Deferred pension
You will be awarded a deferred pension if you leave the scheme before you are able to draw your benefits.
The amount of your deferred pension will be the value of your accrued pension at the date of leaving.
If your benefits become a deferred pension, then your new pension age becomes your State Pension Age and this means that you can no longer draw your benefits in full at age 60.
If you have transitioned from the 2006 Fire Pension Scheme into the 2015 Fire Pension Scheme your deferred pension will be made up of two parts.
Your 2006 pension is payable from age 65. This is the date that this portion of your benefits is payable in full. You can choose to have them paid from age 55, but as this is before age 65, then this portion will be subject to early payment reductions.
The early retirement reduction factors for a retirement from deferred status can be found in the GAD guidance - Early payment reductions.
Example – How an early reduction percentage is worked out for 2006 scheme
A: Age at date when benefits are paid = 55 years 0 months
Early reduction factor = 0.597
Percentage reduction = 1 – 0.597 = 0.403 x 100 = 40.3%
Your 2015 pension is payable from State Pension Age. This is the date that this portion of your benefits is payable in full. You can choose to have them paid from age 55, but as this is before State Pension Age, then this portion only will be subject to early payment reductions.
The early retirement reduction factors for a retirement from deferred status can be found in section 2.6 of the GAD guidance - Early payment reductions.
Example – How an early reduction percentage is worked out for 2015 scheme
A: Age at date when benefits are paid = 55 years 0 months
B: State Pension Age = 67 years 0 months
Number of years and months between A and B = 12 years 0 months
Early reduction factor = 0.534
Percentage reduction = 1 – 0.534 = 0.466 x 100 = 46.6%
A deferred pension will increase each year in line with the Consumer Price Index (CPI). An Annual Benefit Statement will be produced each year which will show you the current value of your deferred pension.
If you return to scheme membership within five years, then your deferred pension will be cancelled and will be joined to your new scheme membership.