1 Making extra contributions
You can choose to pay extra contributions to buy extra pension in the Firefighters' Pension Scheme 2015 (FPS 2015). The amount of extra pension you can buy during your membership of the FPS 2015 is currently restricted to £6,500. The extra pension that is bought is payable on the same terms and conditions that apply to your basic scheme entitlement.
Once you have elected to pay extra contributions to buy extra pension, the amount of the added pension you have agreed to buy is revalued each year by a Treasury Order to protect your added pension from the effects of pay inflation. This revaluation ensures that your added pension grows at the same rate as the Average Weekly Earnings Index whilst you are an active member. When you retire your added pension will increase by the cost of living as measured by the Pensions Increase (Review) Orders.
You can pay for added pension by either making a lump sum payment or by entering into an arrangement to pay the amount due over a period of time. You can request an estimate from the Pensions Team.
If you wished to take up this option you should give notice to West Sussex Fire & Rescue Authority through the Pensions Team. You will be asked to confirm in your notice whether:
- you wish to pay by monthly instalments or by a lump sum payment
- you already have an added pension account with another or former fire authority
- you are making an added pension election in connection with another fire authority.
If you want to pay by monthly instalments you will also be asked to confirm:
- the period over which you wish to make the payments
- the amount to be deducted from your pensionable pay in each pay period and whether this should be a fixed amount or percentage. Any contribution less than £10 per month would require agreement from your Brigade Manager.
If you elect to pay by lump sum you will have three months from the date of your notice to make the payment.
If you elect to pay by monthly instalments the deduction for your extra contributions will start from the first pay period following receipt of your election. Your extra contributions will stop on the earlier of:
- the end date specified in your notice
- the date your active membership ends
- the date the authority determines that the overall limit of added pension will be exceeded.
2 Paying contributions to a stakeholder or personal pension scheme
You also have the option to pay contributions into a pension scheme of your own choosing as well as being a member of the Firefighters' Pension Scheme 2015 (FPS 2015).
You can, if you wish, pay up to 100% of your taxable earnings in each tax year (or £3,600 if greater) into any number of concurrent pension arrangements of your choice and be eligible for tax relief on those contributions.
3 Limits on the pensions savings you can make
Her Majesty’s Revenue & Customs (HMRC) limits the amount you pay into a pension scheme each year (the Annual Allowance) and the amount you can build up over your lifetime (the Lifetime Allowance) and receive tax relief. If you exceed either of these limits you will have to pay an additional tax charge.
Further information about the Lifetime and Annual Allowances can be found on GOV.UK.