Correspondence

Circular: Police Pensions (Amendment) Regulations

Home Office circular 009/2010 on Police Pensions (Amendment) Regulations 2010, SI No. 431 and a related miscellaneous issue.

From:
Home Office
Published
12 May 2010

Documents

Pension ages and taxation - Annex A (PDF file - 1mb - Warning: large file)

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Details

Home Office circular 009/2010

  • Broad subject: Police Service
  • Issue date: Wed May 12 11:02:36 BST 2010
  • From:
    Crime Reduction and Community Safety Group (CRCSG) Police Reform and Resources

  • Linked circulars:
    Circular No 023 / 2008

  • Sub category: Police pensions
  • Implementation date: Wed May 12 11:02:36 BST 2010
  • For more info contact:

peter.spreadbury@homeoffice.gov.uk

Police Pensions (Amendment) Regulations 2010 SI No. 431

The changes brought in by the amendment regulations are in the four broad areas as follows:

  • Technical changes to bring the old scheme (Police Pensions Regulations 1987) into line with the new scheme (Police Pensions Regulations 2006), to make corrections and to update references to tax legislation and other enactments.
  • Referring to the scheme actuary rather than the government Actuary’s Department.
  • Bringing the medical appeal process in line with the current contract with Health Management Limited (agreed by the PNB), by extending from 10 working days to 21 calendar days the period within which causing the cancellation or postponement of an appeal hearing may attract a penalty charge.

Provisions for chief officers in view of the forthcoming pension age tax changes:

  • putting on a statutory footing the right provided in the PNB Chief Officers’ Pay Agreement of 2004 to retire with an ordinary pension from age of 50
  • giving police authorities the discretion allow an officer, who is under 50 and is retiring one day before he or she reaches 30 years’ service, to take a large lump sum when the pension comes into payment at 50.  We have confirmed with CLG and MOD that such a provision would not create a problem for the Firefighters’ Pension Scheme or the Armed Forces’ Pension Scheme.

These changes have effect from 1 April 2010 unless otherwise stated.

Technical changes (schedules 1 and 3)

There are several amendments which bring the wording of the old regulations in line with the new regulations:

  • Paragraph 2 of Schedule 1 updates the provisions relating to alteration in police areas (regulation A15(1) [1987] to match 86(1) [2006]).
  • Paragraph 3 of Schedule 1 omits the need for written consent (regulation A17 [1987] to match 17 [2006]).  This omission is in line with the work carried out by the PNB to enable some HR functions to be delegated to below chief constable level.
  • Paragraph 7 of Schedule 1 updates the provisions relating to the commutation of small pensions (regulation B8 [1987] to match 38 [2006] and refer to the correct parts of the Finance Act 2004).
  • Paragraph 9 of Schedule 1 introduces an element of discretion into payments of lump-sum death grants to the estate of a deceased officer in order to make them more tax efficient (regulation E3A(4) [1987] to match 46(4)(d) [2006]). A discretionary power means that the payment does not attract inheritance tax.
  • Paragraph 11 of Schedule 1 updates the provisions relating to the application of Pensions Increase to derivative pensions (regulation E9 [1987] to match 50(2) [2006]).  The Pension Increase Acts apply to “official pensions” which are those specified in Schedule 2 to the PIA 1971.  Paragraph 43 of Schedule 2 includes pensions payable under the Police Pensions Act 1976 as official pensions.  However, derivative pensions are not included in this paragraph.  A derivative pension is one which is not payable in respect of the pensioner’s own services and is not attributable to the pensioner having become entitled to a pension credit.  Adult survivors’ pensions and child survivors’ pensions are derivative pensions.  It was decided when drafting the Police Pensions Regulations 2006 that the reference in paragraph (2) to Section 3 of the PIA was necessary to avoid double-indexation and that the possibility of double-indexation applied to adult survivors as well as children’s pensions.

There are also amendments which update or correct the regulations:

  • Paragraph 5 of Schedule 1 deletes a reference to an injury award in payment being able to block the payment of a deferred pension since this insertion is incorrect. (see Schedule 1 to the Police (Injury Benefit) Regulations 2006.)
  • Paragraph 8 of Schedule 1 updates the tax references in regulation B11 [1987].
  • Paragraph 10 of Schedule 1 updates the reference to relevant allowances (regulation E8 [1987]).
  • Paragraph 12 of Schedule 1 updates the statutory reference in the paragraph so that it now refers to the Police Service of Northern Ireland (regulation F3 [1987]).
  • Paragraph 13 of Schedule 1 removes the reference to not allowing a free-standing AVC to be transferred-in.  This prohibition is no longer appropriate as these pensions are classed as personal pensions.
  • Paragraph 14 of Schedule 1 deletes the reference to written consent in A17 [1987] in line with the amendment at paragraph 3 (regulation F8 [1987]).
  • Paragraph 15 of Schedule 1 removes the reference to disciplinary proceedings as a reason for stopping a transfer-out (regulation F10 [1987]).
  • Paragraph 16 of Schedule 1 deletes the proviso that one cannot opt out twice from the Police Pensions Scheme 1987 (regulation G4(5) [1987]).  This enables a person who would otherwise be prevented from making a late transfer to the New Police Pension Scheme to do so.
  • Paragraphs 17 and 19 of schedule 1 repeal regulation J1(6)(a) [1987] and paragraph 9(4) of Part I of Schedule J [1987] since regulation B8 [1987] as amended now refers to the requirements of the Contracting-out Regulations.
  • Paragraph 2 of Schedule 3 omits the reference to written consent from the chief officer of the force (regulation 5(b) [2006]).

References to the scheme actuary (schedule 2)

Public service pension schemes are now able to appoint someone other than the government Actuary to provide them with actuarial services.  This amendment enables us to contract out actuarial services to someone else if we wanted to, without having to change the regulations first.

Schedule 2 replaces all references in the Police Pensions Regulations 1987 to the government Actuary with references to the Scheme actuary, in line with the Police Pensions Regulations 2006.

Police Medical Appeal Board costs

Both the old and new pension schemes and the Police (Injury Benefit) Regulations 2006 are amended in relation to the costs of a Police Medical Appeal Board.  The amendment extends the period in which a party to the appeal will be liable to pay the medical appeal board costs arising from a cancellation or postponement of the medical appeal hearing.  This brings the regulations into line with the current contract, introduced in HOC 23/2008.

Paragraph 18 of Schedule 1 amends Schedule H of the Police Pensions Regulations 1987; paragraph 3 of Schedule 3 amends regulation 74(10) of the Police Pensions Regulations 2006; and paragraph 2 of Schedule 4 amends Schedule 6 of the Police (Injury Benefit) Regulations 2006.  We have also taken the opportunity to bring the wording in line with the current wording in the Police Pensions Regulations 2006, so that the trigger point is based on proximity to the date appointed for the hearing. 

Earnings Cap

Police Authorities and pensions administrators are reminded that Regulation G1(1A) of the Police Pensions Regulations 1987 limits the amount of salary that can count as the pensionable pay of a police officer who joined the Police Pension Scheme 1987, on or after 1 June 1989. This limit is referred to as the ‘earnings cap’.  This means that pension contributions are only paid on earnings up to the cap.  The earnings cap in 2010/11 is £123,600.  There is no earnings cap under the new Police Pension Scheme 2006.

John Gilbert

Head of Police Pensions and Retirement Policy Section 

Published 12 May 2010