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Breaking News: POLICE PENSIONS 4/9/12


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#1 ONLINE   Dragonfly

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Posted 04 September 2012 - 11:07 AM

Written Ministerial Statement on police pensions


04 September 2012


Download original statement (PDF)

E.R Tuesday 4th September 2012
HOME OFFICE

Police Pension Scheme

The Secretary of State for the Home Department (Theresa May):

On 27 March 2012, I issued a written statement to the House concerning remuneration and conditions of service in the police. Within that statement I explained that I would put forward a proposal on long-term reform of police pensions to the Police Negotiating Board, which I did on the same day. In common with changes which have been developed across public service pension schemes, my proposal reflected the principles for reform established last year by the report of the Independent Public Service Pensions Commission, led by Lord Hutton.

My officials have been engaged in detailed and constructive discussions with representatives of the Police Negotiating Board since 27 March, and I have received a number of written representations from the organisations represented. Having considered the outcome of those discussions, and the representations made during this period of consultation, I am announcing today my decision for the Reform Design Framework for police pensions. This framework sets out the Government’s final position on the main elements of police pension reform and will form the basis for discussions on points of further detail in moving to implement these changes.

The main parameters of the new scheme design are set out below
  • a pension scheme design based on career average revalued earnings;
  • a provisional accrual rate of 1/55.3 of pensionable earnings each year, subject to agreement on the outstanding issues;
  • there will be no cap on how much pension can be accrued;
  • a revaluation rate of active members’ benefits in line with the Consumer Prices Index (CPI) + 1.25%;
  • pensions in payment and deferred benefits to increase in line with CPI;
  • average member contributions of 13.7% from April 2015. As announced by the Chief Secretary to the Treasury on 20 December 2011, the Government will review the impact of the 2012-13 contribution changes, including the effect of membership opt-outs, before taking final decisions on how future increases will be delivered in 2013-14 and 2014-15, and in the new scheme. Interested parties will have a full opportunity to provide evidence and their views to the Government as part of the review;
  • flexible retirement from the scheme’s minimum pension age of 55, built around the scheme’s Normal Pension Age of 60 – for all active members aged 55 or more at retirement, 2015 scheme benefits taken before Normal Pension Age will be actuarially reduced with reference to the 2015 scheme’s Normal Pension Age, rather than the deferred pension age (ie state pension age). Those members’ benefits will continue to be paid after age 60 at that actuarially reduced level;
All other members will have their 2015 scheme benefits actuarially reduced on a cost neutral basis from the scheme’s deferred pension age;
  • the Normal Pension Age of 60 will be subject to regular review, which will also consider the linked early retirement facility described at (g). These reviews will consider the increasing State Pension Age and any changes to it, alongside evidence from interested parties, including staff associations and employers. It will consider if the Normal Pension Age of 60 remains relevant, taking account of the economical, efficient and effective management of the police service, the changing profile of the workforce and the occupational demands of, and fitness standards for, police officer roles;
  • this regular review will be informed by scheme data and experience;
  • late retirement factors for members retiring from active service to be actuarially neutral from Normal Pension Age;
  • a deferred pension age equal to the individual’s State Pension Age;
  • optional lump sum by commutation at a rate of £12 for every £1 per annum of pension foregone in accordance with HMRC limits and regulations;
  • abatement in existing schemes to continue;
  • ill-health retirement benefits to be based on the arrangements in the 2006 scheme;
  • all other ancillary benefits to be based on those contained in the 2006 scheme;
  • members rejoining after a period of deferment of less than 5 years can link new service with previous service, as if they had always been an active member;
  • members transferring between public service schemes would be treated as having continuous active service;
  • an employer contribution cap and floor, as described in the Reform Design Framework.

Transitional and protection arrangements

There will be full statutory protection for accrued rights for all members as follows:
  • all benefits accrued under final salary arrangements will be linked to the member’s final salary, in accordance with the rules of the member’s current schemes, when they leave the reformed scheme;
  • full recognition of a member’s expectation to double accrual for service accrued under the Police Pension Scheme 1987 (‘the 1987 scheme’), so that a member’s full continuous pensionable service upon retirement will be used to calculate an averaged accrual rate to be applied to service accrued under the 1987 scheme;
  • members of the 1987 scheme to be able to access their 1987 scheme benefits when they retire at that scheme’s ordinary pension age (i.e. from 30 years’ pensionable service; age 50 with 25 or more years’ pensionable service; or the member’s voluntary retirement age), subject to abatement rules for that scheme. Pensionable service for the purpose of calculating the ordinary pension age will include any continuous pensionable service accrued under both the 1987 scheme and the 2015 scheme;
  • members of the Police Pension Scheme 2006 (‘the 2006 scheme’) to be able to access their benefits under that scheme when they retire at that scheme’s normal pension age (i.e. age 55);
  • members will continue to have access to an actuarially assessed commutation factor for benefits accrued under the 1987 scheme.

There will be statutory transitional protection for certain categories of members, as follows:
  • all active 2006 scheme members who, as of 1 April 2012, have 10 years or less to their current Normal Pension Age (i.e. age 55) will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current Normal Pension Age. This protection will be achieved by the member remaining in their current scheme until they retire;
  • all active 1987 scheme members who, as of 1 April 2012, have 10 years or less to age 55 or have 10 years or less to age 48 and are 10 years or less from a maximum unreduced pension, will see no change in when they can retire, nor any decrease in the amount of pension they receive at their current Normal Pension Age. This protection will be achieved by those members remaining in their current scheme until they retire;
  • there will be a further period of tapered protection for up to 4 years for scheme members. Members who are within 4 years of qualifying for transitional protection, as of 1 April 2012, will have limited protection so that on average for every month closer to qualifying for transitional protection they gain about 53 days of protection. The period of protected service for any member under these tapering arrangements will have finished by 31 March 2022. At the end of the protected period, they will be transferred into the new pension scheme arrangements. Further details on how the tapered protection will apply are set out in the Reform Design Framework.

Areas for further detailed discussion

As set out in the Reform Design Framework, there will be further discussion on specific areas of detail, responding in part to issues raised during consultation with the Police Negotiating Board. In particular there will be further consideration of equalities issues that have been identified, or any which may be identified during further discussion, as well as arrangements to ensure compatibility between the new scheme design and recognised existing or future schemes for police officers exiting the service before Normal Pension Age.

I believe this represents a fair outcome, reflecting the range of issues raised during consultation on my original proposal. This will continue to offer valuable pension arrangements for police officers which will be affordable and sustainable in the future.

The Government Actuary’s Department has confirmed that this design does not exceed the cost ceiling set by the Government in my proposal of 27 March. Copies of the Reform Design Framework and the Government Actuary’s Department verification report have been placed in the Library of both Houses.

#2 ONLINE   Dragonfly

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Posted 04 September 2012 - 11:31 AM

MEDIA RELEASE

September 4th, 2012

Responding to the Home Secretary’s written ministerial statement on pensions, Paul McKeever, Police Federation of England and Wales says;
“Staff Side, which includes the Police Federation of England and Wales, has engaged in the Home Secretary’s consultation on long-term reform of police officer pensions.

“Despite being disappointed with aspects of this announcement, Staff Side accepts it within the context of the Government’s wider public service pension’s reform agenda. It is clear from our discussions with the Home Office that, compared to the reference scheme offered by the Home Secretary of 27 March, this was the best deal possible to protect the unique position of police officers.”

Notes to Editor

• The Police Negotiating Board (PNB)is made up of two constituent parts;
The Employers including chief officers and the Home Office - called the Official Side, and;
The Employees which includes police officers up to and including the rank of Chief Constable - known as the Staff Side.

• More info on the Home Office Reference Scheme: http://www.polfed.or...ons_270312.pdf.

• Uniqueness of policing: police officers are officers of the crown and as such are subject to much constraint. Police officers cannot affiliate with or work too closely with other trade unions, are legally prohibited from going on strike and are available for duty 24/7, on and off duty.

• The Police Federation of England and Wales is not a trade union and is therefore reliant on negotiation on behalf of its members to reach agreement on pay, pensions, terms and conditions.

#3 OFFLINE   Tom Sawyer

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Posted 04 September 2012 - 02:45 PM

Can't believe no one has replied.
In plain English if you have less than 10 to get 30 years pensionable service then your contributions will go up to 13.5% next year but you can expect to retire after 30 years with the amount you expected to get.
Between 10 years 1 day and 14 years to serve there is some tapering to get something like what you expected when you were expecting it.
Over 14 years to serve then the game has totally changed and to get anything like what you expected you will have to work until you are 60 years of age.There is an opt out clause at being able to go at 55 but you will lose many thousands of pounds for the privilidge.
Bring in Winsor who wants us all front line or face being severed if you can't perform 100% then how many people are going to make it to being 60.

We had some protection in law under section 2 but the Fed haven't seemingly used this or at least not so far.

Alot of unhappy people cancelling Fed subs as we speak.Personally I don't think the Fed could do much eitherway but there seems to be alot of resentment towards Fed reps inparticular full time ones with less than 5 years or so to serve the perceived attitude is 'I am all right Jack'

#4 OFFLINE   Tom Sawyer

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Posted 04 September 2012 - 03:49 PM

Someone I know joined aged 32 in May 2006 up to today that person would have retired aged 55 wwith a lump sum of £63,000 and £10,500 per annum pension ( emergency lounge calculator)
From today that person retiring on the same day aged 55 will receive a £21000 lump sum and an annual pension of £5300 per annum ( home office police pension calculator as of today).

Brilliant news for that person.

#5 OFFLINE   Nykad21

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Posted 04 September 2012 - 04:07 PM

That's rubbish! How can paying more for longer mean less than half at the end!?

#6 OFFLINE   meditate

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Posted 04 September 2012 - 04:19 PM

That's rubbish! How can paying more for longer mean less than half at the end!?



I am no police officer but I would guess:

1) Actuarially reduced from age 60 to 55 resulting in a loss

2) Calculation now based on average salary rather than final salary

Not that it may figure in the above calculations but another kicker is the move to CPI. If the pension if deferred then CPI only and not the additional 1.25% on top - at least thats my understanding from a quick look at the above.

#7 OFFLINE   scousejon

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Posted 04 September 2012 - 05:58 PM

its dissgusting. I offer Home secretary May to join me on patrol for just 1 hour and see if she can cope.

#8 OFFLINE   Traffic Rat

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Posted 04 September 2012 - 09:43 PM

Ladies and Gents,

Whilst feeling are running High DONT give PSD / DPS reason to come down on you for a moment's rant / expression of feeling on here.

Thankfully I'm in the safe group BUT that does not mean I am not angry with the way my fellow officer's with just a few Years less than me are now having to possibly reconsider major life changes.

#9 OFFLINE   Tom Sawyer

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Posted 05 September 2012 - 03:58 PM

I can't believe that this thread isn't being picked up on.
Unless you have less than ten years to do with some protection to those with less than 14 years to do you have been massively disadvantaged with your pensions.
The amounts of money are life changing.The amount of time you will have to serve to get your pension is again life changing.
This is not scare mongering or false pessimism have a look for yourselves by google.

#10 OFFLINE   Nykad21

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Posted 05 September 2012 - 05:29 PM

What are the figures involved then? What will a PC get with at least 35 years service and/or retiring at 60?

#11 OFFLINE   gripper

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Posted 05 September 2012 - 05:44 PM

For a start, it will cost you £100 a month more than it did 6 months ago,for your pension.
Work that out over 30 years.
Plus it will be an average earnings pension,again losing out.
Other problems are that officers will have to work for 10+ extra years. Therefore preventing new recruits from joining up.
The Police and armed forces have been hit hard.
Let's see how it goes with those able to use strike action, against these proposals.

#12 OFFLINE   blakey2229

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Posted 05 September 2012 - 06:36 PM

So the decision has been confirmed.
I've used the calculator on the Home Office website and I hope I've made a mistake inputting the figures!
Due to retire at 54 with £18800/year.
Now with the new scheme at 55 I'd get £4300/year!
Work till 60 to get £8500/year!!
Someone else use it and tell me I'm wrong, please.

#13 OFFLINE   meditate

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Posted 05 September 2012 - 09:06 PM

Sounds like its wrong to me. You would expect to see a significant reduction if you took your pension early at age 55 compared to 60. Having said this a drop of 10k for a PC sounds too much. Average pension are not as harmful for those who remain in the lower ranks. It tends to hit those hardest who raise through the ranks in the latter years of their career. I havent seen the Home Office website but it does sound like the figures are wrong - I would br very surprised if they are right!

#14 OFFLINE   problem solver

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Posted 06 September 2012 - 08:00 AM

I am not convinced the Home Office calculator is correct. I am luckily protected in the PPS and the figures it gives out for me are miles out. Hopefully the local FEDs will put out something more definitive in the near future.

#15 OFFLINE   Fritz@Customs

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Posted 06 September 2012 - 09:48 AM

For a start, it will cost you £100 a month more than it did 6 months ago,for your pension.
Work that out over 30 years.
Plus it will be an average earnings pension,again losing out.
Other problems are that officers will have to work for 10+ extra years. Therefore preventing new recruits from joining up.
The Police and armed forces have been hit hard.
Let's see how it goes with those able to use strike action, against these proposals.


Don't hold your breath, Gripper,

Since the public sector Day of Action last November, virtually all the unions involved except those representing NHS, teachers and frontline civil servants have agreed to the reduced terms imposed by HMG. How much further we holdouts can go is limited and HMG is pressing ahead with imposition of the new terms anyway.

Perhaps we should count ourselves lucky that David Cameron respects the role played by the public sector. I'd hate to see what he did if he didn't like us...

#16 OFFLINE   Bart

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Posted 06 September 2012 - 10:47 AM

That's rubbish! How can paying more for longer mean less than half at the end!?


My civil service pension is the same, my contributions have gone up £30 a month, I have to work longer and get less at the end. I don't fancy going out into a live lane on my zimmer to collect debris!!!

#17 OFFLINE   Kopite

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Posted 06 September 2012 - 11:54 AM

Serious look at opting out of the scheme and doing what I need to do rather than going the extra mile. Disgusted.

#18 OFFLINE   gripper

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Posted 06 September 2012 - 12:13 PM

The NHS and teachers unions are huge.they could seriously damage the country.
Like I said,I don't think this is done and dusted.
Already there are guys at work, saying they will come out of the pension. And buy a property with the cash.

#19 OFFLINE   SimonT

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Posted 06 September 2012 - 01:09 PM

It would be quite amusing if it ended up with the vast amount of properties owned and leased throughout the UK were owned by police offers.

Maybe the fed should be re tasked and take our pension contributions and start investing the hell out of everything. Maybe if they were a financial power in the uk with a massive property portpholio they would be listened to, and as we all had money we wouldnt care if we were listened to or not.

#20 OFFLINE   SimonT

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Posted 06 September 2012 - 07:02 PM

Can I ask a question from a position of ignorance (seriously extreme ignorance)
If the current pension is being locked in 2015 is there a way of paying mote into the pension before it closes? Or is that mental and a stupid idea.

Is anyone planning to consult a financial advisor to see if there are are any better options or if even though its a huge reduction its still better than anything else

#21 OFFLINE   meditate

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Posted 06 September 2012 - 09:23 PM

SimonT, the scheme will still be highly competitive compared to what you can get elsewhere. whilst property may seem an attractive alternative (and probably is for private sector pensions) there is still no guarantee that property will deliver as expected. (plus headache of managing tenants, tax implications etc). If you do an analysis of what you get with a public sector pension compared to what you would have to invest in a private sector pension then it becomes clearer how advantageous the public sector still is. You can (I believe) invest more in pensions but it would be as additional voluntary contributions (AVC) which invests the money outside of the public sector scheme so would not be as good. I guess the ideal would be to keep the pension and buy a rental property! If I could only do one of these I personally would choose the pension scheme.

#22 OFFLINE   blakey2229

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Posted 07 September 2012 - 08:38 PM

They haven't mentioned anything about the commutation, what has happened to that?

#23 OFFLINE   Tom Sawyer

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Posted 08 September 2012 - 09:33 AM

They haven't mentioned anything about the commutation, what has happened to that?


Nothing you will still get it it just has not been factored into the new calculator.

#24 OFFLINE   Wrist Assessment

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Posted 08 September 2012 - 11:51 AM

I don't fancy going out into a live lane on my zimmer to collect debris!!!


I see a future for you as a crash cushion, though! :crazy:

#25 OFFLINE   Fritz@Customs

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Posted 08 September 2012 - 04:24 PM

My civil service pension is the same, my contributions have gone up £30 a month, I have to work longer and get less at the end. I don't fancy going out into a live lane on my zimmer to collect debris!!!


I wrote to my Tory MP (a self-proclaimed supporter of Border Force officers) following the increase in my retirement age to 68, to ask him to protest the notion of 68 year old officers being expected to pursue, arrest and restrain 20 year old drug smugglers with 20kg of coke and a potential life sentence ahead of them.

Strangely, he doesn't see this as worthy of mention in the House...




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