Lifting of pension commutation restrictions blocked

05 September 2017

police pension

The Home Office is refusing to allow the potential lifting of the pension commutation restriction for officers in the Police Pension Scheme 1987 with between 25-30 years’ service unless it is funded by forces. Due to budget cuts faced by the service in recent years, it is now very unlikely that these new rules will be used because forces cannot afford to do so.

National General Secretary Andy Fittes said: “We have lobbied for a number of years to remove this restriction. Officers who do not want to do the job anymore, and who are in the upper pay scales and nearing retirement should be allowed to leave without penalty – this benefits the service, which is already low on funding and morale.”

Members of the 1987 Scheme who retire with between 25-30 years’ pensionable service are currently restricted in the amount they can commute on retirement to 2.25x the initial annual pension.  

Home Office ministers had agreed to amend the regulations. In January, we were consulted on draft regulations which would allow chief officers discretion to lift the restriction within their forces. However, the force has to fund the difference between the 2.25x provision and the larger commutation payment.

In our response to the consultation, we stated that:
• the current restriction should be removed in its entirety and not be subject to chief officer discretion;
• the current restriction prevents officers who wish to retire from doing so;
• chief constables/forces should not be required to fund the difference in payment; and
• in its proposed form, we believe the need for forces to fund this will be a barrier and the higher commutation provision won’t be used.

The National Police Chiefs’ Council has similar views to us on the funding of this provision, but the Home Office is refusing to consult further on it.