Home Office circular 008 / 2003
THE POLICE PENSION AVC SCHEME - AMENDING REGULATIONS/ MISCELLANEOUS AMENDMENTS
Dear Chief Officer
Home Office Circular (HOC) 59/2002 issued on 16 October 2002 indicated that a Circular would be issued notifying you of amendments to the Police Pensions (Additional Voluntary Contributions) Regulations 1991. This Circular notifies you of these amendments, which are contained in Schedule 2 to The Police Pensions (Amendment) Regulations 2003 (Statutory Instrument 2003 No. 27).
This Circular also provides information on Schedule 1 to these Amendment Regulations, which concerns miscellaneous amendments to the Police Pensions Regulations 1987 dealing with:
(a) fixed term appointments
(b) maternity leave
(c) widowers’ benefits
(d) drafting points recommended by the Joint Committee on Statutory Instruments.
The amendments came into effect on 10 February. This Circular should be brought to the immediate attention of the administrators of the Police Pension Scheme, payroll officers, and force personnel officers.
Schedule 2 AVCs
Choice of AVC provider - Schedule 2, paragraphs 1 - 4
- The appointment of Standard Life Assurance Company as an additional AVC provider was covered in HOC 59/2002. This enables officers to make contributions to the Police Pension AVC Scheme with either Standard Life or the Equitable Life Assurance Society. This amendment is backdated to 1 December 2002 when Standard Life’s AVC product was launched. Officers who are considering investing in this product may obtain Standard Life’s information pack by telephoning the company’s helpline on 0800 333315 or by downloading it from the website at www.standardlife.co.uk/police
Transfers out of in-house AVC - Schedule 2, paragraph 5
5. Introduces a new __Regulation __10A under which officers may request that monies realised from their investments with the AVC providers in the Police Pension AVC Scheme be transferred out of the Scheme. A transfer to a free-standing additional voluntary contributions scheme (FSAVC) is the only possible route for transfers from the Police Pension AVC Scheme independent of main scheme benefits. This is subject to the restriction that the officer must already be a participator in the accepting FSAVC.
- Transfers out of the Police Pension AVC Scheme together with main scheme benefits
may be made to FSAVCs, other employers’ in-house AVC schemes, personal pension schemes or other Inland Revenue-approved schemes.
Deferment of purchase of annuity - Schedule 2, paragraph 6
- HOC 48/1999 advised that in view of the new flexibility allowed by the Inland Revenue, officers retiring on or after 1 November 1999 may elect to defer purchasing an annuity from the date that main scheme benefits came into payment up to his or her 75th birthday. Forces were asked to apply this administratively until the Regulations were amended. However, only paragraph 6(b) is backdated to 1 November 1999, in order to confirm that officers who have retired on or after that date have not been subject to the requirement to make a pension election within a month of retirement under regulation 11(2). The former pension regulations remain in force and still apply for officers retired before 1 November 1999.
Choice of annuity provider - Schedule 2, paragraphs 1, 6
- Also amends Regulation 11 of the 1991 Regulations to enable members to select the provider from any insurance company he or she specifies under that Regulation, instead of from the list of pension providers in Schedule 1 to the Regulations. This amendment is not backdated and the references to the term “pension provider” in Regulation 11(4) and the related Schedule 1 have therefore been retained. The definition of insurance company (in paragraph 1) follows advice given by the Treasury on the changes stemming from The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 (S.I. 2001/3649).
Death in service - Schedule 2, paragraph 2
- Only Equitable Life Assurance Society offer death benefit cover at present. However, to enable flexibility in the future without having to amend the Regulations again, the Regulations as amended now enable any approved AVC provider to provide death benefit cover.
Responsibility for payment of annuity - Schedule 2, paragraph 8
- To provide that the annuity provider, and not the police authority, has the responsibility for the regular annuity payments to the scheme member and for the payment of any lump sum under Regulation 11(5) (if the participator dies within 5 years from the commencement of the pension). In these two cases the police authority has discharged its liability. The police authority retains the liability for all other lump sum payments.
Schedule 1 Miscellaneous
Fixed term appointments - Schedule 1, paragraph 2
__Regulation B1 and the issue of extensions to fixed term appointments has already been amended by Statutory Instrument 2002/2529 as referred to in Home Office Circular 63/2002. We have now amended regulation B1(3)(ba) to make it clear that ACPO-rank officers (with at least 25 years’ reckonable service) who retire at the end of their fixed term appointment qualify for an ordinary pension under Regulation B1 before the age of 60. The officer is entitled to an ordinary pension under Regulation B1 before age 60 even if the fixed term appointment could have been further extended. This provision affects appointments made for a fixed term, or varied to a fixed term or an appointment extended for a further fixed term.
Please be aware that this is a different provision from that which the PNB Circular 3/02 sought approval for, regarding the Police Pensions Regulations being amended further so that chief officer ranks were entitled to an ordinary pension before 60 under Regulations B1 under the same conditions as other ranks. We are still considering this issue.
Maternity leave - Schedule 1, paragraph 3
- Increases the period of maternity leave which counts as pensionable service that is reckonable from 14 to 18 weeks. This should be backdated to cover periods of maternity leave falling on or after 15th December 1999.
Widowers’ benefits - Schedule 1, paragraph 1, 4
The Police Pension Regulations were amended in 1994 by S.I. 641 to allow female officers to elect to make back payments of pensions contributions so that their service prior to 17 May 1990 counts for the purposes of widowers’ benefits. This option was open only to officers who were contributors during a 3-month election period commencing on 1 April 1994, plus officers who were not paying contributions before the end of the election period but who resumed doing so within 2 years from the date the contributions ceased.
The amendments allow officers who were excluded from the original provision because they had had a career break of longer than 2 years at the time of the original election period in 1994, to make these back payments of pensions contributions.
There is the same three-month period from the amendments coming into force (10 February 2003) for making an election and so we advise forces to alert women officers to this provision and the time limit for elections. Officers who had left service before the end of this election period but who rejoin later may also elect to make back payments within the period of 3 months from when the contributions become payable again.
Only regulation G6(13)(b) applies to women taking up the new provision so that their periodical payments cease after 5 years. A new table of factors has been prepared by the Government Actuary’s Department for this purpose and are annexed. These tables should hold good for all cases, whatever the length of career break, provided the buy-back is made by an officer serving full-time. We will provide separate advice on how officers who are now in part-time service can also buy back all their pre-1990 service within 5 years.
Separate consideration is being given to an amendment to enable women officers paying under the existing arrangements to vary their top up rate in view of career breaks, changes in their conditioned hours etc.
Please note that paragraph 1 amends regulation A9 so as to enable reckonable service to
be apportioned for the purposes of regulation G6.
In case of future claims by officers that they were not notified of these provisions, we would advise administrators to keep a record of who has been notified and how this was done and to ask officers who do not intend to make an election to sign a statement to that effect, which is kept with their pensions records.
Drafting points recommended by the Joint Committee on Statutory Instruments - Schedule 1, paragraph 4
21. The Joint Committee on Statutory Instruments made suggestions on the drafting of the original provisions in 1994, as relates to pensionable service being reckonable by reason of service or employment, to ensure consistency across the regulations.
Head of Police Pensions & Retirement Policy Section