Benefits on Retirement
As a member of PPS 2006, the benefits payable to you are calculated by reference to your final salary and length of service. Your pension benefits accrue at a rate of 1/70th of salary for each full year you have paid into the scheme up to a maximum of 35 years. This means you can secure a pension worth half of your salary if you have 35 years. If you work part time, your service will be apportioned on a pro rata basis. So, if you worked ½ time, for every 2 years you pay into the scheme, you will get 1 years worth of service but instead of using your part time pay in your pension calculation, we will use your whole time equivalent pay.
Unlike the PPS, the payment of a tax free lump sum is automatic from the PPS 2006.
The formula for calculating pensions is set out below:
Pension = Length of Service ÷ 70 X Salary
Lump Sum = Length of Service X 4 ÷ 70 X Salary
If we take a Police Constable on the highest salary £36,519. Who has completed 35 years pensionable service working whole time, the following is what the Officer could expect to receive:
Pension = (35 years ÷ 70) X £36,519 = £18,259.50
Lump Sum = (35 Years X 4 ÷ 70) X £36,519 = £73,037.00