Pensions
Engaging with the Government around the police pension schemes is one of our most important areas of work because a police pension has always been regarded as a key element of the remuneration of our members.
Below are the most recent updates pertaining to the Police Pensions.
October 2023 – Remedy Implementation
This update is being published to clarify the position for officers following the beginning of the implementation of the retrospective phase of the McCloud/Sargeant pensions remedy which commenced on 1 October 2023. We hope that the information below will be of assistance in giving the latest position for officers at various stages of the remedy.
Officers who are not immediately approaching retirement
Officers who are eligible for remedy but are not retiring in the next 18 months can expect to receive a Remediable Service Statement (RSS) in the next 18 months. The RSS will detail changes to contributions, tax and benefit accrual for service between 1 April 2015 – 31 March 2022 (the Remedy Period). Until retirement, officers will be deemed to have been members of their original pension scheme (legacy scheme) and will be rolled back to that scheme. At retirement, they will be offered the choice of whether to receive benefits from their original scheme or the 2015 Scheme for the Remedy Period. Between now and retirement, their Annual Benefit Statements will show both options for benefit accrual during the Remedy Period.
Officers who are planning to retire in the next 12 months
PFEW have started to receive anecdotal evidence that officers who are requesting estimated retirement quotes for a retirement date in the next 12 months are being told that this is not possible until the officer provides their notice to retire. PFEW do not accept this position and it is entirely at odds with providing the necessary information for officers to plan for their retirement. We would advise officers to contact their local Federation Branch Board to make them aware, and additionally:
- Make a formal complaint through the administrator’s Internal Dispute Resolution Procedure (IDRP)*
- If the matter remains unresolved, or the complaint response is unsatisfactory, the officer can make a further (second stage) complaint through the IDRP, which is escalated to a more senior level
- If the matter still remains unresolved, the complaint can then be escalated to the Pensions Ombudsman for consideration
Officers who are retiring immediately and not receiving full payment of their benefits on their retirement date
PFEW are also aware that some retiring officers are not receiving their commutation on their date of retirement, and/or pension in the first month of their retirement. This is plainly unacceptable and potentially in breach of the existing Regulations, which may amount to a breach of statutory duty. We have considered the opportunity to take a legal challenge, but it is likely that the matter will have been resolved by the time that it is heard by the court.
Therefore, PFEW suggest that Federation Branches advise officers in this position to follow the complaints procedure outlined above*. Importantly, for these cases, the complaint should specifically request for interest to be applied to both their commutation and pension to reflect the late payment.
*Note: Each administrator will have their own IDRP process/form. Please note that it is not necessary for an officer to complete the administrator’s form in order to lodge a complaint. Complaints may be submitted in writing (email or letter) and must be treated as a complaint provided that the contents explicitly state that the correspondence is being made to commence a formal complaint.
Officers who are retiring immediately and are refused the option of remedied benefits
Any officer retiring from 1 October 2023 (who is eligible for Remedy) must be given the option of choosing their benefits for the Remedy Period. If any force or administrator refuses to provide this to an officer who is now retiring (i.e. no RSS will be issued and the officer will be retired on their benefits ‘as is’) then they should contact their Federation Branch Board who should submit a legal funding request as soon as possible.
Officers who retired before 1st October 2023
If they are in scope of the remedy, they must be contacted before April 2025 and offered their remedy choice. They will be provided with a Remedial Service Statement (RSS) which will show the current position, and the legacy and reformed position for the remedy period. Most administrators are aiming to have this exercise completed in 2024. It is important that the administrators have up to date contact details for these officers. Officers who retired due to ill-health will be dealt with first, followed by the survivors of bereaved officers, and then the rest, with administrators dealing with the worst affected officers in this group first.
Officers who wish to apply for Contingent Decisions
Some officers who opted out (or made other financial decisions related to changes to their pension arrangements) due to the pension changes can seek re-admission to the pension scheme for the Remedy Period through the Contingent Decisions route. Whilst provision for the application of a Contingent Decision is provided for in Regulations, frustratingly there has been very little detail provided as to the exact process. There is no centralised guidance, and decisions as to whether Contingent Decision applications are accepted have been remitted to Scheme Manager discretion. Officers wishing to enquire as to this route should contact their pensions administrator in the first instance. We are hopeful that there will be some guidance issued to Forces shortly around Contingent Decisions.
Please see the link to the FAQs for further information: Pension Remedy FAQs and calculator (polfed.org)
July 2023 – Government publishes response to McCloud / Sargeant remedy: phase two (retrospective) consultation 2023
On 19 July 2023 the Home Office published the Government’s response to the retrospective remedy consultation, which can be viewed here. The response confirms the policy proposals contained within the initial consultation, and we await the final version of the related regulations to be enacted before implementation on 1 October 2023.
May 2023 – McCloud / Sargeant remedy: phase two (retrospective) Government consultation 2023
On 28 February 2023 the Home Office launched its consultation on the retrospective remedy to address the unlawful age discrimination that was identified in the McCloud/Sargeant judgment. The consultation comprised proposed changes (including draft regulations) which are required in order to implement the remedy with effect from 1 October 2023.
Changes to regulations are required ensure all eligible members will be treated as having remained in their original Police Pension (legacy) Scheme for any membership from 1 April 2015 until the end of 31 March 2022 (‘the remedy period’). Following implementation of the remedy on 1 October 2023, members will receive a ‘Remediable Service Statement’ outlining the change to their pension benefits, contributions and tax adjustments for the remedy period. Shortly before retirement, members will be given a choice of whether to retain the membership during the remedy period in their original legacy scheme, or elect for 2015 CARE Scheme benefits for the remedy period instead.
The Policy Department has worked through the detail of the proposals in the consultation and have taken advice from specialist external advisors. On 22 May PFEW submitted a joint (together with the Police Superintendents Association and the Chief Police Officers Staff Association) response to the consultation and we now await a response from the Home Office.
Our joint response can be viewed here
April 2023 – Government Publishes increased Commutation Factors
The Police Federation of England and Wales (PFEW) welcomes the Government’s response to the consultation on the Superannuation Contributions Adjusted for Past Experience (SCAPE) discount rate, which has resulted in an update to the Police Pension Scheme 1987 commutation factors.
The new factors are effective from 3 April 2023 which will directly and positively affect pension benefits of police officers at the time of retirement by increasing the rate at which pension is converted into a commutation lump sum.
Whilst the Government has not allowed for the updated factors to be implemented with retrospective effect, members who are planning an imminent retirement (or retired on or after 3 April 2023) are advised to contact their pension administrator for further clarification and assistance.
You can find out more information about the SCAPE discount rate methodology consultation here.
April 2023 - Immediate Detriment criteria update
The Police Federation is continuing to progress this claim. However, the court process is very slow and we are yet to have a hearing before any judgment can be made. Unfortunately, we cannot give any timeframe at present. Once we have any news or progress this will be shared with the membership.
February 2023 – Consultation on the retrospective remedy
On 28 February 2023 the Home Office launched its consultation on the retrospective remedy to address the unlawful age discrimination that was identified in the McCloud/Sargeant judgment.
The consultation comprises proposed changes (including draft regulations) which will be required to implement the remedy with effect from 1 October 2023.
The changes will ensure all eligible members will be deemed as remaining in their original Police Pension Scheme for service between 1 April 2015 and 31 March 2022 (‘the remedy period’).
Following implementation of the remedy, members will receive a ‘Remediable Service Statement’ outlining the change to their pension benefits, contributions and tax adjustments for the relevant period.
On retirement, members will be given a choice of whether to retain the service in their original scheme, or elect for 2015 CARE Scheme benefits for the remedy period.
The Policy Department are currently working through the detail of the consultation to inform PFEW’s response, and are working alongside colleagues in In-House Legal in addition to seeking advice from specialist external advisors.
The consultation document is viewable on the gov.uk website here.
September 2022 – Letter from the seven UK Staff Associations to the Home Office
PFEW and the six other UK staff associations wrote collectively to the Home Office to express our shared concerns around a number of pension related subjects. The issues raised include implementation of the second phase of the remedy to the unlawful age discrimination identified in the McCloud/Sargeant judgment, the pensions trap, and the overall relationship that Home Office officials have with those who represent serving officers across the country. The letter can be accessed here.
March 2022 - Public Service Pensions and Judicial Offices Act 2022 (PSP&JO Bill)
The government introduced the Public Services Pensions and Judicial Offices Bill (PSP&JOB) to legislate how they will remove the discrimination identified by the courts in the way that the 2015 pension reforms were introduced. The guidance can be accessed here.
March 2022 – Pension remedy FAQs
Click here to find a comprehensive FAQ document regarding the pension remedy. This document is designed to answer FAQs about the Government’s intended remedy to the unlawful discrimination caused by the transitional protections under the Police Pension Scheme 2015 (the 2015 CARE Scheme) following the McCloud/Sargeant Court of Appeal decision.
A remedy calculator (My Own Pension - McCloud) is now available for members or former members of the Police Pension Scheme 1987 to use. Action is being undertaken to look to include Police Pension Scheme 2006 members and further communications will be issued to advise once this is available.
PFEW is aware the Fire Brigades Union (FBU) published a circular on 25 March regarding members who opted out and are intending to seek re-admission into the pension scheme (for the Remedy Period) through the ‘contingent decisions’ route. The Home Office has not published updated guidance or information on this matter and as such, PFEW maintains the position as stated in 3.12 of the remedy FAQ document.
November 2021 – Immediate Detriment Guidance withdrawn
Following further discussions between HMT and HMRC, on 29 November 2021 the Home Office withdrew its informal and non-statutory Immediate Detriment Guidance, stating that in the light of uncertainty around the legal position and the risk of generating unintended tax consequences for members such cases should not be processed prior to the relevant legislation being put in place.
On 22 March 2022 having obtained further legal advice on the matter the NPCC wrote to Chief Constables advising them to cease use of the Immediate Detriment guidance.
PFEW are currently exploring the possibility of taking legal claims on this matter.
June 2021 - Guidance for members about to retire
The Home Office has now issued an update to the existing informal and non-statutory guidance on immediate detriment cases.
The guidance applies to pipeline immediate detriment cases (i.e. those cases where the member is about to retire and receive their pension) and does not cover where a pension is already in payment. This is technical guidance and aimed primarily at pension managers and practitioners.
As you will know, to implement remedy in full, both primary and secondary legislation are required, as well as administration work (at local Force level) to implement the changes. The deferred choice underpin will be implemented by October 2023.
As a result, the guidance will not offer resolution to all the current issues – there are outstanding technical issues that are being worked through across the public sector pension schemes and the responsible Government departments. The updated guidance aims to provide ways forward where possible.
The guidance provides informal advice but the overall responsibility for interpreting and applying the pension scheme regulations still remains with each Chief Constable as the relevant scheme manager. Forces and administrators will need to consider the guidance in relation to their own process and systems.
April 2021 - Seeking evidence that Remedy will not cause further discrimination
On 20 April 2021 we wrote to the Home Secretary to seek evidence and clarification that the implementation of the public sector pensions Remedy would not cause further discrimination to any of our members. You can read the letter here.
In our response to the Remedy consultation we raised serious concerns around the impact of the Remedy proposals on some groups of members. Our letter to the Home Secretary invites comment and justification on a number of potential issues that we have identified in our initial response to the Government’s proposed Remedy to the discrimination.
We have also written directly to the Home office on a number of other concerns including taxation implications of the Remedy, the position of late joiners to PPS 87, and non-club transfers affected during the Remedy period. Additionally, we continue to discuss the logistics of the implementation of the Remedy with the Police Scheme Advisory Board.
February 2021 – Government consultation response
We have now had the opportunity to go through the Government’s consultation response in detail and have met with the Police Scheme Advisory Board to establish what this means for all of our members on the varying schemes.
In short summary the Government response details that:
- The Remedy applies to all who were members of a ‘legacy’ public service pension scheme (or eligible to be) immediately prior to 1 April 2012 and have a period of service after 31 March 2015 during which they were members of a legacy or reformed scheme.
- If you joined the police service on or after 1 April 2012 the Remedy will not apply to you.
- The Remedy period is 1 April 2015 to 31 March 2022. Eligible members will have a choice on retirement whether their scheme benefits relating to the Remedy period remain in their legacy scheme, or they choose to convert it to 2015 scheme membership. This is particularly helpful as we know there will be some who are better off in the reformed schemes than the legacy schemes.
What is positive from the response is that the Government has chosen to implement the Remedy through the Deferred Choice Underpin option, which was the option we recommended in our response to the consultation back in October 2020. This means that members do not have to choose which scheme they receive benefits from during the Remedy period until they reach retirement age and enables them to make their decision based on fact rather than an estimate.
You can find Q and A’s with more information here.
