Pensions
Pensions Update (28th March, 2022)
A number of officers have contacted the Federation regarding Pensions and the Immediate Detriment. There is very little detailed information about what will happen in the immediate future and the information that has been put out to date can be complex and confusing.
The advice from the Federation is to seek independent financial advice before taking any action in relation to your pension.
Background
Following the publication of the remedy to the discrimination in the changes to the transitional arrangements of the 2015 Public Service Pension Schemes, the Government recognised that some officers were going to have to retire or would have to choose to retire as if the remedy was not in place, even though they should have been able by law to avail themselves of the pension of their choosing as if the remedy was in place.
This was challenged nationally by the Police Federation (PFEW) who felt that a rushed implementation would lead to mistakes and inaccuracies which would not be in the interest of any of the parties involved.
However, the government pressed ahead with a remedy date of 31st March 2022 without enacting any new legislation. The legislation will come into effect on 1st October 2023.
The officers affected by this are those who had no protection and joined the 2015 scheme on 1st April 2015 or had tapered protection and joined the 2015 scheme at a point between 1st April 2015 and 31st March 2022.
The Government issued Immediate Detriment guidance, and this determined how affected officers were to be treated between 2015 and 2022. This was further complicated when, on 29th November 2021, the Home Office withdrew the immediate detriment guidance due to Treasury and HMRC concerns.
PFEW are considering legal action and are identifying test cases to take to the High Court. They are also lobbying Government with the other staff associations. The move by the government has left a lot of uncertainty around police pensions and the position is no longer entirely clear.
What does that mean for officers?
Some have already chosen not to retire as they could not afford to retire with the transitional position rather than the remedy position.
Officers who choose to retire will be retired with the transitional position and the remedy will be applied post retirement. This is disappointing but it is a government decision.
What happens now?
As it stands today any officer who is affected by immediate detriment and who wants to retire before the 1st October 2023, will be contacted post-retirement by the Pension Administrators and offered a pension choice for the remedy period 1st April 2015 to 31st March 2022. The choice will be between the 2015 scheme and their legacy scheme. They will be retired with the transitional position and contact post retirement and before 1st October 2023
2006 Pension Legacy Scheme
If the 2006 scheme was their legacy scheme and they opt for that they would be owed a contribution refund.
1987 Pension Legacy Scheme
If the 1987 scheme was their legacy scheme and they opt for that they will owe contributions.
How will that happen?
How this will be practically achieved has yet to be decided. Extra money owed to them due to the remedy paying a larger pension amount will be backdated to the date of retirement. Factors such as interest are another of the unknowns.
I understand that this will leave many questions unanswered and a great deal of anxiety for those about to retire. I would recommend seeking independent financial advice before making any major decisions about your pension.
Andy Philp
Branch Secretary
City of London Police Federation
From Pensions office
It is our current understanding is that all police officers will be moved into the 2015 Scheme with effect from 1 April 2022. At retirement all eligible officers will then be given the choice as to how their service for the period 1 April 2015 to 31 March 2022 is to be treated, either as membership to their ‘legacy’ Scheme or as membership to the 2015 Scheme. Comparative figures will be supplied to police officers when they retire to allow them to make an informed choice. All benefits accrued under the terms of the ‘legacy’ Scheme will continue to be protected under the terms of that Scheme’s Regulations
