The reason for the difference is due to the amount of lump sum you can receive under the pension scheme rules. This is dependant on when and how you leave your employment.
You can commute (exchange) up to ¼ of your pension if you retire with over 30 years service, have reached your pre October 2006 compulsory retirement age, or you retire because of ill health. If not, then your lump sum will be capped at 2 ¼times your pre commuted pension.
This means that if you are a 53 year old constable who retires after 29 years service with a basic pension of £20,000 then the maximum lump sum you could receive would be £45,000. This compares to the £106,000 you could receive if you had 30 years service. The difference between leaving at age 53 with 28 years service and 29 years service would only be £1,052.63 assuming your pay in all calculations was £31,578.95.
If you have built up pension rights with another employer or within a personal pension before you joined the police force then it may be possible to transfer these benefits into the police pension scheme. The transfer will only be possible if you have more than 2 years to serve before your pre 2006 compulsory retirement age and if your former scheme allows you to transfer the pension out of their scheme.
Please note that it is not possible to transfer benefits that you have built up while you have been a police officer into the scheme. If you would like to consider transferring previous pension benefits into the police scheme please submit your request to XPS.
If you opt out, you will not be able to opt back into the PPS 1987. You will, instead, become a deferred pensioner and your 1987 scheme pension will be paid at age 60 (or from age 50 if you have over 25 years service and leave the police force). As you cannot opt back in, you will lose any access to the final salary link for the service you have accrued under the scheme, any prospective double accrual enhancement and the ability to take your pension from age 50 with 25 years pensionable service.
If you decide that you want to rejoin a pension scheme and you have less than 30 years service then you will be able to join the PPS 2006 providing your application is processed by 31 March 2015. If your application is not received by this date then you will only be able to join the new PPS 2015 scheme from 1 April 2015.
If you qualify for the transitional protection or tapering arrangements and you opt out during the period in which you are covered by them, you will lose any future protection. If you then wanted to re-join the scheme you would be enrolled into the 2015 scheme
That depends. The tax rules have strict conditions on reemployment after retirement. In the police scheme, you would only fall foul of the rules if you are between 50 and 55 and you had not paid into the pension scheme for 30 years before your 50th birthday and you return to work for the same employer in any capacity. If you return to work as a civilian, you would only need a break of 1 month because you will no longer have the power of arrest (you don't have a warrant card) and you won't carry weapons (hand cuffs, tactical spray etc).
This makes your role materially different. If you return as a police officer, your pension would become subject to abatement (if your pension plus your pay in your new job exceeds the pay on which your pension was initially based, then your pension will be reduced to the point that they are equal or suspended), this also means that you would only need a break of 1 month before returning to work to avoid the taxation issues. If you return for a different employer, you can return without a break even if that employer seconds you back to your former place of work.
The purchase of "added years" normally entails a long term commitment to pay contributions until you retire or leave PPS. Once you have entered into an added year's contract, you can not cancel the agreement. It may be possible to suspend payment of additional contributions for a limited period, but only if you are able to satisfy your police force that the payments are causing you financial hardship.
The purchase of "added years" normally entails a long term commitment to pay contributions until you retire or leave PPS. Once you have entered into an added year's contract, you can not cancel the agreement.
Yes, provided you are more than one year away from reaching the age of 60. If you have previously refused a transfer it is likely that any new value will provide a significantly lower service credit. This is because the factors on which transfer calculations are based relate to your age at the date of transfer and the pay used in the calculation is your pay at the date of calculation.
Pension contributions cannot be paid in respect of career breaks.
If you leave the 1987 scheme with less than 2 years qualifying service without entitlement to any other award then you will become entitled to a refund of your pension contributions. The 1987 scheme regulations only allow a refund to be paid when you cease to serve as a police officer, at which point deductions will be made for income tax and a deduction to contract you back into the state second pension scheme.
If you are still contributing to the police pension scheme when you die (i.e you had not opted out of the scheme) then a lump sum death grant will become payable to your spouse or civil partner. The death grant is twice your pensionable pay or twice your part time pensionable pay if you worked part time at the time of your death. If you do not leave a spouse or civil partner the death grant will be paid to your personal representative.
In addition to the death grant, your spouse / civil partner will also receive an adult survivor's pension.
For the first 13 weeks your adult survivor will receive a pension equal to the pensionable pay you received in the week before you died. After the first 13 weeks, the amount of pension payable will depend on if you leave a widow, a widower or a civil partner.
If you joined the pension scheme after 1 April 1972, your widow will be entitled to a half-rate pension (i.e. half of the pension you would have received had you retired on health grounds on the day you died). Otherwise, your widow's pension will depend on whether you opted to up-rate your pre-April 1972 service.
If you leave a widower, they will receive a pension in the same way as for widows except that the pension will only be based on your service from 17 May 1990 unless you paid extra contributions to count your earlier service.
If you leave a male civil partner they will receive a pension in the same way as for widows except that the pension will only be based on your service after 5 April 1988.
If you leave a female civil partner they will receive a pension in the same way as for widows except that the pension will only be based on your service from 17 May 1990.
Points to note:
If you have any children, they may be entitled to receive a pension in their own right after you die. For pension purposes, children's pensions will be payable to your legitimate or adopted children, but not to the children (including step-children) of a marriage which took place in retirement, nor to children adopted in retirement. Children's pensions are usually paid up to age 16, but can be paid up to age 23 if your child remains in whole time education. If your child has a disability which prevents them from earning a living, it is possible for the pension to remain in payment.
The amount of pension that is paid to a child is 18.75% of the pension you would have received had you retired on health grounds on the day you died. If you have more than 2 children, the maximum payable will be 37.5%. If your child is left an orphan, the amounts payable will increased to 25% and 50% respectively.
If, when you die, you were still married or in a civil partnership, your spouse / civil partner will be entitled to receive a pension in their own right, even if you were separated from them. Entitlement to adult dependent benefits only stops upon issue of a decree absolute or dissolution of a civil partnership certificate.
If you are entitled to receive any benefits from the state for the same injury for which you receive your police injury award then it is important that you claim them as they may be taken into account when calculating the level of injury award you receive from the police.
The regulations contain a list of the state benefits which must be deducted from your injury award before payment, whether you claim them or not. This list is updated from time to time, meaning any new state benefits could be included as deductable amounts. To ensure your injury pension is paid at the correct rate, it is important that you tell your police force if any of the benefits you receive stop or change and also if you become entitled to a new benefit.
When you tell the force, your injury award will be recalculated. If you do not keep the force up to date with details of your other benefits, you may find that your injury award becomes over or under paid. If your award is overpaid the force will recover this from you, if it is underpaid, the force will arrange for the underpayment to be credited to you
Yes. Commutation factors for pensions are prepared by the Government Actuary's Department's (GAD) and are reviewed periodically, as and when GAD judges necessary, although there is no set timeframe in which these reviews are carried out. Normally, reviews are prompted by changes to one or more demographic factors (such as longevity), and can be affected by further changes while they are being carried out.
Neither your employer nor XPS are provided with any advance warnings of changes to commutation factors. When changes do occur, the Home Office will release a circular confirming what the changes are and the date from which any changes take effect. Because of this it is important to remember that any benefit quotations you receive will be based on the factors in force on the day the projection was prepared. If any of the factors are altered before you retire, it will be the factors in force at your retirement date that will be used in your final pension calculations.
If you work part time, you will receive a pension which is based on a fair proportion of a whole time officer's pension. The formula we use to calculate your pension will depend on how many calendar years service you have.
If you have 30 calendar years or less the formula we use is :
(Notional WT pension x Reckonable Service) ÷ Notional WT Service
If you work more than 30 calendar years, the notional WT pension is fixed at 2/3rds of pensionable pay and the Notional WT service is fixed at 30 years
To put this in simple terms, we will calculate your pension using your service on a pro rata basis but use your whole time equivalent pay in our calculations.
Pensionable service may be affected by any periods of unpaid absence.
You will pay contributions for any paid period of adoption leave and service therefore counts towards your pension.
Adoption Support Leave
Week 1 - Full pay - contributions are paid and service therefore counts towards your pension.
Week 2 - If you have more than 26 weeks service you will pay contributions and this service will be reckonable. - paid paternity pay rate & service reckonable.
If you have less than 26 weeks service, Adoption support leave will be unpaid and will not count towards your pension.
Paid Maternity Leave counts towards your pension but:
Any period of maternity leave
Maternity Support Leave
Week 1 - Full pay - Service reckonable
Week 2 - If you have more than 26 weeks service. you will pay contributions and this service will be reckonable. If you have less than 26 weeks service, your maternity support leave will be unpaid and will not count towards your pension.
Regulations were introduced in 2004 that allow you to pay contributions following a period of Parental leave. These regulations allow you to count all periods of paid parental leave as pensionable and give you the option of paying contributions to count periods of unpaid parental leave as pensionable.
You can buy back a period of unpaid sick leave provided you satisfy the following conditions:
If you are aged 55 or over when you retire, or you retire on ill health grounds, your pension will increase each year in line with the Consumer Prices Index (CPI). If you are under 55 and retire on grounds other than ill health, your pension will not increase until age 55. At 55 it will increase to the level it would have been, had it been increased every year since your retirement.
If you have deferred benefits which come into payment before your 55th birthday, your pension will not increase until age 55 unless you are permanently incapacitated for any regular, full time work.
No. Even if you have to wait to get your increased pension we are unable to pay you a lump sum to compensate for the time your pension has stayed static. This is because the government states that pensions increase does not take effect until age 55 unless it is paid early on health grounds or to pensions being paid following your death.
If your benefits become subject to an earmarking Order, your pension rights remain with you and only the percentage of your pension, as determined by the court, is paid to your ex spouse or former civil partner. This means if they die, re marry, form a new civil partnership or live with someone as husband and wife then the pension they receive will stop and again become payable to you. If an earmarking Order was made against your lump sum, your ex spouse would still receive this even if they were to remarry etc.
If your benefits were subject to a pension sharing Order, the court will impose a permanent deduction from your benefits and award this debit as a pension credit to your ex spouse / civil partner. Because this debit is permanent, your ex partner (the credit member) will receive a pension in their own right which remains payable if they remarry or cohabit. If the credit member dies before their pension has been put into payment, a death grant of 2.25 times their annual pension would become payable to their personal representative. If they die after the pension has come into payment then their pension will cease. Once a debit has been applied to your pension as a result of a pension sharing Order it is not possible to reinstate it.
If you move abroad you can choose how your pension is paid. If we continue to pay your pension into your existing account, the payment will continue as normal. Dependant on the country you move to, you may be able to have your pension paid into an overseas account in the local currency. You should contact us for further details regarding this.
Initially your pension will remain taxable in line with the HMRC tax coding currently in place but this may change if HMRC confirm that alternative taxation rules apply. You should contact HMRC directly for clarification on this.
Unfortunately we are unable to advise you on your optimum retirement date as this is a personal decision which depends on a number of variables such as how old you are when you achieve your maximum service (the younger you are, the better the lump sum conversion factor is), whether or not you expect your pay to increase and how much lump sum you want to take from the scheme.
Although we are unable to advise, we are able to provide you with retirement estimates which will assist with your decision making process.
The pensionable pay we use to calculate your final pension benefits is always the best of your last 3 years service, determined in blocks of 365 days and ending on the anniversary of your last day of service.
This means that if the reduction in your competence related threshold payment (or any other pensionable payment) lowers your final year's pensionable pay to a level below one of the two years prior, we will then use the earlier pay to calculate your benefits