Police Pensions
- Details
- Last Updated on Wednesday, 12 June 2013 12:47
GAD HAVE NOW BEEN GRANTED PERMISSION TO APPEAL AGAINST THE DECISION OF THE HIGH COURT THAT GAD IS WITHIN THE OMBUDSMAN'S JURISDICTION. THE CASE IS TO BE HEARD BY THE COURT OF APPEAL ON EITHER THE 10th OR 11th JULY 2013. CLICK THE LINK BELOW FOR LATEST UPDATE.
OMBUDSMAN UPDATE
Commutation Factors
The announcement of new commutation factors for the police pension scheme made at the Police Federation Conference in May 2008 resulted in a legal challenge to the original commencement date of those factors. The Judicial Review taken by the Police Federation was successful in achieving a new commencement date for those factors of December 2006. Throughout the legal process we kept members informed of progress with the challenge.
Members will be aware that the Fire Service Pension scheme is similar to the Police scheme. From the initial announcement of the ‘new’ factors in 2008, the Fire Brigades Union have taken a different approach to this issue and have encouraged their former members to complain of maladministration of their scheme as no increases to commutation factors took effect from 1998 until the recent increase. We are aware that a number of former police officers are in the process of making similar complaints. We have been in touch with the Pension Ombudsman’s office about this matter and the below statement is published on their behalf in an attempt to assist them. We will continue to be in contact with the Ombudsman over this matter and will consider publishing further advice once the Judicial Review process referred to in the statement is finalised.
‘A number of fire-fighters have complained to the Pensions Ombudsman that the tables of commutation factors of the Firefighters’ Pension Scheme should have been revised by the Government Actuary’s Department (GAD) earlier than they were in 2006, which would have resulted in larger lump sum benefits when they commuted part of their pensions on retirement. Whether GAD is within the Pensions Ombudsman’s jurisdiction is now the subject of court proceedings. Until those proceedings have concluded, which could be as late as autumn 2012, the Pensions Ombudsman cannot investigate the Firefighters’ complaints. The same applies in respect of similar complaints about the Police Pension Scheme. So the Pensions Ombudsman has said that it is reasonable for members not to submit such complaints to him between now (December 2011) and when those proceedings have concluded. If former police officers submit such a complaint to thePensions Ombudsman after proceedings have concluded, the timefrom December 2011 to when those proceedings are concluded, will not count when the Pensions Ombudsman looks at whether the complaint has been made in time.’
POLICE PENSION AND INDEX LINKING
Police Pensions are currently Index Linked from age 55yrs and are increased in line with the Retail Price Index.
Pensions are uprated each April and the level of increase is determined by RPI in September of the preceding year.
The index used to uprate Pensions changed to the CPI in 2010 implemented April 2011.
For details of the increases applied see below:
How Index Linking Works
RPI INCREASES 1948 - 2010
HM TREASURY SITE MULTIPLIER TABLES RE PENSIONS INCREASES
COURT OF APPEAL DECISION RPI/CPI CHALLENGE
The Court of Appeal has now handed down its decision in relation to the Governments switch to the CPI as the index used to uprate pensions.
As you will see the appeal was dismissed.
HOW HAS THE CHANGE AFFECTED MY PENSION?
GUARANTEED MINIMUM PENSION
At State Pension age, although the Police Scheme remains responsible for updating the bulk of your police pension, in line with the relevant index, the State becomes liable to index link the much smaller Guaranteed Minimum Pension element of your police pension. For a full explanation use the link below:
INDEX LINKING OF STATE AND POLICE PENSION
This is not the case however for those permanently resident abroad in a country where the state pension is frozen, which includes; Australia, Canada, New Zealand and South Africa.
In these cases the Police Pension Scheme, by a Treasury Direction (currently dated 6 July 2000) does not reduce their inflation-proofing and the full increase is applied.
See Home Office Library document below from page 21 onwards.
REDUCTION OF POLICE PENSION UPON RECEIPT OF STATE PENSION
We are often asked why the Police Pension reduces when a member starts receiving their State Pension.
Please use the link below to view the explanation.
MODIFICATION OF POLICE PENSION
HOW PENSION INCREASES WORK
POLICE PENSION INCREASES AND STATE PENSION
STATE PENSION UPRATING HOME OFFICE DOCUMENT
BACKGROUND TO PENSION UPRATING
INCREASING YOUR NI CONTRIBUTIONS
PUBLIC SECTOR PENSIONS OVERPAYMENT
Recent questions in the House of Commons and attendant publicity has highlighted an issue of overpayment of pensions to retired public sector employees including those in the police scheme.
This is a complicated issue.
In essence, the problem has to do with the Guaranteed Minimum Pension, its calculation, index linking and impact on the individual's Police Pension index linking.
Guaranteed Minimum Pensions were provided by public service pension schemes between 1978 and 1997. The problem will not affect any pensioner unless he or she is over State Pension age with service in this period and for whom the force have no record of a GMP.
It is estimated that between 1220 and 1830 (1% - 1.5%) police pensioners in England and Wales may be affected by this miscalculation. No overpayments are to be recovered but an adjustment will be made to the pensions of those affected in April 2009.
For those who require more details of the problem and its likely impact we have added a link to the relevant Home Office advice to forces: Home Office Circular 31/2008
To view the National Audit Office Report on errors in the Guaranteed Minimum Pension please use this link NAO report
HOME OFFICE CIRCULARS BY YEAR
FIND DETAILS OF YOUR PENSION ADMINISTRATOR HERE