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Pensions Advice

 
 

This page will be updated periodically with documents relating to Pensions. By clicking on the links below they will take you the relevant reports.

LATEST NEWS


The Police Pension Scheme

The police pension scheme is a final salary scheme. This means that the pension payable to a retiring officer is calculated not by the financial value of his/her contributions, but by reference to the period of pensionable service and the final pensionable pay.

Police Pensions is a very complex area. The regulations governing there are reproduced on these pages for your information. For discussion and advice about how they relate to your particular set of circumstances, please contact the Federation office. (Please click here for a series of FAQs re pensions)


Basic State Pension

Below is a link to a government website which gives a fairly digestible description of how the basic state pension works and how the new single tier state pension will work. However, in summary the situation is as follows;

  • The new single tier state pension will only impact on men born on or after 6th April 1951 and women born on or after 6th April 1953, i.e. those people who reach state pension age (SPA) on or after 6th April 2016.
  • Currently, in order to receive the full basic state pension of £113.10 per week a person will need to have accumulated 30 Qualifying Years.
  • Qualifying Years for the purposes of both the existing state pension and the new single tier state pension are/will be those during which you have worked and paid NI contributions plus those for which you have received a credit (e.g. whilst a carer, raising children, sick, or unemployed) and those for which you have paid voluntary NI contributions in order to secure them.
  • Both of the existing police pension schemes are currently contracted-out from the state second pension (formerly SERPS, now S2P) but this will cease (as contracting-out will cease to be available) with effect from 6th April 2016 to coincide with the introduction of the single tier state pension.
  • For those reaching SPA on or after 6th April 2016 the new state pension will apply.
  • In order to receive the full amount (reckoned to be about £148.40 per week, but due to be finally set in Autumn 2015) a person will need to have 35 Qualifying Years (see above).
  • For those who have been contributing under the existing system but who will ultimately retire under the new system and receive a single tier state pension because they reach SPA on or after 6th April 2016, in determining the level of that pension and whether they have the 35 Qualifying Years required for the "full" pension, they will be credited under the new system with a "Starting Amount" of Qualifying Years.
  • The "Starting Amount" will be based on your record of National Insurance Contributions paid and credits accrued before 6th April 2016 and will be the higher of what you would have got under the existing system accrued to date and what you would get under the new system if it had applied throughout your working life. This will be subject to a reduction equal to your state second pension if (like police officers) you have been contracted-out of that element of state provision.
  • It is possible to accrue further Qualifying Years under the new system on top of the Starting Amount up until you reach SPA or attain the 35 Qualifying Years necessary for the "full" single tier state pension.
  • If your Starting Amount is greater than what you can achieve by way of a single tier state pension, the excess is protected and paid in addition to the single tier state pension.
  • The Qualifying Years required for a "full" pension will change from 30 under the existing system to 35 under the new system from 6th April 2016. The impact that this will have on serving and recently retired officers below SPA at that point will vary depending upon their individual circumstances (see above). The site accessible through the link below has other links to further resources to enable people to find out details of their entitlement.
  • The impact of the end of the ability to contract-out on the police schemes is currently being looked into by us.


Link: https://www.gov.uk/state-pension


Related Documents

The Police Pension Scheme 1987 - Members’ Guide

PNB 07/1 - Compulsory Retirement Age and Retirement Policy

Police Pension Scheme - FAQs

New Police Pension Scheme - FAQs

New Police Pension Scheme - Members Guide

Police Pensions Regulations 1987

Police Pensions (Part-Time Service) Regulations

PNB Guidance - Ill Health Retirement

Home Office Guidance for Forces on Reviews of Injury Awards - see Annex C

Review of Injury Pensions

Gender Based Commutation in the Police Pension Scheme

Cessation of Survivor Benefits on Re-Marriage, Formation of a Civil Partnership, or Cohabitation

Reg. G2

In order to be a member of the pension scheme a police officer must make contributions at the rate of 1 pence per week less than 11% of pensionable pay.

Reg. G4

However, a police officer may 'opt out' of the pension scheme by electing not to pay contributions. Once this decision has been made, the police officer can opt back in only of he/she has undergone a medical examination and satisfied the Police Authority that he/she is in good health and generally only up to the age of 45 years.

Reg. B4

A police officer who has opted out of the Regulations without ever contributing to the scheme will not be entitled to any award apart from an injury award if he/she satisfies the injury award criteria.

Many of the awards depend on 'average pensionable pay'. This is calculated on the last day of police service. It is the best of the last three years annual salary.

Main Awards

There are five main awards under the Police Pensions Regulations.

Reg. B1 - Ordinary Pension

The Ordinary Pension is a pension to which, in an ideal world, all officers would become entitled. It is payable after 25 years' pensionable service or more where the officer is not retired on medical grounds. The officer receives 1/60th of average pensionable pay for each of the first 20 years' service and 2/60ths for each further year of service thereafter. Because the maximum pension payable under the Regulations is 40/60ths the officer reaches the maximum level after 30 years' service.

The ordinary pension is paid immediately if the officer has completed 30 years' service but, if he/she has between 25 years and 30 years, then it is only paid at age 50 unless the officer becomes permanently disabled before reaching that age.

Reg. B2 - Short Service Award

The short service award is payable to an officer who retires with less than 25 years' service because he/she has reached the age limit for the rank. The officer receives 1/60th of average pensionable pay for each of the first 20 years of service and 2/60ths for any years thereafter. It is paid immediately.

Reg. B3 - Ill Health Award

The ill health award is payable to an officer who retires on the ground that he/she is permanently disabled from performing ordinary police duties. The pension is calculated the same way as the ordinary pension but is better in three ways:

  • The pension is enhanced in accordance with part III or Schedule B (e.g. for an officer with over 10 years service generally by 7/60ths) subject always to the overall maximum of 40/60ths.
  • The pension is payable immediately even if the officer is aged under 50.
  • The pension is index linked (see below)

Injury Award (Police Injury Benefit Regulations)

The injury award is payable on its own or in addition to an ordinary pension, a short service award, an ill health award or a deferred pension. It applies where the officer is permanently disabled from ordinary police duties as the result of an injury received in the execution of duty. The injury award consists of a gratuity and a continuing annual payment paid monthly, but it cannot be paid in respect of any period before the individual became permanently disabled. There may be situations in which the officer leaves the police whilst medically fit to continue, but becomes permanently disabled at a later date. The injury award can still be sought even if the officer retired many years earlier, though in these cases causation is often in dispute.

Reg. B5 - Deferred Pension

The deferred pension is payable to an officer who has served for at least 2 years but for less than 25 years (i.e. an officer who does not qualify for an ordinary pension).

The pension is calculated in the same way as an ordinary pension but it is payable only from age 60 unless the former officer becomes permanently disabled from ordinary police duties at a younger age.

An officer who does not qualify for any of these five awards (generally an officer with less than 2 years' service) will mist likely be entitled to an award by way of repayment of pension contributions during service.

Part H - Appeals

Part H of the Regulations sets out the procedures for appeals of which there are two kinds:

  • Reg. H2 - a medical appeal to a board of medical referees.
  • Reg. H5 - an appeal to the crown court.

It is worth considering each of the Regulations in Part H if considering appealing.

Medical Retirement

The scheme for medical retirement under the Regulations and guidance is in broad summary as follows:

  • Where an issue arises as to whether an officer is permanently disables, the Police Authority refer the medical questions (generally via the FMA) to the SMP (selected medical practitioner).
  • The SMP makes a decision, applying the legal tests set out in Regulation A12, and, where the officer is permanently disabled, also prepares a report on his/her capability.
  • If the SMP finds that the officer is not permanently disabled, the officer will not be considered for medical retirement unless he/she successfully appeals to a board of medical referees under Reg. H2.
  • If the officer is found permanently disabled, the Police Authority will consider all circumstances and decide whether or not to medically retire the officer under Reg. A20.

Reg. A20

Reg. A20 is based on the principles that:

  • The police should not lose on medical grounds officers who are still able to provide useful service.
  • That there should be a fair and clear procedure to deal with any case in which medical retirement is to be considered.

misconduct and Criminal Convictions

An officer required to resign or dismissed from service because of a misconduct conviction (which might include the misconduct offence of criminal conduct) will not be entitled to an ill health award because, if even he/she is permanently disabled, he/she will not have retired on that ground. However, so long as the qualifying conditions are satisfied he/she can still have an injury award and if he/she retires with an entitlement to a deferred pension or ordinary pension deferred until age 50, he/she can apply for immediate payment if he/she is permanently disabled. In that case, it does not matter what the cause of the disablement is.

An officer convicted of a serious criminal offence can face the possibility of forfeiture of pension under Reg.K5. This does not apply to disciplinary convictions only and the criminal offence in question must fall into one the of the three following categories:

  • Treason.
  • Official Secrets Act offences leading to at least 10 years in prison.
  • An offence connected with police service which is certified by the Secretary of State either to have been gravely injurious to the interests of the State or liable to lead to serious loss of confidence in the public service.

An appeal against a forfeiture decision lies to the Crown Court under reg. H5 and the individual should seek to make representations to the Secretary of Sate in a case where forfeiture depends upon the Secretary of State certificate. It is arguable that natural justice requires the opportunity to make such representations.

New Police Pension Scheme

The current Police Pension Scheme will close to new recruits on 5th April 2006. After that date, new recruits will join the New Police Pension Scheme. Serving officers who are in the current pension scheme will have an opportunity to transfer to the new scheme if they wish. This page illustrates the main differences between the two schemes.

Who can be a member of the scheme?

Current Police Pension Scheme

Police officers joining the force up to 5th April 2006.

New Police Pension Policy

Police officers joining the force on or later than 5th April 2006. Members of the Police Pension Scheme will have the opportunity to transfer to the new scheme shortly after its introduction.

How much do I pay?

Current Police Pension Scheme

11% of your salary

New Police Pension Scheme

9.5% of your salary.

What is the maximum pension that I can get?

Current Police Pension Scheme

2/3rds final salary with option to exchange part of the pension for a lump sum.

New Police Pension Scheme

1/2 final salary plus fixed lump sum of times the pension with option to exchange part or all of the lump sum for extra pension.

What is my final salary based on?

Current Police Pension Scheme

Highest pensionable pay in each of the last 3 years.

New Police Pension Scheme

Earnings over the last 10 years are taken into account.

How long do I have to serve to get maximum pension?

Current Police Pension Scheme

30 years

New Police Pension Scheme

35 years

What is the earliest age that I can get my pension?

Current Police Pension Scheme

  • After 30 years' service: making the earliest age in effect 48 1/2.
  • 50 years with 25 years' service.
  • 55 years with less than 25 years' service.
  • 60 if leaving the police service before compulsory retirement age with less than 25 years' service.

New Police Pension Scheme

  • 55.
  • 65 if leaving the police service before age 55 or if opting out of the scheme.

Does my pension increase each year for inflation?

Current Police Pension Scheme

Yes - from age 55 or earlier if retiring earlier on ill-health grounds.

New Police Pension Scheme

Yes - from age 55 or earlier if retiring earlier on ill-health grounds. How is my pension accumulated?

Current Police Pension Scheme

Dual accrual: 1/60th of final salary for each of the first 20 years' service, and 2/60ths for each of the final 10 year's service.

New Police Pension Scheme

Uniform accrual: 1/70th of final salary for each year of service.

What are the arrangements for ill-health retirement?

Current Police Pension Scheme

Pension payable immediately. Officers with 5 or more years' service receive enhanced pensions.

New Police Pension Scheme

Pensions and lump sum payable immediately. Enhanced pensions are only payable to officers who are incapable of any regular employment; others receive unenhanced pensions.

Can my partner get a pension when I die?

Current Police Pension Scheme

Only if he/she is married to you or is your civil partner. Pension stops if the partner remarries or cohabits.

New Police Pension Scheme

Pensions can be made paid to unmarried partners who are not civil partners if appropriate conditions are satisfied. Pension is payable for life.

Are pensions payable to children?

Current Police Pension Scheme

Only to your legitimate or adopted children, and not to children of a marriage, which took place after retirement, or to children adopted in retirement.

New Police Pension Scheme

To a natural child, stepchild or adopted child, or any other child who was dependent on you when you died (even if not related to you.)

Are partner and children's pensions increased for the first 13 weeks?

Current Police Pension Scheme

Yes.

New Police Pension Scheme

No.

What is the lump sum death grant if I die in service (providing you have not opted out)?

Current Police Pension Scheme

2 times pay

New Police Pension Scheme

3 times pay

Can I pay in more money to increase my pension?

Current Police Pension Scheme

Yes - you can buy 'added sixtieths' or contribute to the AVC scheme, subject to limits.

New Police Pension Scheme

Yes - you can buy 'added years' subject to limits, although there is no AVC scheme linked to new scheme.

Notes

  1. You automatically join the new scheme if you are appointed as a police officer on or after 5th April 2006. You can opt out if you wish, and you will be able to opt back in again. If you opt out a second time, you cannot rejoin.
  2. The present compulsory retirement age by rank (e.g. 55 for constables and sergeants) will apply to the new scheme initially but is under review. Any revision of compulsory retirement ages will apply to both old and new schemes.
  3. From 6th April 2006 any officer can pay into another pension scheme (such as a personal pension plan) as well as the police scheme.