Find out more
Protect Police Pensions in Britain
Please help us and yourself by signing the i-petition "Protect Police Pensions in Britain" by visiting:
http://www.ipetitions.com/petition/protect_police_pensions/
We are hearing rumours about what is going to happen to police pensions. At this stage they remain simply that. The career average versus final salary remains speculative and has not advanced beyond the commentary made by Lord Hutton in his initial observations.
The CSR introduced the potential for an average 3% increase in public sector pension contributions together with a change to pension indexation increases from RPI to CPI and these are likely to be included in the spring budget. These and any other changes to the pension scheme will take some time to work through within PNB, particularly if there are significant changes to the pension regulations. Although any increase in contribution could be introduced in time for next April.
For details of what has been published thus far please visit:
www.nypolfed.org.uk/police-and-federation-news/police-news/independent-public-service-pensions-commission-report AND
www.nypolfed.org.uk/publications/pensions AND
http://www.nypolfed.org.uk/assets/uploads/PDFs/Staff_Side_Submission_14-12-10.pdf
On Tuesday 12th January 2011 XpertHR (an organisation not an oxymoron) were warning that “one of the biggest legal changes employers will face in 2011 is the abolition of the default retirement age (DRA).The six-month transitional period begins on 6 April, and the DRA will be completely abolished on 1 October 2011.
When well managed, a more flexible approach to retirement holds benefits for the workplace, employers and employees. However, organisations must be prepared for the practical issues of managing an older workforce including performance management, the impact on insured benefits and succession planning without a compulsory retirement age.”
Please note these comments are set against the backdrop of waiting for the final report from Lord Hutton. You will note, but are unlikely to have seen reported, that Lord Hutton in his interim report comments “I have been struck both by the enormous complexity of the subject matter, as well as by the degree of misunderstandings and confusions that surround any debate about it. My report tries to dispel some of these myths. It is mistaken to talk about ‘gold-plated’ pensions as being the norm across the public sector. In the most part, the pensions that are paid out to public service employees when they retire are fairly modest by any standard, although in part these reflect part-career or part-time working.”
The recommendations are not scheme-specific and there is no suggestion as to how far contribution rates should rise. This means that there is no definite indication as to the implications, if any, for police pensions. In its report, the Commission concludes that the cost of funding public sector schemes has risen, within an increasing burden being shouldered by the tax-payer. According to the Commission, in many public sector pension schemes, at the time when they were initially established employees paid approximately half of the cost of funding those schemes, while today they pay somewhere between a fifth and a third of the cost of accrual. Although the Commission does not make this explicit, members of police pension schemes are at the top end of this range. The report also notes the relatively high contribution rate of police officers.
While drawing no conclusions from this, it is also worth noting that the report contains far more analysis of the Local Government and NHS Pension Schemes. The Local Government Pension Scheme (LGPS) is available to all councillors and elected mayors of an English county council, district council or London borough council or of a Welsh county council or county borough council who are offered membership of the scheme under their council’s scheme of allowances and who are under age 75. These councillors pay 6% of their allowances as a councillor into the LGPS. If they pay tax then they get tax relief on their contributions at the time they are deducted from their allowances and if they pay National Insurance they will pay a lower rate of NI contributions up to State pension age. The council pays the rest of the cost of providing LGPS benefits, which costs the council about double the amount the councillor pays.
And at a national level MPs have their own scheme. The Parliamentary Contributory Pension Fund (PCPF) is a funded final salary scheme, where Members pay a fixed contribution, and the Exchequer is liable for the balance. Until relatively recently members could opt to make contributions of 10% of their salary and accrue (or build up) pension at the rate of 1/40th, or to make contributions of 6% of their salary for pension build up rate of 1/50th. With effect from 1 April 2009, a third option was introduced, for Members to contribute at a lower rate and accrue pension benefits at a rate of 1/60th of salary. If you want to know more about this scheme then visit http://www.parliament.uk/documents/commons/lib/research/briefings/snbt-01844.pdf
