tax charges apply:
- Commutation lump sums are subject to a full tax charge of 55% of the total amount.
- Pension payments are subject to 40% tax up to normal minimum pension age of 55 (no PAYE is payable).
Keeping a PPA
If one of the following conditions is met, a PPA may be kept upon re-employment:
- Compulsory recall by the armed forces
- A break in employment of at least six months
- A break in employment of at least one month and scheme rules provide that benefits may be abated
- A break in employment of at least one month and the re-employment is materially different (for a minimum period of six months).
A member re-employed from operational to support staff would keep their PPA following a one
month break as this is materially different employment, but a full-time to on-call firefighter would lose their PPA unless there is a one month break in service and the necessary abatement checks are carried out.
A member with both full-time and on-call employment can leave both posts and be re-employed as an on-call firefighter with any Fire and Rescue Authority and keep their PPA if the above conditions are met.
For full details, see the LGA's factsheet and HMRC's Manual on the Protected Pension Age rules.
If you are considering further employment after accessing pension benefits, it is advisable to contact HMRC regarding tax and national insurance, as it will have an impact on your tax code.
Cases of re-employment will be assessed on an individual basis on retirement under our Re-engagement Policy.
Re-employment on Retirement - Abatement
What is abatement?
Abatement is the ability of a Fire and Rescue Authority to reduce or stop a member’s pension if that member is re-employed by any Fire and Rescue Authority (FRA) in any capacity after retiring. This is known as ‘in-service abatement’.
Additionally, FRAs have the discretion to apply abatement in cases where retired members are re-employed to any employing public sector organisation without going through an open competition. This form of abatement is called ‘inter-service abatement’.
The general abatement rule is that on re-employment the salary paid for the new employment added to the pension in payment (plus inflation) cannot be more than the member’s salary (plus inflation) at the point they retired.
If there is an excess then the pension in payment will be reduced to bring the level back in line with the salary at retirement. There is no age limit on abatement, and this continues for the full period of re-employment by an FRA in any capacity. When the re-employment ends, the pension will be reinstated to the full amount.
Abatement does not apply in the Firefighters’ Pension Scheme 2015
Why does abatement apply?
Government policy requires public sector pensions to be abated in certain circumstances when a public servant is re-employed following retirement. The purpose of abatement is to protect public funds.
What do I need to do?
A member who retires with a firefighters’ pension and is re-employed by an FRA or sponsoring employer will need to declare their new employment to their former FRA or pension provider if this is different. Overpayments will be recovered so it is in the member’s interests to declare employment as soon as possible to avoid having to repay amounts to the pension scheme.
A sponsoring employer in relation to an occupational pension scheme is any employer who participates in that scheme, i.e. they employ members of the scheme. There can be more than one sponsoring employer in relation to an occupational pension scheme. Therefore, any FRA or other employer such as a Local Authority council that pays active members of the Firefighters’ Pension Schemes is a sponsoring employer.
Please note, the abatement rules are distinct from the protected pension age rules, and application does not depend upon your age. Cases of re-employment will be assessed on an individual basis on retirement under our Re-engagement Policy, and abatement will be applied unless there are exception circumstances, in accordance with our Abatement Policy.