Circular 27/2014 – The Treatment of Temporary Promotions, Temporary Allowances and Continual Professional Development Payments for Pension Purposes
The purpose of this circular is to inform members of the Firefighters’ Pension Scheme (FPS) and the New Firefighters’ Pension Scheme (NFPS) of the pension implications and treatment of the following pay elements:
- temporary promotions
- temporary allowances
- continual professional development payments
as a consequence of amendments to the FPS and NFPS which came into operation on 1 July 2014.
Background to the Changes
CLG in England introduced Amendment Orders in respect of their equivalent FPS and NFPS in July 2013 and subsequently the Department of Health, Social Services and Public Safety laid corresponding amendment orders for Northern Ireland which took effect from 1 July 2014. The Amendment Orders changed the provision of pensionable pay to state that it related only to permanent emoluments of pay which effectively means that temporary promotions will no longer be included in final pensionable pay calculations.
In accordance with the Amendment Orders it is at the discretion of the Northern Ireland Fire & Rescue Service’s Board to determine whether payments for temporary promotion or other allowances such as single days acting up and additional responsibility allowances and Continual Professional Development (CPD) are to be pensionable.
If any of these elements of pay are pensionable then the additional pay as a result of these will be treated as an “additional pension benefit” (similar to the previous treatment of CPD) and the authority will credit the member with an amount of additional pension benefit in respect of that year, based on tables provided by the Actuary. This additional pension benefit will be increased each year in line with the Pensions Increase Act.
The Orders also include a provision that allows any existing temporary promotions or temporary allowances which were previously treated as pensionable, and had already been undertaken or commenced before 1 July 2014, to continue to be treated as final pensionable salary until they cease.
It should be noted that the DHSSPS are still reviewing temporary promotions within the NFPS legislation and this review should be completed in the next few months.
How you will be affected in the future
Northern Ireland Fire & Rescue Service’s Board, in August 2014, considered the future treatment of temporary promotions, temporary allowances and continual professional development payments and the following was agreed:
- From 1 July 2014 any new periods of temporary promotion would not be included in final pensionable pay when calculating pension entitlement.
- Temporary promotions undertaken prior to 1 July 2014 would continue to be treated as pensionable pay in line with legislation.
- Continual Professional Development would continue to be pensionable from 1 July 2014 on an Additional Pension Benefit basis.
- Single day acting up and Additional Responsibility Allowances would remain non-pensionable in line with how they were previously treated.
Director Of Finance
6 October 2014