Police pension decreases with time served?

FatherAbraham

BBC News - Chief constable on £170k to retire for just one day to protect pension

https://www.bbc.com/news/articles/c9977mlvl7mo

"The move is legitimate under the national Retire and Rehire Scheme and will prevent her pension pot reducing. It matures after 30 years' service but reduces for each consecutive year of additional service. By enforcing a break, it will be frozen at its maximum amount."

Imagine getting a full pension after just thirty years! 

Imagine setting up a pension scheme where the benefit decreases the kinder one serves! 

Imagine his much money one would need in a pot to fund such a pension oneself!

GunJack

The natural consequence of messing with pension schemes, I know many civil servants who did similar to protect Classic pension before McLeod was a thing

kipsterno1

How much are pension deductions for police officers?

Dazed_and_C0nfused

kipsterno1 said:

How much are pension deductions for police officers?

Relatively high for a public sector DB scheme.

https://www.gov.uk/government/publications/benefits-of-the-police-pension-scheme-2015/the-benefits-of-your-police-pension-scheme-accessible-version

hyubh

FatherAbraham said:

BBC News - Chief constable on £170k to retire for just one day to protect pension

https://www.bbc.com/news/articles/c9977mlvl7mo

"The move is legitimate under the national Retire and Rehire Scheme and will prevent her pension pot reducing. It matures after 30 years' service but reduces for each consecutive year of additional service. By enforcing a break, it will be frozen at its maximum amount."

Imagine getting a full pension after just thirty years!

That was how PPS 1987 was structured - 30 years maximum accrual, with the accrual rate double for the last decade to achieve a 2/3 final salary pension. Serving officers also had compulsory retirement ages that typically matched.

Imagine setting up a pension scheme where the benefit decreases the kinder one serves!

I may be wrong, but I don't think what is reported is correct. With PPS 1987, serve more than 30 years, and while a final salary link would remain, there would be no more years reckonable for pension purposes (i.e. you couldn't earn a pension more than 2/3 final salary).

However, as someone still serving, this chief constable since 2022 is an active member of the 2015 CARE scheme, which has no maximum accrual. Maybe the aim is to fix her final salary for her PPS 1987 pension to what it is now? Or perhaps the concern is something technical around commutation factors? The simple 'reduction' language being used in the press is at best misleading either way.

Imagine his much money one would need in a pot to fund such a pension oneself!

Imagine not ensuring retired police officers are comfortably remunerated, relative to their pay while working!

They also pay relatively high contribution rates, and always have done. When introduced, the employee contribution rate for PPS 1987 was 11%, and the current scheme's rate is between 12.44% and 13.78% depending on seniority. Now, would paying 13% into even the more generous corporate DC schemes around give you an equivalent annuity? No. However we're not talking peanuts here. 

ali_bear

Structured around short careers because police are supposed to be physically fit and mentally agile with only a limited number of more senior positions to be promoted into. 

Like many areas of public service it is probably well overdue for reform. Perhaps a new late-stage senior/leadership career ladder with different terms and pension arrangement. 

hyubh

ali_bear said:

Structured around short careers because police are supposed to be physically fit and mentally agile with only a limited number of more senior positions to be promoted into.

The pension scheme's 30 years structure finished for new joiners in 2006.

Like many areas of public service it is probably well overdue for reform. Perhaps a new late-stage senior/leadership career ladder with different terms and pension arrangement. 

Old style 'top hat' sections, but for public sector? Hmm...

ali_bear

Every day a school day. 

Knew I shouldn't have engaged in speculation .. 

FatherAbraham

hyubh said:

Imagine his much money one would need in a pot to fund such a pension oneself!

Imagine not ensuring retired police officers are comfortably remunerated, relative to their pay while working!

They also pay relatively high contribution rates, and always have done. When introduced, the employee contribution rate for PPS 1987 was 11%, and the current scheme's rate is between 12.44% and 13.78% depending on seniority. Now, would paying 13% into even the more generous corporate DC schemes around give you an equivalent annuity? No. However we're not talking peanuts here. 

A two-thirds-of-salary pension is obscenely high, compared to what private sector workers end up with. 

Do you really think that 13% is a high personal contribution? 

I work in the private sector, and realised about thirteen years ago that I needed to stay paying 25% of my salary into my defined-contribution occupational pension, so I started doing that.

Eight years ago I realised that I needed to increase it to 50%, so I tightened my belt, and started doing that.

I'm currently paying 60% to try to ensure that I get a decent pension.

I have a quite visceral understanding of how obscenely over-rewarded public-sector employees - even the saintly police - are, because I have experience first-hand how much I have had to sacrifice to get anywhere near the levels of what's required for a moderate pension.

Bobziz

FatherAbraham said:

hyubh said:

Imagine his much money one would need in a pot to fund such a pension oneself!

Imagine not ensuring retired police officers are comfortably remunerated, relative to their pay while working!

They also pay relatively high contribution rates, and always have done. When introduced, the employee contribution rate for PPS 1987 was 11%, and the current scheme's rate is between 12.44% and 13.78% depending on seniority. Now, would paying 13% into even the more generous corporate DC schemes around give you an equivalent annuity? No. However we're not talking peanuts here. 

A two-thirds-of-salary pension is obscenely high, compared to what private sector workers end up with. 

Do you really think that 13% is a high personal contribution? 

I work in the private sector, and realised about thirteen years ago that I needed to stay paying 25% of my salary into my defined-contribution occupational pension, so I started doing that.

Eight years ago I realised that I needed to increase it to 50%, so I tightened my belt, and started doing that.

I'm currently paying 60% to try to ensure that I get a decent pension.

I have a quite visceral understanding of how obscenely over-rewarded public-sector employees - even the saintly police - are, because I have experience first-hand how much I have had to sacrifice to get anywhere near the levels of what's required for a moderate pension.

If only public sector jobs were open to everyone to apply for rather than just a small secretly selected minority. Just think how nice it would be for everyone to have the opportunity to be obscenely over-rewarded.

Where I live you can't move for retired nurses and teaching assistants driving around in their Ferrari's.

hyubh

FatherAbraham said:

hyubh said:

Imagine his much money one would need in a pot to fund such a pension oneself!

Imagine not ensuring retired police officers are comfortably remunerated, relative to their pay while working!

They also pay relatively high contribution rates, and always have done. When introduced, the employee contribution rate for PPS 1987 was 11%, and the current scheme's rate is between 12.44% and 13.78% depending on seniority. Now, would paying 13% into even the more generous corporate DC schemes around give you an equivalent annuity? No. However we're not talking peanuts here. 

A two-thirds-of-salary pension is obscenely high, compared to what private sector workers end up with. 

As I said, the 1987 scheme (with its pension of 2/3 final pay after 30 years) closed to new members in 2006. Was its successor and then the CARE scheme still very good? For sure, but there are obvious reasons for retired police officers to have decent pensions by default.

Do you really think that 13% is a high personal contribution?

13% (or even the historic 11%) is indeed a high voluntary employee contribution rare, let alone a high compulsory one. In both public and private sectors alike, most employees don't contribute more than they have to - it's just, in the private sector, what they have to contribute is systematically lower, and if the police is the comparator, much much lower. For sure, employer rates are widely different too, but that doesn't negate the fact 13% is a high employee rate for the workforce as a whole.

I work in the private sector, and realised about thirteen years ago that I needed to stay paying 25% of my salary into my defined-contribution occupational pension, so I started doing that. Eight years ago I realised that I needed to increase it to 50%, so I tightened my belt, and started doing that. I'm currently paying 60% to try to ensure that I get a decent pension.

Ahem, what makes you assume I don't work in the private sector, and have also long personally contributed way more than the PPS compulsory rate...?

I have a quite visceral understanding of how obscenely over-rewarded public-sector employees - even the saintly police - are

'The saintly police'? If anything I've suggested the opposite. The saint (as an otherworldly figure) would have no need of a decent pension, in fact they would likely chose poverty...

because I have experience first-hand how much I have had to sacrifice to get anywhere near the levels of what's required for a moderate pension.

You've disdained entering the public sector for whatever reason, and on the pension side have made up for the fact with high personal contributions. Great! What's there to be resentful for?