May 2011

A Federation newsletter detailing the current activity is now available from your local representative or by following the link:

March 2011

Lord Hutton of Furness has today published his final report setting out his recommendations to the Government on public service pension arrangements that are sustainable and affordable in the long term and fair to both the public service workforce and the taxpayer, while protecting accrued rights.The final report is available today via the following link:

Please press F5 to refresh the page if you find it is not available.

Responding to the Hutton Review of pensions published today, Simon Reed, Vice-Chairman of the Police Federation of England and Wales, says:

"This is a further kick in the teeth for police officers. In a matter of weeks we have been told we'll face a two-year pay freeze, the Winsor Report which may see officers losing thousands of pounds per annum and now this.

"Does this government really want a Dad's Army of policing? Whilst experience counts, the dangers for the public of sending in 60-year old police officers to deal with public order situations and Friday night drunken brawls seems obvious.

"We have yet to meet with the Home Office to discuss the specifics of what officers will be expected to pay, but let's not forget we already had changes to the police pension scheme in 2006. To that end, officers are already expected to work longer and receive less."

October 2010

On 7 October 2010 the Independent Public Service Pensions Commission led by Lord Hutton has published its interim report. This report can be found at:

We are informed by the Home Office that the Government will give careful consideration to Lord Hutton’s recommendations before responding to the report. However, on initial reading of the 176-page report, the emerging theme is that “if the Government wishes to make short-term savings, then raising contribution rates would be the most effective way”, as opposed to reducing the level of benefits. The Commission also recommends that, in doing so the Government “should have regard to protecting the low paid and should not introduce contribution rates for the Armed Forces at this time.”

Aside from this, the recommendations are not scheme-specific and there is no suggestion as to how far contribution rates should rise. This means that there is no definite indication as to the implications, if any, for police pensions. In its report, the Commission concludes that the cost of funding public sector schemes has risen, within an increasing burden being shouldered by the tax-payer. According to the Commission, in many public sector pension schemes, at the time when they were initially established employees paid approximately half of the cost of funding those schemes, while today they pay somewhere between a fifth and a third of the cost of accrual. Although the Commission does not make this explicit, members of police pension schemes are at the top end of this range. The report also notes the relatively high contribution rate of police officers. While drawing no conclusions from this, it is also worth noting that the report contains far more analysis of the Local Government and NHS Pension Schemes.

The Government will now consider Lord Hutton’s recommendations before deciding on whether or not to accept this recommendation. Our understanding is that it is then for each scheme funder to consider the how they will take these recommendations forward, if accepted by Government. In the case of policing this would have to go through the Police Negotiating Board. However, you will also be aware that the Home Secretary has appointed Tom Winsor to undertake an independent review of police pay and conditions and it is possible that the recommendations of Lord Hutton may be explored within that separate review. We also still await the outcome of the Government Actuaries Department valuation of the Police Pension Scheme that is to take effect from April 2011.   Lord Hutton will also produce a final report in time for the Budget in 2011, which will look at longer-term structural reform of public sector pensions. This may include whether or not it is appropriate for schemes to move from a final salary basis to that of a career average. It will also look at whether there needs to be changes to retirement ages within each scheme.I will keep you informed of further developments.

The Staff Side response to the review of Public Sector Pensions by Lord Hutton is now available on the PFEW website.