The 2006 pension came into effect on 1 April 2006 and all new entrants from that date onwards would join the scheme. 1987 members were offered the opportunity to move across to the 2006 scheme but not many chose to do so.

The scheme closed to new entrants on the 31 March 2015 and closed as an active scheme on 31 March 2022.

The 2006 scheme was a scheme where members accrued a seventieth of pension for each year of membership and there was a maximum accrual of 35/70ths. The minimum pension age was 55 and there was no actuarial reduction for taking benefits at that point.

The member’s guide is in the link.

NPPS_Members_Guide.pdf (publishing.service.gov.uk)

The calculation for the 2006 scheme is:

Pensionable Service/70 x Average Pensionable Pay = Gross Pension.

Maximum Commutation is Gross Pension x 4.

There is no weighted accrual in the 2006 scheme.

Like the 1987 scheme, the 2006 scheme is a final salary scheme. 

There are different provisions to calculate the final pensionable pay and due to recent high inflation, this could see a member have a better position than the final year calculation.

Regulation 24 of the Police Pension Regulations 2006 deals with final salary:

The Police Pensions Regulations 2006 (legislation.gov.uk)

The three ways that the final salary should be calculated and compared are in 24(1).

24(1) (a) is the final salary working a year back from the date of retirement.

24(1) (b) is the two years before the final year but the chosen year can be uprated with pension increases from the end of the chosen year to retirement.

24(1) (c) looks back a further seven years and an average of any three years can be taken and then increased with pension increases from the end of the three chosen years to retirement.

The highest of the above three should be used for the calculation of the 2006 pension.

These are complex calculations but 2006 pension members should be checking that their pension administrators have been carrying out the calculations correctly.

The maximum commutation is four times the gross pension, there is no loss in pension in securing the commutation. There is the ability to increase the pension and take no commutation or a different level of commutation. The factors used are in the link below.  There is no tax implication on commutation in the 2006 scheme.

Police_factors_-_NPPS_Exchange_of_lump_sum_for_pension_16Sept2011.pdf (publishing.service.gov.uk)