Pensions – Modified Scheme

Over the past few months we have become aware of a variety of methods, local fire services administer the process whereby Retained staff pay for historical pension contributions when joining the Modified Pension Scheme.

Some of these methods give us cause for concern in that in some instances members/employees are not receiving the appropriate tax relief on their pension contributions. One example given is where backdated contributions are being paid via a monthly direct debit rather than being taken from salary.

It is also clear that a number of members have bought back their historic pension contributions through a lump sum without realising that the lump sum has been calculated without incorporating tax relief.

Such an example recently resulted in a member receiving approx. £2,000 from HMRC after taking advice from the RFU and it is clear to us that this is not an isolated case.

While the RFU cannot provide financial advice we can and have provided assistance to members who are unaware of the options available to them.

If you believe you fall into any of the aforementioned situations please do not hesitate to contact RFU HQ.