1. Police Pensions User Group 13th February 2015

2. Agenda 11.00 Introduction 11.10 2015 Scheme Update
Disclosure regulations
Scheme Registration
Transfer dates for officers
Assistance with communication
Pensions saving statements
12:00
Lunch
12:30
Pension Boards
Terms of Reference
Education
The Pensions Regulators toolkit
Board membership
Next steps
13.30
Any other business
14.00
Close

3. Police Pension Scheme 2015

4. Police Pension Scheme 2015 National Scheme (Administered locally)
Comes into force 1st April 2015
Protections available
Regulations expected w/c 23 February

5. What’s New? Career Average Revalued Earnings (CARE) pension
Registered with HMRC
Contracted out of S2P
Statutory status
- Pension Benefits are protected and underpinned by Government -

6. What does it Cost? Police Authority contributes 21.3%
Contributions are Tiered
Tier 1 – Pensionable pay under £27,000
Tier 2 – Pensionable pay more than £27,000 but less than £60,000
Tier 3 – Pensionable pay of £60,000 and over
2.5% reduction for officers not entitled to ill health benefits
Police Authority contributes 21.3%

7. Pensionable Pay   Determined Under Part 4 of the Police Act 2003
Included
Basic Salary
Temporary Promotion
London Weighting
Not Included
Overtime
Housing Allowance
Rent Allowance  

8. Scheme Benefits “55.3ths Scheme” No service cap
Pension for life with option to commute
Pension
1/55.3 x Pensionable Pay
Option to Commute
Up to ¼ of Capitalised benefits at 12:1
Part Timers
Pension calculated using actual pensionable pay

9. CARE Pension
Individual pension pot built up for each year of membership
Pay/accrual rate
Pay = Pensionable pay earned during year
Accrual Rate = 1/55.3th
Individual pot revalued each year
in line with CPI % while active
CPI only while deferred
Individual pots added together and paid as one pension

10. CARE Pension
PC Sumner – Accrued pension each year after the effects of 5 years’ increases
Pensionable Pay:
Pension
Year 1: £34,000/55.3 = £ £ £ £ £ £8.08 = £654.24
Year 2: £34,340/55.3 = £ £ £ £ £8.06 = £652.62
Year 3: ,000/55.3 = £ £ £ £8.34 = £675.70
Year 4: £37,254/55.3 = £ £ £8.53 = £690.62
Year 5: £37,254/55.3 = £ £8.42 = £682.09
£3,355.27
Member has the option to convert pension to lump sum

11. When can they get their hands on it?
Refund of contributions with less than 2 years service (through payroll if < 3 months)
Otherwise
Normal Pension Age of 60
Reduced pension can be paid from age 55 Or
Deferred Benefit payable from State Pension Age
Earlier but with reduction

12. Ill Health Pension Benefits
Two Tier System
Selected Medical Practitioner
Standard Ill Health Pension
Unable to carry out ‘Ordinary’ duties
Enhanced Top-Up Ill Health Pension
As above but can not undertake ‘Regular Employment’
Not less than 30 hpw over 52 weeks
Assumed Pay

13. Ill Health Pension Benefits
Standard Tier
Calculated in exactly the same as an ordinary pension
Enhanced Tier
Less than 5 years service:
Lesser of:
Pension multiplied by 3; or
½ prospective service
More than 5 years service:
addition of ½ prospective service

14. Ill Health Example
Expect Police Authority to have to pay cash into pension account
PC Summers
5 years service (age 36)
Pensionable Pay = £37,254
Standard Tier:
Pension: = £3,355.27
Enhanced Benefits:
½ Prospective Service to age = 12 years
Pension = (£37,254 / 55.3) x = £8,084.05
Total ill health pension payable = £3, £8, = £11,439.32

15. Death Benefits Nominated Cohabiting Partners
Death Grant payable of 3 times pay
Irrespective of length of service
Death Grant Nomination Form
Adult Survivor Benefits
Spouse
Civil Partner
Nominated Cohabiting Partners
Children’s Benefits
Nominated Cohabiting Partners
Must have completed a joint declaration
Can be opposite / same sex couples
Financial dependence / inter-dependence
Free to Marry / enter into Civil Partnership
Period of 2 years cohabiting required (albeit Discretionary)

16. Adult Survivor Benefits
Death in Service
50% of the Officer’s Enhanced Ill Health Pension
Death of Pensioner / Deferred Beneficiary / Opt Out
50% of the Officer’s actual entitlement

17. Adult Survivor Benefits (Misc)
Remember:
Significantly younger Spouse / Civil Partner / NCP
Possible reduction to benefits
Marry / Civil Partner within 6 months of death
Possible reduction / non payment

18. Children’s Benefits Paid to:
Natural / Stepchild / Adopted Child / Dependent Child
Under age of 18
Between 18 and 23
In Full time education
For life
Disability
Benefits
25% (Up to 50% if more than one child)
Same basis as ‘Adult Survivors’ benefits

19. Transfers
Awaiting GAD Guidance

20. Increasing Benefits Up to £6,500 extra pension can be purchased
Payments made
via lump sum if within 12 months of joining
by periodical payments
Can be stopped
Whilst on leave / assumed pay
BUT …..

21. Increasing Benefits
Awaiting GAD Guidance

22. Divorce
Awaiting GAD Guidance

23. Bits I’ve missed ? All expected to follow existing processes
Early payment reductions
Ability to use lump sum to cancel actuarial reductions
Appeals
Internal Dispute Resolution Procedure
Medical Appeals
Leave of Absence
Maternity / Paternity / Adoption / Parental
Sick
Reserve duty
Jury Service
Injury Benefits
All expected to follow existing processes

24. Members with Protection
Protected officers
Older than 45 at 1st April 2012 (Both 2006 and 1987 Scheme)
Qualifying service of more than 20 years and older than 38 at 1st April 2012 (1987 Scheme)
Qualifying service of 15 years and older than 40 at 1st April 2012 (1987 Scheme)
Service attributable to pre 2015 scheme retains final salary link
Remain in current scheme until protection ends

25. What happens with pre April 2015 service?
Ordinary pension or deferred
Pre April 2015 benefits calculated with reference to final salary
May be entitled to lump sum or higher commutation rates
Ill Health Pension
No entitlement to lump sum (NPPS)
Adult survivor benefits
Pre April 2015 benefits calculated by reference to final salary

26. Next Steps Regulations Assessment of draft regulations complete
Issues raised with Home Office
Awaiting final regulations and associated guidance
Pensions Administration System
Requirements passed to Heywood
System programmed
Tested
Member Communication
Registration

27. Any Questions ?

28. Agenda 11.00 Introduction 11.10 2015 Scheme Update
Disclosure regulations
Scheme Registration
Transfer dates for officers
Assistance with communication
Pension Saving Statements
12:00
Lunch
12:30
Pension Boards
Terms of Reference
Education
The Pensions Regulators toolkit
Board membership
Next steps
13.30
Any other business
14.00
Close

29. Disclosure Regulations 13 February 2015

30. Background Effective from 6 April 2014
The Occupational and Personal Pension Scheme (Disclosure of Information) Regulations 2013
Effective from 6 April 2014
Consolidate the disclosure requirements contained in-
The Occupational Pension Schemes (Disclosure of Information) Regulations 1996
The Personal Pension Schemes (Disclosure of Information Regulations 1987

31. Key changes
Simplify the structure and language of the disclosure regime
Simplify some of the basic information that must be provided to new and prospective members
Clarify how electronic communications may be used

32. The regulations DO NOT apply to-
Pensions sharing on divorce
Pensions on Divorce etc (Provision of Information) Regulations 2000
Transfer values
The Occupational Pension Schemes (Transfer Values) Regulations 1996

33. Summary of disclosure requirements
Basic scheme information
Members, prospective members, spouse, civil partner and scheme beneficiary
Automatically for new joiners
Within 2 months of joining the scheme (and in advance where practicable)
On request, no more than once a year
Within 2 months of the request being made

34. Summary of disclosure requirements
Any material change in basic scheme information must be notified to all members and beneficiaries before, or as soon as possible after the alteration (and in any event within 3 months)
Scheme member guide should contain at the very least, all the basic scheme information
Home Office expect guide to be available this month

35. Notification to scheme members
You must send a notification to officers-
moving to the new (2015) scheme
Within 2 months (in advance where practicable)
remaining in the 1987 or 2006 scheme
Within 3 months (in advance where practicable)

36. Annual Benefit Statements
2015 Scheme
Automatic for active members of 2015
By 31 August 2016
On request for deferred and pension credit members
Within 2 months of request
1987 & 2006 scheme
On request for all membership types (within 2 months)

37. Summary of disclosure requirements
Pension Savings Statement
Members
Automatically to those who exceed the AA
By 6 October following the end of the tax year
On request
Within 3 months of the request or by 6 October, if later

38. Methods of Disclosure
Disclosure regulations were amended in 2010 and again in 2014 to enable electronic communication
Information and documents can now be disclosed-
By post
By or
By website

39. Disclosure by electronic means
Before information is provided electronically there are important steps and safeguards that must be met. These include-
Scheme members and beneficiaries being provided with the option to opt out of receiving information electronically by giving written notice
Scheme managers being satisfied that the electronic communications have been designed:
So that the person will be able to access and either store or print the information and
Taking into account the requirements of disabled people
Ensuring that members and beneficiaries who were members or beneficiaries on 1 December 2010 (where you had not provided information electronically before that date) have been sent a written notice (other than via or website), informing them that:
It is proposed to provide information electronically in the future and
Members and beneficiaries may give written notice to opt out of receiving information electronically

40. Registering the scheme with HMRC

41. How can Mouchel help?

42. Mouchel will provide a report listing all members-
How can Mouchel help?
Mouchel will provide a report listing all members-
Protected, unprotected and tapered
Can provide specimen template letters
New website - myownpension.co.uk
Section for each scheme
1987, 2006 & 2015
Includes scheme member guides

43. myownpension.co.uk

44. Penalties for non-compliance
The 2013 Disclosure Regulations make it very clear that while scheme managers may delegate the task of sending out information to third parties (e.g. a scheme administrator), they are the ones who remain ultimately responsible for ensuring compliance.
Failure to comply with the regulations can result in a fine, imposed by The Pensions Regulator and can be up to £50,000.

45. Any Questions ?

46. Agenda 11.00 Introduction 11.10 2015 Scheme Update
Disclosure regulations
Scheme Registration
Transfer dates for officers
Assistance with communication
12:00
Lunch
12:30
Pension Boards
Terms of Reference
Education
The Pensions Regulators toolkit
Board membership
Next steps
13.30
Any other business
14.00
Close

47. Police Pension Scheme Governance
Assisting the Scheme Manager with:
Compliance with legislation
Compliance with the requirements of the Pensions Regulator
Other matters as the Regulations may specify

48. Police Pension Scheme Governance
Terms of Reference
Final copy almost ready to go to Scheme Managers for approval
Certain areas need final discussion before we can complete

49. Police Pension Scheme Governance
Terms of Reference
Rolling appointment periods to ensure continuity of knowledge
Fees and expenses
Schemes covered
Indemnity Insurance

50. Police Pension Scheme Governance
Education
Knowledge & Understanding?
What is necessary on day one?
Initial training offered by ACPO, Mouchel, other parties
The Pensions Regulators toolkit
public-service-schemes.aspx#s16691

51. Police Pension Scheme Governance

52. Police Pension Scheme Governance

53. Police Pension Scheme Governance
Education
Knowledge & Understanding?
What is necessary on day one?
A Pass in the Public Service Toolkit
Enough knowledge to decide what is needed next.

54. Police Pension Scheme Governance
Board Membership
How many members and who should they be?
Open discussion
Stakeholder parties - Employers, active members, pensioners, deferred beneficiaries
Interested parties – ACPO, Federation, NARPO, Superintendents Association, others?
The able and willing