Leaving the Scheme
From 1 April 2015 you are automatically enrolled to the 2015 Scheme on appointment to a police force unless you decide to opt out. On joining a police force, you may be asked to have a medical examination (free of charge) so that the Police Pension Authority can decide whether you will be eligible for ill-health benefits (This does not apply to former members of the 1987 Scheme or the 2006 Scheme who join the 2015 Scheme on 1 April 2015 or at the end of their Tapered Protection Period). If the Police Pension Authority determines (after any appeal) that the likely cost of providing benefits is disproportionately high, you can still join the 2015 Scheme and pay reduced contributions but you will not receive ill-health benefits. An exclusion from ill-health benefits under the 1987 Scheme or the 2006 Scheme will also provide an exclusion from ill-health benefits under the 2015 Scheme.
It is possible for you to be a member of the 2015 Scheme and to contribute to other pension schemes, such as a personal pension plan, at the same time. You are advised to consult an independent financial adviser if you are interested in this.
If you are (or are considering) moving between forces and/or you have a gap in service (or are considering one), differing conditions may apply according to your individual circumstances. You should contact your pensions administrator in the first instance so that you are aware of any potential consequences.
Automatic enrolment means that your Police Pension Authority will automatically enrol you onto the 2015 Scheme on your first day of Eligible Service under the 2015 Scheme.
If you opt out of the 2015 Scheme you will be automatically re-enrolled into the 2015 Scheme every 3 years on your automatic re-enrolment date. If you want to remain opted out, you will need to opt out within one month; this will be backdated from the automatic re-enrolment date.
If you are thinking of opting out of the 2015 Scheme or the 1987 Scheme or the 2006 Scheme you are strongly recommended to take independent financial advice before you make a decision.
You can opt out of the 2015 Scheme at any time by sending written notice to your Police Pension Authority. If you opt out in the first three months of you joining the police force, your decision is back-dated to the date you became a member of the police force. If you decide to leave the 2015 Scheme at any future date, your decision will take effect from the start of your next pay period after the receipt of your opt-out notice by your Police Pension Authority or on any later date which your Police Pension Authority considers appropriate.
If you opt out of the 2015 Scheme you can re-join if you wish. This may be subject to a medical examination, at your expense, to decide whether you will be eligible for ill-health benefits. You will be re-admitted to the 2015 Scheme at the start of your next pay period (with or without access to ill health benefits) after the receipt of your opt-in notice by your Police Pension Authority or on any later date which your Police Pension Authority considers appropriate.
However if you opt out within 12 months after opting in, you will not be able to opt in again until the end of that period of 12 months.
Opting out of the 2015 Scheme will have a number of consequences, including:
- If you build up two years or more of Qualifying Service (which includes service from the 1987 scheme or the 2006 scheme) and then opt out, you will be entitled only to a Deferred Pension. Your 2015 Scheme benefits would be payable in full from your SPA, or you can take a Deferred Pension actuarially reduced from NMPA (calculated by reference to your SPA), and any benefits in the 1987 Scheme or the 2006 Scheme would be payable from the age at which your deferred pension in that scheme is payable (generally 60 in the 1987 Scheme and 65 in the 2006 Scheme).
- If you die while in service as a member of a police force but you are not a member because you have opted out of the 2015 Scheme (i.e. you are a Deferred Member) you are not covered for death in service benefits therefore no lump sum death grant is payable. A surviving adult pension and an eligible child pension may be payable when you die.
- If you are not an Active Member of the 2015 Scheme you will not be eligible for an ill-health pension if you leave the police force because you are permanently medically unfit. If you are a Deferred Member who has left the police force, you may qualify for early payment of your Deferred Pension on grounds of ill-health if you are assessed as permanently medically unfit for any regular employment and you are eligible for ill-health benefits.
Staying an Active Member of the 2015 Scheme has a number of significant benefits, including:
- A public service pension remains one of the best available.
- Having a public service pension is a tax efficient and an effective way to save for your retirement.
- The 2015 Scheme will provide a guaranteed level of pension which is based on a fraction of your Pensionable Earnings for each Scheme Year (1/55.3) uprated each year until retirement. Upon retirement your earned pension is uprated by CPI in accordance with the Pensions (Increase) Act 1971. In a Defined Contribution Pension Scheme your pension would be of an unknown amount based on investment returns.
- In addition to your own contribution, your Police Pension Authority makes a significant contribution towards your pension.
- You receive tax relief on your pension contributions. Prior to 5 April 2016, members would have also paid the lower rate of national insurance contributions, due to the 2015 Scheme being contracted-out of the State Second Pension. Due to contracting-out ending for all schemes on 6 April 2016, all members pay the full rate of national insurance alongside everyone else.
- The 2015 Scheme provides valuable benefits for you and your family such as ill-health pensions and survivor pensions.
- If you opt out of the 2015 Scheme with less than 2 years Qualifying Service and you have not transferred in any service, your pension contributions will be refunded. The refund will be subject to the relevant tax rules.
- If you are thinking of opting out of the 2015 Scheme, you are strongly recommended to take independent financial advice before you make a decision.
An opt out form can be downloaded from the Scheme Guides & Forms Area.
Opportunities to re-join at a later date
If you are returning to the police force after a gap in service (this does not include a career break) not exceeding 5 years, you may be able to accrue future benefits in the 2015 Scheme.
If you once again become an Active Member of the 2015 Scheme after a gap in service not exceeding 5 years your 2015 Scheme pension will be revalued as if during the gap in service you were an Active Member (i.e. revalued in line with CPI+1.25% per year) but as if you received no Pensionable Earnings.
If you once again become an Active Member of the 2015 Scheme after a gap in service exceeding 5 years, the pension you accrued under the 2015 Scheme before your gap in service will be a Deferred Pension and will be revalued in line with CPI each year from the date you began your gap in service.
For the purposes of the Final Salary Link (used for calculating benefits under the 1987 Scheme or the 2006 Scheme), service under the 1987 Scheme or the 2006 Scheme will be taken to end when you began your gap in service, therefore you are strongly advised to check with us if you believe this may affect you.
You become a Deferred Member if you have at least two years of Qualifying Service and:
- You leave the police force before NMPA, or
- You leave the police force after reaching NMPA, but before reaching your SPA and you do not take a pension, or
- You opt out.
If you re-join the police force or opt back in within 5 years then you will become an Active Member again. Otherwise you will remain a Deferred Member. Unless you transfer your 2015 Scheme benefits to another pension scheme, or a deferred pension comes into payment early, you will receive a Deferred Pension at your SPA.
A Deferred Pension will be increased in line with CPI under the Pensions (Increase) Act 1971 from the time that you leave the police force or opt out until the date at which your benefits become payable.
Please see the examples tab above for an example of how your deferred pension benefits will be calculated.
A member leaves the police force at age 50 with an accrued earned pension of £20,000 per year. When s/he leaves, his/her accrued earned pension will increase in line with CPI under the Pensions (Increase) Act 1971 and will be payable at his/her SPA).
Assume that by the time that s/he reaches SPA his/her Deferred Pension has increased under the Pensions (Increase) Act 1971 by 40%. The member will therefore be able to retire at SPA with a pension of around £28,000 (= £20,000 × 140%).
At retirement, the member has the option to commute pension for lump sum at a rate of £12 of lump sum for every £1 of pension given up. The commutation lump sum cannot be larger than 25% of the value of the ppension.