This note is provided for the Scottish Public Pensions Agency (SPPA) in its role as scheme manager of the Firefighters' Pension Schemes in Scotland. The Firefighters' Pension Scheme Order 1992 (the Regulations) states that a member entitled to an ordinary, short service, ill health or deferred pension may commute a portion of their pension for a lump sum. The lump sum is the actuarial equivalent of the commuted portion at the date of retirement, calculated from tables prepared by the Government Actuary. The Firefighters' Pension Scheme Order 1992 states that certain pension credit members may commute a portion of their pension for a lump sum.

The lump sum is the actuarial equivalent of the commuted portion at a specified age.

The purpose of this note is to provide to administrators the tables for commutation of pension to lump sum in the Firefighters' Pension Scheme (1992) in Scotland (the 1992 scheme).

This note should not be used for any purpose other than to determine the commutation factor that should be applied to the amount of pension commuted to provide a lump sum in the 1992 scheme. For example:

• This guidance does not apply to the commutation for lump sum in the 2006 scheme or the 2015 scheme.
• This guidance does not apply to the trivial commutation of pension under the Regulations.
• This guidance also does not cover the calculation of the capitalised value of benefits for the purpose of determining death gratuities under the Regulations.

This note only covers the actuarial principles around the calculation and application of commutation factors. Any legal advice in this area should be sought from an appropriately qualified person or source.

This note does not provide advice on whether a member should commute any part of their pension.

The following changes have been made when reviewing this guidance:

• Important information around the expected audience for the guidance, use of the guidance, review of factors, compliance and limitations applies across all sets of guidance. Rather than being repeated in each set of guidance, this can now be found on the scheme home page. It is important to read this information alongside the guidance.
• Calculation methodology: No changes have been made to the calculation methodology.
• Examples: There are no examples in this guidance. Worked examples, using the calculation methodology, can be found in prior versions of the guidance (though please note that these use historic factors).
• Factor tables: The "Factor Tables" tab contains the names of the tables that are referenced in the calculation methodology. The tables of factors themselves can be found in the most recently published "Consolidated Factors Workbook" which is available by clicking the "Download current Consolidated Factors Workbook" button on the scheme's home page.
• Assumptions: The key assumptions underlying the factors in each note are contained in the Consolidated Factors Workbook.
• Regulations: The regulations that require the production of the actuarial factors and/or guidance that is the subject of this note are summarised in the "Regulations" tab.

The guidance and formulae that should be used to calculate commutation lump sums in the 1992 scheme is otherwise unchanged.

Previously the Regulations restricted members with less than 30 years' service who were retiring with an ordinary pension under the age of 55 to commute a maximum of 2.25 times their annual pension at retirement. Since 1 April 2022, all Firefighters who are entitled to an ordinary pension are able to commute up to the maximum of 25% of their pension.

Underpin to commutation lump sums in England

The Regulations state that the commutation factors applicable in England should be used for retirements in Scotland where this would lead to a greater lump sum for retirement dates falling after 20 May 2014.

Note that ths underpin does not apply to pension credit members.