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NOTE: The below is current as of July 9th 2010. Any Changes to our Pensions Regulations following the Federations imminent negotiations with the Government may alter the accuracy of the below data. We will endeavour to keep the information as current as possible.
Which pension scheme am I in?There are currently 2 pension schemes relating to Police Officers. If you joined the pension scheme prior to 1st April 2006, then you are in the Police Pension Scheme. If you joined the pension scheme after 1st April 2006, or elected to transfer to the new scheme, then you are in the new Police Pension Scheme. How much does it cost?Contributions to the Police Pension Scheme are 11% of basic salary and the competency related threshold payment. The contributions are not subject to Income Tax, and a lower rate of National Insurance is paid. What is an Ordinary pension?An ordinary pension is awarded on retirement. To qualify for an ordinary pension you must have completed at least 2 years qualifying service. The eligibility for an ordinary pension depends on your length of service and your age at retirement. You are eligible for an ordinary pension if any of the following apply:
What is a deferred pension?A deferred pension is paid where an officer retires with more than 2 but less than 25 years service, and is younger than 55 years old. The pension becomes payable at 60 years of age. What are ‘Ill Health’ reasons?These are granted where a police officer is permanently disabled and has at least two years pensionable service, or is disabled as a result of an injury received in the execution of duty where the length of service is then not applicable. What are injury pensions?These are granted where a police officer is permanently disabled as a result of an injury received in the execution of duty without his/her own default. This is merely an additional pension to supplement an ill-health pension and is reduced by the amount of any National Insurance or Industrial Injury Award. How is my pension calculated?The pension calculation is based on your average pensionable pay over the past year of service, or the best year of the last 3 years of service. Your full pension before any commutation is taken is calculated at 1/60 of your pension pot for the first 20 years of service, and 2/60 for the final ten years of service. Any odd days worked count on a pro rata basis. This means that your maximum pension is 40/60 of your average pensionable pay. What are transfer of pension rights?Police officers coming or going to certain other occupations may be allowed to count a proportion of their previous pensionable service towards a police pension or other occupational pension scheme. Are there other pension benefits?On the death of an officer, pensions are payable to the spouse or partner, and children, a lump sum is also payable. What is Commutation of a pension?An officer may commute a portion of a retirement pension, short service or ill-health award and receive a lump sum in lieu. The officer must have completed 25 years service, except in cases of ill-health and compulsory retirement. No portion of an injury pension may be commuted. An officer is not required to undergo a medical examination before commuting. Can I commute my deferred pension? Up to 25% of the pension may be commuted when the pension becomes payable at aged 60 years. Can I commute an Ordinary pension if I have less than 30 years service?If you retire between 25 and 30 years service, but you have not reached the age of 55 years, then the lump sum you will get if you commute your pension will be smaller. The maximum lump sum will be 2.25 times your pension. This will not be payable until you are aged 50 years. Can I commute an ordinary pension?IF you choose to commute a proportion of your pension, the maximum amount you may commute is 25%. To work out the lump sum figure that you will receive, multiply your pension by the amount you wish to commute, and then multiply this figure by the commutation factor. (The commutation factor is a multiplier provided by the Government Actuarial Department, and is based on your age – the table of factors is shown below). An example of how to work out commutation is shown below: If you are aged 50 years and 0 months, and your full pension is to be £24,000 and you choose to take the maximum commutation of 25%, then the maximum amount you can commute is £6,000 (£24,000 x 0.25). This is then multiplied by the age factor, which is 19. (£6,000 x 19), so the lump sum will be £114,000. This will then leave you with an annual pension of £24,000 - £6,000, which equates to £18,000. What options do I have if I wish to increase my pension?Since April 2006 pensions have been de-regulated so there are various private options available to increase payments in retirement. To discuss these options speak to an Independent Financial Advisor. Your local Federation Office will help you identify a suitable IFA if required. Is my pension index linked?Your pension will be index linked, based on the Retail Price Index. The index linking is only payable from aged 55 years. If you retire prior to age 55 years, when you reach 55, your pension will be brought up to where it would have been, had it been index linked each year, back payments will not be paid. When should I retire?The best time to retire is when it is right for you. However, the last day of the month is a good date, as it means you will receive your full annual leave allocation for that month. Can I opt out of the pension scheme if I stay on after 30 years service?If you intend to continue working beyond 30 years pensionable service, there is the option to opt out of the pension scheme after 30 years. If you choose to do this:
NOTE: You are strongly advised to take independent legal advice before choosing to opt out to ensure its right for you. |
