The New Police Pension Scheme
The New Police Pension Scheme came into force in April 2006. All new joiners, re¬entrants and transferees from other police bodies like British Transport Police/Ministry of Defence Police joining after this date will have no option but to join this scheme (note: transferees who move between Home Department forces under old Reg A16 will remain in the current scheme, also people on an approved career breaks who return to duty).
Basic principles of the NPPS
- 35 years scheme — officers will have to serve 35 years to be entitled to a full pension.
- The maximum pension is 50% of final salary
- The tax free lump sum is four times the pension
- Minimum age at which the pension can be taken is age 55.
- The deferred pension is payable at 65
- The pension grows by single accrual – 1/70th of the final salary for each year of service (with a maximum of 35/7Oths after 35 years).
- Pension contributions are 9 ½% of pensionable pay (basic salary, London Weighting, CRTP and temporary promotion).
- There are two tier ill-health benefits
- There are life long adult survivor benefits (not withdrawn on remarriage)
- There are children's pensions
- There is no AVC scheme, however can buy added years (and also pay into a private pension)
- Full pay/pension for the first thirteen weeks after death is not payable
- Death in Service Grant is three times salary
Contributions are 9 ½% of pensionable pay, however, if an officer is permanently disabled on joining, he/she can be excluded from the ill health benefits but contributions reduced to 6%.
Final pensionable pay is best in the last ten years (actually best of the last three years — or the average salary of any three consecutive years in the preceding seven years if better)
Can opt out and rejoin and then opt out again, but can only rejoin again after a break in service.
Pensionable service is the service during which pension contributions are made, with part time service on a pro-rata basis (e.g. five years service at three days a week buys three years pension).
Each complete year of service 'buys' 1/70 of final pensionable pay as the pension (and parts of the year are defined as the number of days out of 365 and expressed as a decimal) and each complete year of service 'buys' 4/70 of final pensionable pay as lump sum.
There is no commutation; however an officer can opt to give up part of the lump sum for an increased pension.
Therefore at age 55, if an officer has 35 or more years pensionable service, then he/she is entitled to 3 5/70 (i.e. half) his final pensionable pay and 4 times the pension as a lump sum.