- Voluntary retirement
The normal pension age from the 2006 Modified Fire Pension Scheme is age 55.
This is the earliest date that you could leave active employment and receive your benefits.
- Ill health retirement
If you have not reached your normal pension age and you leave because of permanent disablement, you may be considered for an ill health pension.
The conditions which have to be met for an entitlement to an ill health award are as follows:
For a Lower Tier Ill Health Pension
- You must have a minimum of 3 months qualifying service and,
- You must be incapable of performing any of the duties of the role in which you were last employed, because of incapacity of mind or body which will continue until normal pension age (60)
For a Higher Tier Ill Health Pension
*Regular employment means employment for at least 30 hours a week on average over a period of not less than 12 consecutive months, beginning with the date on which the issue of your capacity for employment arises.
- You must have a minimum of 5 years qualifying service and,
- You must be entitled to a Lower Tier Ill Health Pension and,
- You must also, because of incapacity of mind or body which will continue until normal pension age, be incapable of undertaking regular employment*.
A Lower Tier Ill Health Pension is payable immediately, with no reductions and will be based on the pension that you have accrued in your pension account. This pension has no enhancements.
A Higher Tier Ill Health Pension is payable immediately, with no reductions and will be based on the Lower Tier Ill Health Pension plus an enhancement of 2% of the gross Lower Tier Ill Health Pension before any commutation multiplied by the proportion of service that you have accrued and the assumed period of calendar service from date of retirement to normal pension age.
Example – Lower Tier Ill Health Pension
Earned pension before commutation = £5,000
Pension after commutation = £3,750
Annual pension payable = £3,750
Example – Higher Tier Ill Health PensionEarned pension before commutation = £5,000
Pension after commutation = £3,750
Pensionable service at date of retirement = 7 years
Calendar service at date of retirement = 20 years
Period of assumed calendar service from date of retirement to age 55 = 5 yearsThe Higher Tier Ill Health Pension element is calculated as follows:2% x earned pension before commutation x proportion of service accrued x period of assumed calendar service
2% x £5,000 = £100
7 years / 20 years x 5 years = 1.75
£100 x 1.75 = £175Lower Tier Ill Health Pension = £5,000Total gross pension payable = £5,000 + £175 = £5,175
- Exchange pension or lump sum (Commutation)
When you retire, you can if you wish, exchange part of your annual pension entitlement to receive a lump sum payment. This is called commutation.
The commutation factor is based on your age in years and complete months at the date of retirement.
The commutation factors for retirement from 2006 Modified Fire Pension Scheme can be found in the Legislation - commutation on retirement for special members and the extended retirement tables
You can either:
- elect to commute the maximum amount allowed by HMRC, or
- commute any amount of your choosing (up to the maximum allowed), or
- commute nothing
Example – Calculating the Maximum commutation allowed by HMRC
Gross retirement special annual pension = £8,000
Age at date of retirement = 55 years 0 months
Commutation factor 20.8
Commutation option = maximumCalculating the maximum special pension that can be commuted
Total value of crystallised benefits = £8,000 x 20* = £160,000
(* 20 is a factor set by HMRC)
Commutation Factor x 3 + 20 = (20.8 x 3 + 20) = 82.4
£160,000 / 82.4 = £1,941.75
Special annual pension payable = £8,000 - £1,941.75 = £6.058.25
Special lump sum = £1,941.75 x 20.8 = £40,388.40If you retire and you elected to purchase arrears of contributions by monthly instalments you will have to complete the purchase by lump sum payment. The outstanding balance can be deducted from your commutation lump sum. If you do not complete the purchase then you will only be credited with the amount of service that has been purchased as at your date of leaving.
- Claim your pension
There are a few things that you can do to ensure that there are no delays with paying your pension.
You should inform your manager that you are retiring. It is preferable, but not essential that you give two months’ notice so that your employer and Hampshire Pension Services have enough time to prepare your retirement benefits.
Your manager will inform your employer's payroll provider and in turn they will prepare the necessary leaver form with your pay and service details and send to Pension Services.
Hampshire Pension Services will process your retirement within 15 working days of receiving all the necessary paperwork from both you and your employer. They will send you written notification of your actual retirement benefits.