Police Pension advice

atush

Although I call it retiring. I will not retire from work, just the Police at 52, it's a hard demanding job that clearly does not suit most people in their late 50s early 60s.

I understand as pointed out that this is the new 'norm' hence why I am on here asking my question! I am not sure if I should stay in the pension or not? and what differences it will make on my current pot and the availability of it and at what ages if I do leave the new pension?

I am trying to point out to you, that you need to ask the HR dept the question about if you can retire in 2 lots.

And as you intend to work in another field, this would help you if you decide to wait and take your whole pension unreduced at age 60. You certainly don't want to reduce your whole pension 40% to take it when youa re working elsewhere.

And there is NOTHING you can do with the small amt you will put into the new Police scheme that will even approach (much less better) your new DB pension. It would take 30% of your salary just to equal the income and death benefits.

We know you are upset, just like we were upset with 0% increase in salary for nearly 5 years during the recession. Like we were when the OH old company closed their final salary months before he joined.

We value the job you do, but you will get no sympathy here if you opt out of a still great scheme.

So, go to HR and ask the questions about taking the two pensions at different times (ie the old one at 52, the new one at 60) and ask the actuarial reduction rate to take the pension early. Not sure it is worth paying an IFA anything, as you can find out the answers either by asking, or reading your scheme booklet.

Then get back to us.

atush

It looks like from post 19, that you will not be able to retire in 2 lots.

But it is also clear, that you should not (if you intend to work post 52) take your pension before age 60.

You would be reducing a pension of nearly 27K pa with one of 16.6K. Just not worth it.

If you think your salary at 52 in another job will not be enough, you can save outside your pension to enable you to work and live on savings until you reach 60.

AS it would cost you approx half a million pounds to buy an annuity of 27K per annum, as this is a level pension. If you wanted an indexed pension like your police one, it would cost you over 800K.

To replace just the part you will lose by taking your pension at 50, you'd need a pot of over 300K to provide in excess of 10K perannum indexed pension. I cannot see you building a pot of that size between now and 50?

jem16

My understanding of all the public sector pensions once it's changed over to career average from 201,5 is that you have to take the pension in one go - ie you cannot take the pre 2015 at age 60/65 but not take the post 2015 until state retirement age which will be the new retirement age.

Basically retiring at the old scheme age of 60/65 will see an actuarial reduction in the post 2015 part.

hyubh

dodgiedave wrote: »

I will not be opting out of the 1987 scheme only the new one? The 1987 scheme will be ending.

You will have a single pension record with continuous service covering both the 1987 and 2005 versions of the PPS. Opt out on 31 March 2015, and you will have opted out under the 1987 scheme rules; opt out on 1 April 2015, and you will have opted out under the 2015 scheme rules.

This does contrast with how police pension reform was done last time around, when the 1987 scheme was closed to new joiners but kept open to existing ones. However, it matches how police support staff were treated when their pension scheme was last changed in 2008 and will change again in 2014 (outside of London, police support staff are eligible for the LGPS).

hyubh

jem16 wrote: »

Basically retiring at the old scheme age of 60/65 will see an actuarial reduction in the post 2015 part.

Um, this is the police scheme we're talking about... Only in the 2015 scheme will the normal retirement age for serving officers rise to the heady heights of age 60. In the 1987 scheme, the idea was to join when (say) 20, have thirty years service, then retire on two thirds your final salary age 50.

jem16

hyubh wrote: »

Um, this is the police scheme we're talking about... Only in the 2015 scheme will the normal retirement age for serving officers rise to the heady heights of age 60. In the 1987 scheme, the idea was to join when (say) 20, have thirty years service, then retire on two thirds your final salary age 50.

True, although the concept is the same as far as not being able to take one bit without the other.

For police scheme replace with appropriate ages.

billchecker1

I can understand the OPs frustration and worry.

There has been NOTHING from our union on the issue. They have simply washed their hands at the situation (whilst making sure that they themselves are ok).

One thing I keep explaining to friends and family is that we currently pay 14% into our pensions.

I am paying around £450 a month into it.

Now the pension (even in its new form) is fantastic and IMHO you would be crazy to leave it, £5400 a year is a lot of money. Rises aside this is a very rough spend of £200K over a career.

This is made even worse by constant tinkering and changes by the government who think that only they and the judiciary are worth keeping final salary schemes.

There is clear risk involved to our investment.

I have been in ten years and there have been two changes already. Who is to say that there will not be even more changes over the next 25 years!?
In fact I would suggest that it is more than likely.

With that in mind I have been investing on the side to complement my pension.

I simply don't trust the government anymore.

hyubh

billchecker1 wrote: »

There has been NOTHING from our union on the issue. They have simply washed their hands at the situation (whilst making sure that they themselves are ok).

In what way have they made sure they themselves are OK?

One thing I keep explaining to friends and family is that we currently pay 14% into our pensions.

... in order to get 66% of your final salary for life after only 30 years of service. The numbers just don't add up.

Now the pension (even in its new form) is fantastic and IMHO you would be crazy to leave it,

Right.

£5400 a year is a lot of money.

For sure. Although, if you are paying a contribution rate of 14%, you must be an officer in the 1987 scheme earning £60,000 or more.

Rises aside this is a very rough spend of £200K over a career.

So what? If you live to a reasonable age, it will be repaid several times over in pension payments, backed by a blank cheque signed by central government on behalf of the general taxpayer.

This is made even worse by constant tinkering and changes by the government

Hardly - the 1987 scheme is very retro in its assumptions, and has seen far less changes than (say) the LGPS since the late 80s. Mind you, 'constant tinkering' is actually a good thing - in the private sector, old defined benefit schemes aren't tinkered with half as much, and instead just get closed to everyone in time. In other words: it's the 'tinkering' that means you will still have a decent pension scheme in 2015.

who think that only they and the judiciary are worth keeping final salary schemes.

Er, MPs' pension scheme is moving from a final salary to career average basis along with other public sector schemes (http://www.parliament.uk/briefing-papers/SN06283).

There is clear risk involved to our investment.

Still fed up about the loss of the double accural, eh? The 'risk' is in fact tiny - the police pension schemes are 'pay as you go' ones in which there are zero investment risks on either the employee or employer side, due to the fact central government will by law pick up any shortfall.

I have been in ten years and there have been two changes already.

Boo hoo - count yourself lucky you could stay in the 1987 scheme until 2005. Police support staff didn't get the choice of staying in the 1997 LGPS scheme in 2008, for example.

Who is to say that there will not be even more changes over the next 25 years!?

I expect there will be, yes.

I simply don't trust the government anymore.

Yes, it must surely be involved in a grand conspiracy against public sector workers earning in excess of £60K a year.

billchecker1

Wow so much bitterness. Not sure why.

In what way have they made sure they themselves are OK?

The new scheme does not affect those with less than 10 years to go. They are allowed to retire at 30 years service in exactly the same way as everyone was until now.

Now clearly there is a good argument with time served, expectations and contributions (however we all paid 11.5% until recently), however most fed officers are well into that bracket. I wonder how much fight was left in their bellies after they knew that they were ok.

... in order to get 66% of your final salary for life after only 30 years
of service. The numbers just don't add up.

That was what we signed up to. Simple.

If an investment product offered 5% fixed interest and you are told actually the bank cant really afford it anymore would you be annoyed?! Or would you put it down to the common good. Have the bank as RBS to further emphasize the analogy.

For sure. Although, if you are paying a contribution rate of 14%, you must be an officer in the 1987 scheme earning £60,000 or more.

NO! I WISH - I am a humble PC on 33000 a year. Please tell me that they have been taking too much out of my salary?!

So what? If you live to a reasonable age, it will be repaid several times over in pension payments, backed by a blank cheque signed by central government on behalf of the general taxpayer.

You do realise that we pay tax too? It goes out every month. We are tax payers too.

I go back to the promise that was laid out at the time of joining. This is backed up by the law. Section 2 of the Police Pensions act states explicitly that any future changes must not be to the detriment of current members.

It couldn't be any clearer. Save money yes, however this should be for new recruits, not those who have already joined up and paid in for a substantial amount of time.

Hardly - the 1987 scheme is very retro in its assumptions, and has seen far less changes than (say) the LGPS since the late 80s. Mind you, 'constant tinkering' is actually a good thing - in the private sector, old defined benefit schemes aren't tinkered with half as much, and instead just get closed to everyone in time. In other words: it's the 'tinkering' that means you will still have a decent pension scheme in 2015.

You do know they dramatically changed the scheme in 2006? This was not as good as the old scheme, but better than the newere scheme. At that time they decided that the law was ok and for the 1987 officers to keep within the current scheme.

Like I say two changes In my ten years is tinkering. It is breaking a promise.

Er, MPs' pension scheme is moving from a final salary to career average basis along with other public sector schemes (http://www.parliament.uk/briefing-papers/SN06283).

Forgive me, I didn't know this. Of course the contribution rate is less, they are allowed second jobs and are allowed to claim a lot in expenses (still!). Anyway I concede this point.

Still fed up about the loss of the double accural, eh? The 'risk' is in fact tiny - the police pension schemes are 'pay as you go' ones in which there are zero investment risks on either the employee or employer side, due to the fact central government will by law pick up any shortfall.

See here we have ignorance about the changes going on. A fitness test is being introduced along with knowledge tests.

Along with increasing privatisation I have no doubt in my mind that people wont make the full working age. Meaning the government will have to pay even less.
There are so many riles in the police which require thinking and not simply brawn. The governemtn doesn't care and simply wants profit to be made. The service is changing dramatically. It is a real shame.

Boo hoo - count yourself lucky you could stay in the 1987 scheme until 2005. Police support staff didn't get the choice of staying in the 1997 LGPS scheme in 2008, for example.

My wife is in the LGPS. It is a shame. But that doesn't make it right.

Who is to say that there will not be even more changes over the next 25 years!? I expect there will be, yes.


Quote:
I simply don't trust the government anymore.
Yes, it must surely be involved in a grand conspiracy against public sector workers earning in excess of £60K a year.

Please see above.

The public have been completely hoodwinked by the governments spin. How many negeatve police reports have you seen in the paper recently? Hillsborough?! Jimmy Saville. I was 8 when that happened yet the public think we are an overpaid lazy workforce.

That is so far removed from the truth it is unbelievable.

We have all joined into a race to the bottom and the government loves it.

None of my friends in the public sector pay anything like I do into a pension yet they are jealous of it.

The pension was one of the benefits I saw when I left my higher paying job to join the police. That has been stolen from me and no one actually cares, the government, the public, the union or our own bosses. This from a body who cant strike or even talk out of term about their own employers.

jem16

billchecker1 wrote: »

The new scheme does not affect those with less than 10 years to go. They are allowed to retire at 30 years service in exactly the same way as everyone was until now.

Now clearly there is a good argument with time served, expectations and contributions (however we all paid 11.5% until recently), however most fed officers are well into that bracket. I wonder how much fight was left in their bellies after they knew that they were ok.

Not all union reps will be within 10 years of retirement. My union has a mixture of all ages and guess who are the ones fighting against the changes most? It's the older ones who are within 10 years. Most of my younger teaching colleagues don't want the changes but don't want to strike either.

NO! I WISH - I am a humble PC on 33000 a year. Please tell me that they have been taking too much out of my salary?!

Tier 2 says 13.5% for 2013/14. Tier 3 would be 14%.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/170611/increase-police-contrib.pdf