Question about police pensions

[Red 4]

sidicks said:

Red 4 said:

My book says different - but that's the '87 scheme (like i said)..

See above, you were too quick for my edit / update !

OK, no probs.

Thanks for your edit/ additions to your earlier post..

[anonymous-user]

Red 4 said:

La Liga said:

Sidicks, do you know what flexibility someone has with their pension if they leave the police early well before 50 etc.

Is there a way to move it into a SIPP?

Apols for sticking my nose in, but do you think you'd get a better deal elsewhere ?

10 years on the '06 scheme (or thereabouts) ?

I made the '87 scheme by a small margin and then migrated on to the 2015 with everyone else.

I 'need' to manage my own pension which suits the nature of work I'm in now, so was curious if somehow what I accrued in the police pension could be placed within it (somehow).

sidicks said:

La Liga said:

Sidicks, do you know what flexibility someone has with their pension if they leave the police early well before 50 etc.

Is there a way to move it into a SIPP?

Sorry, I’m not sure if there is the option of a transfer value out of the scheme. Seems unlikely but I could be wrong - advising individual members isn’t my area of expertise.

Thanks for the reply.

[sidicks]

La Liga said:

I 'need' to manage my own pension which suits the nature of work I'm in now, so was curious if somehow what I accrued in the police pension could be placed within it (somehow).

One thing you need to be aware of is the Lifetime allowance, which is £1m for 2017/18. When in a DB scheme, you get to multiply your expected pension by 20, so you could get to an expected £50k pension before having to worry about this.

In reality the fair value adjustment factor would be closer to 40, rather than 20, meaning that your transfer value for the above pension could be closer to £2m rather than £1m, assuming a 'fair' transfer value is paid.

That's a very simple, high level comparison - you need to speak to someone who is familiar with the application of these limits for individual members - Jockman on the Finance forum is probably a good start.

[Red 4]

La Liga - I'd contact pensions for a definitive answer.

I've got 2 books on the '87 scheme and unfortunately they provide conflicting information in some areas, so I won't rely on them.

i.e. I don't want to give you any duff information in relation to something so important.

There's a fair chance time limits will apply though, so I'd act sooner rather than later.

Edit; I found this bit - it might be useful to you (or it might not).

https://www.legislation.gov.uk/uksi/1987/257/regul...

If you can decipher the meaning please let me know.

Edited by Red 4 on Monday 26th February 20:57

[anonymous-user]

I'm seeking advice I just wanted to run it past those on here who may have done sometime similar.

[ED209]

Red 4 said:

ED209 said:

Almost exactly my situation with 18 on 1987 and 22 on the 2015 scheme if I stay until 60. This won't be happening though. I can see me going at 50, taking my 1987 bit and getting another less stressful job.

Have you worked out what the 1987 bit is worth ? It should be just under 1/3 of your pay (with no lump sum) and it's taxable.

What happens to the 2015 bit if you go at 50 ? i.e. what is it worth and when can you get it ?


.

If i complete 30 years pensionable service then the bit I have in the 1987 scheme gets enhanced to make up for the double accrual I have missed out on as a result of being forced into the 2015 scheme so at 30 years it will be worth approx 24/60ths of my final salary.

I will then have just over 12 years in the 2015 scheme - If I go at 30 years service (50 years old) this will be accessible from 55 years old but will be actuarily reduced from state pension age.

If I stay on until 55 then I can access both pensions then and the 2015 portion will be actuarily reduced from 60 years old.

Of course if I stay over 50 then every day the commutation factor on my 1987 scheme will be reduced.

Basically they are making it financially impossible for me to retire when i should have but then due to the commutation factor issue they are penalising me for retiring later! Shafted all ends up!

I could give figures but it would just start the usual pension arguments. I understand the need for pension reform and I would have quite happily taken my hit, say serving an extra couple of years to get what I signed up for. The reality is that even if I serve an extra 10 years I will get a lot less than I signed up for.

I am mainly shafted because I joined young, older people who started on the same day as me have fully protected pensions. Thats why I am involved in the legal challenge.

[vonhosen]

What the Govt appear to have overlooked & where they are no doubt cursing/kicking themselves, is that your 1987 pension pay out is still based on your final retirement salary & not what your salary was when the 1987 scheme finished. So you may have been a PC when the 1987 scheme finished & all your contributions were based on a PC's wage, but you may be a Supt when you eventually retire. Your 1987 pension is then based on the Supt final salary.

[ED209]

vonhosen said:

What the Govt appear to have overlooked & where they are no doubt cursing/kicking themselves, is that your 1987 pension pay out is still based on your final retirement salary & not what your salary was when the 1987 scheme finished. So you may have been a PC when the 1987 scheme finished & all your contributions were based on a PC's wage, but you may be a Supt when you eventually retire. Your 1987 pension is then based on the Supt final salary.

That won't be happening, I was a Sgt for 14 of my 18 years in the 1987 scheme and thats probably where I personally will stay.

[Red 4]

ED209 said:

That won't be happening, I was a Sgt for 14 of my 18 years in the 1987 scheme and thats probably where I personally will stay.[

Thanks for the explanation re; your pension.

I've just worked that out in my head - basically, if I've done this right, if you go at 50 as a Sergeant you'll get roughly the same pension that a Constable would have had after 30 years following maximum commutation on the 87 scheme - that's provided you don't commute anything and therefore get zero lump sum !.

That's quite a hit.

If you commute the maximum then your monthly pension will obviously be worth much less.

I'd imagine the 2015 bit won't be worth much at age 55 if it's actuarily reduced from SPA.

Sorry to hear that and I agree - it does appear you've suffered a huge loss due to the changes.

Edited by Red 4 on Tuesday 27th February 11:38

[sidicks]

ED209 said:

If i complete 30 years pensionable service then the bit I have in the 1987 scheme gets enhanced to make up for the double accrual I have missed out on as a result of being forced into the 2015 scheme so at 30 years it will be worth approx 24/60ths of my final salary.

I will then have just over 12 years in the 2015 scheme - If I go at 30 years service (50 years old) this will be accessible from 55 years old but will be actuarily reduced from state pension age.

If I stay on until 55 then I can access both pensions then and the 2015 portion will be actuarily reduced from 60 years old.

Of course if I stay over 50 then every day the commutation factor on my 1987 scheme will be reduced.

Basically they are making it financially impossible for me to retire when i should have but then due to the commutation factor issue they are penalising me for retiring later! Shafted all ends up!

I could give figures but it would just start the usual pension arguments. I understand the need for pension reform and I would have quite happily taken my hit, say serving an extra couple of years to get what I signed up for. The reality is that even if I serve an extra 10 years I will get a lot less than I signed up for.

I am mainly shafted because I joined young, older people who started on the same day as me have fully protected pensions. Thats why I am involved in the legal challenge.

Can you explain this?

By retiring later you will receive a higher pension for two reasons, a) you will have accrued more service and b) it is expected to be paid for a shorter period.
If you are seeking to take a lump sum in lieu of some of the pension then the commutation factor will necessarily be lower, due to the shorter expected lifetime. However as this is applied to a higher pension, the net result should be positive.

[Red 4]

sidicks said:

Can you explain this?

By retiring later you will receive a higher pension for two reasons, a) you will have accrued more service and b) it is expected to be paid for a shorter period.
If you are seeking to take a lump sum in lieu of some of the pension then the commutation factor will necessarily be lower, due to the shorter expected lifetime. However as this is applied to a higher pension, the net result should be positive.

I think ED means he'll get a smaller lump sum if he retires later due to the decrease in commutation factors related to age.

He can only access the 87 scheme at age 50 and has to wait for payment from the '15 scheme.

[sidicks]

Red 4 said:

I think ED means he'll get a smaller lump sum if he retires later due to the decrease in commutation factors related to age.

My point was that if a lower commutation factor was applied to a higher pension then the lump sum could still be at or above the previous expected level.

[Red 4]

sidicks said:

Red 4 said:

I think ED means he'll get a smaller lump sum if he retires later due to the decrease in commutation factors related to age.

My point was that if a lower commutation factor was applied to a higher pension then the lump sum could still be at or above the previous expected level.

Yes, I know that - but the pension accessible from age 50 after 30 years service (the 87 scheme) is not increasing - it's arguably decreasing because the commutation factors are reducing year on year.

ED would probably get more out of the pension in the long term if he didn't commute anything (or not much).

[vonhosen]

ED209 said:

vonhosen said:

What the Govt appear to have overlooked & where they are no doubt cursing/kicking themselves, is that your 1987 pension pay out is still based on your final retirement salary & not what your salary was when the 1987 scheme finished. So you may have been a PC when the 1987 scheme finished & all your contributions were based on a PC's wage, but you may be a Supt when you eventually retire. Your 1987 pension is then based on the Supt final salary.

That won't be happening, I was a Sgt for 14 of my 18 years in the 1987 scheme and thats probably where I personally will stay.

My understanding is that they've cocked up & haven't changed things for the 1987 scheme.
ie It's a final salary scheme & they haven't changed the fact that under the 1987 scheme your pension entitlement will be based on the applicable pensionable pay at retirement & not your pensionable pay at the time the scheme was suspended.

[ED209]

Red 4 said:

ED209 said:

That won't be happening, I was a Sgt for 14 of my 18 years in the 1987 scheme and thats probably where I personally will stay.[

Thanks for the explanation re; your pension.

I've just worked that out in my head - basically, if I've done this right, if you go at 50 as a Sergeant you'll get roughly the same pension that a Constable would have had after 30 years following maximum commutation on the 87 scheme - that's provided you don't commute anything and therefore get zero lump sum !.

That's quite a hit.

If you commute the maximum then your monthly pension will obviously be worth much less.

I'd imagine the 2015 bit won't be worth much at age 55 if it's actuarily reduced from SPA.

Sorry to hear that and I agree - it does appear you've suffered a huge loss due to the changes.

Edited by Red 4 on Tuesday 27th February 11:38

Not even that much, its about £17k a year with no lump sum.

I estimate my losses at £300k ish if i lead a longish life.

[CharlesdeGaulle]

vonhosen said:

My understanding is that they've cocked up & haven't changed things for the 1987 scheme.
ie It's a final salary scheme & they haven't changed the fact that under the 1987 scheme your pension entitlement will be based on the applicable pensionable pay at retirement & not your pensionable pay at the time the scheme was suspended.

Surely that's a consequence of protected grandfather rights, not an oversight?

[sidicks]

CharlesdeGaulle said:

Surely that's a consequence of protected grandfather rights, not an oversight?

Definitely not an oversight - at worst it would revalue the salary from the point when accrual finished up until the date of retirement. Similar to other deferred members.

[Red 4]

ED209 said:

Not even that much, its about £17k a year with no lump sum.

I estimate my losses at £300k ish if i lead a longish life.

Yep, spot on - I got my calculator out following my earlier post (just out of interest).

£300k loss sounds right too.

Another factor with the new scheme is how many will manage to get to 60 - Winsor wanted annual fitness tests based on the PSNI standard. It hasn't happened - yet. But give it time ...

[vonhosen]

CharlesdeGaulle said:

vonhosen said:

My understanding is that they've cocked up & haven't changed things for the 1987 scheme.
ie It's a final salary scheme & they haven't changed the fact that under the 1987 scheme your pension entitlement will be based on the applicable pensionable pay at retirement & not your pensionable pay at the time the scheme was suspended.

Surely that's a consequence of protected grandfather rights, not an oversight?

With their propensity to kick in the *****, I'd have expected them at best to allow for inflationary rises to what was your pensionable pay within the scheme when the scheme closed & not allow the pensionable pay that benefits under the 1987 scheme will be worked out from to potentially rise significantly with progress through the ranks.

[Red 4]

The other thing to remember with the police pension/ those who are planning to retire/ have recently retired is check out your State Pension entitlement.

If you were a member of a public sector pension scheme you'll have been contracted out and there's a good chance you won't have the required number of years (35 years now) contributions for a full State Pension.

Plus - Deductions are made from the number of years contributions you may think you've paid because you are/ were a member of a public sector pension scheme.

Von - I know you've recently retired. Check it out if you haven't already.

Perhaps sidicks can explain in more detail. It is complicated