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Revised commutation for the Police Pension Scheme
Dear Colleagues
Please find the attached revised commutation factors for the Police Pension Scheme (PPS) 1987, which have just been issued by the Government Actuary’s Department (GAD). The new factors will apply to any member who retires on or after 20 April 2011.
The factors for all ages have been increased. However, please note that, as some of the revised commutation factors are now higher than 20:1, there may be tax implications for some members. This is because the value of the commuted lump sum may now exceed the maximum permitted by HMRC, which is currently 25% of the total value of benefits vested. If the commuted lump sum does exceed the HMRC limit of 25%, the amount of the lump sum in excess of that limit will be deemed an unauthorised payment and subject to a 40% tax charge.
I would recommend members seek independent financial advice on their own particular circumstances.
Disappointingly we were only informed of these changes by the Home Office yesterday. I understand that they will shortly promulgate a Home Office Circular on the revised commutation factors, which I will ensure is circulated.
Regards
Ian Rennie
General Secretary
Police Federation of E&W
29th APRIL 2011
You can read the revised commutation factors for the Police Pension Scheme by clicking here
