Police Scheme FAQs
What pension scheme will individuals be a member of from 1 April 2022?
From 1 April 2022, all those who continue in service will be eligible to do so as members of their respective reformed pension schemes (i.e. those introduced in 2015, of which many are already members), regardless of age. This includes members who were previously covered by ‘transitional protection’.
This means that any pension benefits after that point will be earned within the reformed pension schemes, but any benefits earned before within the legacy schemes up until that point will be protected.
How will people who retire before the introduction of the deferred choice underpin be treated?
Members who have retired before the DCU is implemented and have a period of relevant service between 1 April 2015 and 31 March 2022, will be offered a choice once the legislative changes have been made to implement the DCU. The choice will be retrospective and backdated to the point that payment of pension benefits began.
In some cases, it may be possible for schemes to offer members a choice before the DCU is implemented.
However, the legislation that allows schemes to do this is limited in effect. It allows schemes to return eligible members who retired from the reformed schemes to the legacy schemes in relation to service after 1 April 2015 but does not allow for all consequential matters to be dealt with satisfactorily in all cases. So, for example, in cases where there are interactions with the tax system, perhaps where members have incurred or will incur tax chargers or where contributions differ between the schemes, it might not be possible to address all these issues before new legislation is made to implement the DCU.
Where possible, schemes will seek to offer reformed scheme members who retire before October 2023 a choice of legacy or reformed scheme benefits for the relevant period at retirement.
In due course it may be possible for schemes to revisit cases of reformed scheme members who have already retired ahead of the introduction of the DCU.
However, there are still some complex issues to be resolved before schemes are in a position to process cases - further details will be provided as soon as possible. In all cases where an individual receives a revised pension award, this will be backdated to the date their pension award relating to the remedy period was originally made.
Will members who had ‘tapered protection’ also be asked to choose between legacy and reformed scheme benefits?
Members who received tapered protection in 2015, or would have received such protection but for the provision that unlawfully excluded younger members from transitional protection, will be offered a choice of whether to receive legacy or reformed scheme benefits in relation to any continuous service between 1 April 2015 and 31 March 2022.
This will remove the discrimination that arose between older members who were subject to transitional protection and younger members who were not.
Will the survivors of eligible members who have died since 1 April 2015 also be asked to make a choice between the different pension schemes?
If an eligible member has died since 1 April 2015, we will review these cases as a priority. Where the member retired from the reformed scheme, schemes will seek to revisit cases ahead of the introduction of the DCU where this is possible. We will investigate whether a higher pension or lump sum amount would be due under the alternative scheme.
In the case of any increase, we will inform surviving beneficiaries and the higher amount will be paid with their agreement. If the higher amount is already in payment, the survivors will be notified.
The choice between benefits will fall to the late member’s surviving spouse or partner.
If there are children also in receipt of a survivor pension, and the decision maker lives in a separate household to the child, any decision taken will not affect the child’s pension. Where the child and decision maker live in the same household, the usual rules around total survivor benefits payable will apply.
What are the differences between the legacy and reformed schemes?
All public service pension schemes have different arrangements, however, the main changes between the legacy and reformed schemes for most schemes included a change to career-average pension schemes from final salary and an increase in normal pension age.
The change to career-average means member’s pensions are now calculated on their average salary throughout their career as opposed to their final salary.
The reformed schemes were designed to make public service pensions more affordable and sustainable for the future, while still ensuring public servants received appropriate pension provision at retirement.
The reforms created a fairer system. The move from (mostly) final salary to career average pension means members accrue their pension at a typically higher annual rate based on their average salary. Although some members are better off in legacy schemes, the reformed schemes are more beneficial for others, particularly many lower paid members.
Why is the government saying all members should be in the reformed pension schemes from 1 April 2022?
The reasons for the 2015 reforms still stand: the government is committed to ensuring generous public service pension provision, but this has to be affordable and sustainable in the long term. . The reforms aimed to achieve this, whilst also being fairer to lower and middle earners.
The 2015 schemes that were introduced following the recommendations of the Independent Public Service Pensions Commission (the reformed schemes) offer generous pension provision, improve affordability and sustainability, and are fairer to lower and middle earners.
The reformed schemes are some of the most generous available in the UK: backed by the taxpayer; index-linked; and offering guaranteed benefits on retirement; comparing very favourably to the typical private sector scheme.
The move from (mostly) final salary to career average pension means members accrue their pension at a typically higher annual rate based on their average salary. Although some members are better off in legacy schemes, the reformed schemes are more beneficial for others, particularly many lower paid members.
The transitional protection policy, which gave rise to discrimination, will have been removed and, from 1 April 2022, all those who remain in service will do as members of the reformed schemes, treating everyone equally in this respect, and ensuring the aims of the 2015 reforms are met.
Will these pension changes result in any tax changes for members?
The majority of members will see no change to their tax position over the remedy period.
For a minority of members, the pension changes will cause their tax position to change, which could result in tax charges for the member, or the member becoming entitled to a reimbursement of tax previously paid.
In some cases, the pension changes may mean that individuals will have to pay new or higher annual allowance charges, but typically only where their projected pension at retirement has increased. Adjustments to lifetime allowance charges may also be required, where retired members’ accrual changes.
Some members may also face changes in their contributions in respect of the remedy period, which may also affect their income tax position.
Where a member has already retired, a member’s total pension income may also change, and tax will be payable on any increase in pension.
I am a taper protected member. What does this announcement mean for me?
Members who received tapered protection in 2015 will be offered a choice of whether to receive legacy or reformed scheme benefits for the entire period of 1 April 2015 to 1 April 2022 (or their retirement date, if earlier). This is consistent with the Court of Appeal judgment that discrimination applied to all of those who did not receive full transitional protection.
Can I still retire after 30 years of service?
As set out in the consultation response in more detail in Chapter 3, Future Pension Provision, “since the legacy schemes have a lower Normal Pension Age (NPA) than the reformed schemes, members who have accrued service in both types of scheme may choose to retire when they reach that NPA, and the relevant Minimum Pension Age (MPA) has been reached, and access the relevant pension benefits from both schemes. They will not have to wait until the NPA in the reformed scheme, which in most schemes is linked to State Pension Age (SPA)”.
For the police pension scheme this means that individuals can still retire after 30 years’ service, subject to the normal rules.
If I remain in service but opt out of the 2015 scheme before reaching 30 years’ overall pensionable service, can I still access the full PPS lump sum?
No, in line with current provisions you must reach 30 years’ service or age 55 in order to access the unrestricted PPS lump sum.
When I move to the 2015 scheme, what salary will be used to calculate my PPS/NPPS benefits?
The 2015 scheme contains a “final salary link”, meaning that the legacy scheme benefits will be calculated using the final salary at the time you retire.
I was eligible for remedy but have since opted out. If I re-join before April 2022 and within 5 years will I still be able to have a choice of 1987 or CARE benefits for the remedy period?
Yes, in relation to the period of your pensionable service during the remedy period.
I am due to retire before remedy is implemented, how will my benefits be worked out?
As things stand your pension will be calculated on the basis of your current circumstances, and corrected as soon as the legislation allows. We hope to be able to provide a fuller update on this shortly.
If I opt out of last few months/year of CARE, do I still get the benefit of weighted accrual in my PPS benefits, or does it revert to a straight accrual?
Under the current provisions, weighted accrual continues until you opt out of the 2015 scheme, becoming a deferred member of both the 2015 scheme and PPS.
I am due to taper into the PPS 2015 in May 2021. Will I still transfer in May 2021 or will I remain in the 1987 scheme until 31 March 2022?
The UK Government has advised that tapering provisions should continue until the legislation changes. However we hope to provide an update soon.
Will non-claimants receive injury to feelings compensation alongside these retrospective pension changes as claimants will?
A deferred choice underpin will apply to all eligible scheme members regardless of whether they have made a legal claim. Members do not need to submit a legal claim to benefit from these changes.
Any further legal claims for compensation made by claimants in respect of their individual circumstances will be decided by the courts. Remedy hearings for the claims against firefighters’ pension scheme (known as the Sargeant case) are underway. We are unable to comment further on ongoing litigation.
The consultation response says all Ill Health Retirement (IHR) cases will be reviewed as soon as practicable. What does this mean?
The government sees addressing Ill Health Retirement (IHR) cases as a priority, as set out in the consultation response in Annex A “all Ill Health Retirement cases (including members refused IHR) will be reviewed by schemes as soon as practicable. This will involve reconsideration of cases where they may have been a different outcome (or higher pension award) under the alternative scheme.”
The Government is working hard to resolve outstanding areas that need to be addressed before some members will be able to have their cases reviewed. There are some complex outstanding issues to work through, which means it may not be possible to resolve some cases, particularly for those who have retired and are already in receipt of some pension, until after the deferred choice underpin and supporting legislation are in place. Any additional payments of pension that result will be backdated.
I will now receive an extra seven years’ pensionable service in the PPS. If I leave shortly after joining the 2015 scheme in 2022, what benefits will I be able to access?
As now, if you have 25 years’ service you can retire from the police service with your PPS benefits. However, you will not be able to access the 2015 scheme benefits until you reach age 55. If you are in active service at age 55, the pension is reduced by reference to normal pension age (60). However if you access benefits from deferred status, the reduction is by reference to state pension age. This means the annual pension from deferred status will be lower than if you were in active service. You can read more about early retirement factors here.
What are the normal and minimum pension ages for the 2015 scheme?
The normal pension age is 60. That is the age from which you can take you 2015 scheme benefits without reduction. Reduced benefits can be payable from age 55, which is the minimum pension age under UK pensions legislation.
The UK Government is currently consulting on raising the normal minimum pension age – am I affected by this?
No, the police pension scheme is exempt from these changes.
What is weighted accrual?
Officers will stop accruing service in the legacy schemes upon moving to the 2015 scheme. However, under the 2015 scheme there is a mechanism for former members of the PPS to receive additional PPS accrual to reflect the doubling of service they would otherwise have gained.
For example, this means that if an officer had accrued 15 years in the PPS, and continued to serve to 30 years, the PPS accrual would convert from 15/60ths to 15/45ths.
I will be over age 50 and have 25 years’ service in the 1987 scheme on 1st April 2022, are there any benefits of staying in the scheme or should I take early retirement?
If you continue in service you will begin to build up benefits in the 2015 CARE scheme which can be accessed from age 55. In addition if you continue to serve until reaching 30 years’ calendar service as an officer, you will be able to access your 1987 lump sum without restriction.