May 2011
The revised commutation factors for the Police Pension Scheme (PPS) 1987, have just been issued by the Government Actuary’s Department (GAD). The new factors will apply to any member who retires on or after 20 April 2011. The factors for all ages have been increased.
However, please note that, as some of the revised commutation factors are now higher than 20:1, there may be tax implications for some members. This is because the value of the commuted lump sum may now exceed the maximum permitted by HMRC, which is currently 25% of the total value of benefits vested. If the commuted lump sum does exceed the HMRC limit of 25%, the amount of the lump sum in excess of that limit will be deemed an unauthorised payment and subject to a 40% tax charge.
I would recommend members seek independent financial advice on their own particular circumstances. Disappointingly we were only informed of these changes by the Home Office yesterday.
I understand that they will shortly promulgate a Home Office Circular on the revised commutation factors, which I will ensure is circulated.
To view the new commutation factors please visit the national website www.polfed.org
The Chairman’s and General Secretary’s office are taking every opportunity when meeting with parliamentarians, media and other stakeholders to discuss in detail our concerns about government plans for police pensions as well as the threat of detrimental change to police officer terms and conditions of service.
This week (14th January) Police Review is highlighting the ‘Protect the Police Pension’ campaign.
We have been speaking with Police Review about this campaign which aims to highlight the concerns police officers have about possible future changes to police pensions.
Please find attached a PDF of a letter that will appear in Police Review that can be printed off by members, completed and sent off to their local MP.
We support this campaign and in Police Review there will be a guest editorial by Chairman, Paul McKeever, in relation to this.
Download Police Pensions Letter (Adobe PDF)
