Firefighter Pension - Am i doing the right thing?

hugheskevi

Found this reference which was helpful in outlining the protection I alluded to above:

"should a firefighter fail a fitness test through no fault of his or her own, the fire and rescue authority should consider suitable alternative employment, and if that is not possible, and the employee is at least aged 55, commence an authority initiated retirement to pay an unreduced pension."

Doesn't give much comfort to anyone aged under 55 who fails a fitness test though.

I can also see it being extremely difficult to interpret "no fault of his or her own" as I would have thought there will almost always be something you could point to as being something the individual could have done to be fitter, except in the case of clear illness/injury (although illness/injury is likely to qualify for the normal ill-health rules within the pension). Hopefully it won't lead to a repeat of the 1980s when some brigades had something like 80% of members exiting on generous ill-health packages...

Thrugelmir

hugheskevi wrote: »

Doesn't give much comfort to anyone aged under 55 who fails a fitness test though.

You can pose the same question to those facing an ever increasing NRA. Once people reach 60 the odds of suffering some medical impairment increase greatly. For many it will impact their ability to do their jobs.

hugheskevi

You can pose the same question to those facing an ever increasing NRA. Once people reach 60 the odds of suffering some medical impairment increase greatly. For many it will impact their ability to do their jobs.

It is however rather unusual to lose 30% of the value of your pension in the event you leave employment though, which is what Firefighters (and other uniformed services) under 55 face. I think that is a very poor pension design even for non-manual professions - to have it as a feature for a role conditional on a particular level of fitness is asking for disputes and concerns from members.

Beckyboo22

Wow, thanks so much for all the responses! So much to look into now you really are all fantastic. Xx

jamesd

Thrugelmir wrote: »

You can pose the same question to those facing an ever increasing NRA. Once people reach 60 the odds of suffering some medical impairment increase greatly. For many it will impact their ability to do their jobs.

Right, but the firefighter fitness test can be failed for a significant portion of the population even with diligent training, just due to the way the aerobic fitness potential of the body declines with age. There aren't enough jobs around in the service that don't have that fitness requirement so it's inevitable that many will have to leave.

What the government didn't do was explain how the NRA interacts with the very tough fitness test requirement for force people to leave the job earlier than NRA.

Thrugelmir

jamesd wrote: »

There aren't enough jobs around in the service that don't have that fitness requirement so it's inevitable that many will have to leave.

Doesn't make people unemployable in any capacity though.

Beckyboo22

Correct, it doesn't make me unemployable in any capacity, but...there aren't any non-ops roles for firefighters to move to should I fail at 55 years old, and if I have to retire due to natural decline in fitness I lose over 30% of my pension...

dunstonh

Beckyboo22 wrote: »

Correct, it doesn't make me unemployable in any capacity, but...there aren't any non-ops roles for firefighters to move to should I fail at 55 years old, and if I have to retire due to natural decline in fitness I lose over 30% of my pension...

So, you fund the gap and delay the commencement of the pension and therefore cut the reduction. It means making another monthly contribution to build up investments. If you dont need it for that purpose, you have a nice lump sum available.

In reality, the firefighter situation is not much different to what happens in the private sector and manual jobs. Either you take a chance you can work to normal retirement (60 for firefighters) or you cover yourself using your own pocket if you think that is a risk to you.

hugheskevi

In reality, the firefighter situation is not much different to what happens in the private sector and manual jobs.

Is there any private sector pension arrangement which automatically falls in value by 30% on leaving employment (regardless of whether the pension is commenced or not)?

This isn't akin to the situation where someone wants to take their pension early (possibly due to redundancy) and incur an actuarial reduction. Instead, in the situation of redundancy prior to age 55 due to failing fitness test, the Firefighter not only loses their job but also has a pension worth considerably less than it would have been if they remained in employment, as the pension instantly loses about 30% of value due to the NRA automatically changing from being age 60 to State Pension age.

Either you take a chance you can work to normal retirement (60 for firefighters)

But the NRA is not 60 for a deferred member. So what should be assumed - that you can work to age 60, or to State Pension age?

If it is assumed it is going to be State Pension age (the most prudent assumption, given the alternative cannot be relied upon), the pension is not good value for younger members due to the high contribution rate being more than the total benefits are worth (as everyone pays the same contribution rate, early leavers heavily subsidise those who remain in employment).

In practice, most aged in their 20s are going to have no idea about whether they will get good value out of the scheme or not, as this will require them to remain in the scheme to age 55 (or certainly a long time - the revaluation being average earnings complicates the calculation). It is probably most sensible therefore to remain a member, as although it may well prove to be a poor decision it does offer a strong possible upside.

Beckyboo22

Thanks again for the replies. Looking into taking out another pension to plug the gap should I be sacked at 55 for not passing the tests. Does anyone know of any good company's to start looking at?
Many thanks again!
Becky