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Pension Change Project •
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1. Pension Reform -
Police Pension Scheme
The Government confirmed its commitment to consider modernising police pensions to make them more flexible and affordable, a policy supported by the Scottish Government. This in addition to the public sector pension modernisation programme and changes necessary following the introduction of a new tax regime from April 2006 formed the basis for the New Police Pension Scheme (NPPS). Proposals for the NPPS were issued for UK wide Home Office led consultation in December 2003. Following further development and agreement through the Police Negotiating Board the NPPS was introduced from 6 April 2006. As the NPPS has now been introduced further details about the scheme are on the general police pension scheme information pages of this website.
Those officers who were already members of the original Police Pension Scheme (PPS) retain the right to remain in that scheme. However during the period 1 November 2006 to 31 January 2007 members of the PPS were given the opportunity to transfer over to the NFPS on preferential terms. In order for an informed choice to be made on whether to transfer or not an options pack was provided for each officer. Details of the information provided in each pack are shown below. Although the options exercise closed on 31 January 2007 a three-month transfer opportunity, with options exercise terms, is also given to officers with PPS pension rights on rejoining the service after the start of the options exercise, providing it is their first time of re-joining after that date. Although this will apply to a very limited number of officers the information provided in the options exercise pack is retained below for those cases where options exercise terms can be offered after 31 January 2007. Some of the information below is replicated on other pages of this website which give general advice on the police pension schemes.
2. OPTIONS EXERCISE – 1 NOVEMBER 2006 – 31 JANUARY 2007
What was the options exercise?
Following the introduction of new police pension scheme regulations, there are now, in effect, two police pension schemes running in parallel – PPS and NPPS. All current members of PPS and police officers who opted out of PPS while retaining deferred benefits from it had the option of transferring to NPPS during the above period. As mentioned above the majority of officers will have made a decision on whether to transfer or not during this period but there are PPS members who will be offered similar terms if they were not included in the above exercise.
The options exercise is the three month period during which officers in PPS can, in effect, choose which pension scheme they want to belong to. They can transfer after the options exercise has ended but will do so under much less favourable terms and conditions.
Is the new scheme for me?
Pensions are complex, and there are many differences between PPS and NPPS, some of which may be important to you and others less so. Some of the main differences are:
- Contributions. You must contribute 11% of your pensionable pay to be a member of PPS and 9.5% to be a member of NPPS. The contributions to PPS are higher because for many members PPS offers more generous benefits.
- Maximum pension. In PPS the maximum (or full) pension is ? of your final salary and is payable after 30 years’ service. In NPPS, the maximum (or full) pension is ½ of your final salary and is payable after 35 years’ service. (N.B. in PPS you have to give up part of your pension to receive a lump sum, whereas in NPPS the lump sum is in addition to your pension.)
- Pension for unmarried partner after your death. In PPS a pension when you die would not be payable to a partner who is not a wife, husband or civil partner. In NPPS, as long as you and your partner have satisfactorily completed a declaration and your partnership meets the qualifying conditions, he or she would receive the same pension as a spouse or civil partner.
- Continuity of pensions for spouses, civil partners and unmarried partners. In PPS, a pension paid to your spouse or civil partner will stop if he or she remarries, forms a new civil partnership or cohabits with someone. In NPPS, pensions for spouses, civil partners or unmarried partners are payable for life, regardless of any new marriage or partnership or cohabitation.
- Ill-health pensions. In PPS there is a single tier of ill-health pension with enhancements of service for most officers. In NPPS there is a two-tier ill-health pension, depending on whether you are disabled for police work or disabled for any regular employment as well.
What do I do next?
If your force has offered you the opportuity to transfer to the NPPS under the options exercise terms they will have provided you with sufficient information on both the PPS and NPPS for you to make an informed decision. You will be given three months to decide on whether you wish to transfer or not and this period will be outlined to you by your force pension administration team.
Remember You can transfer from PPS to NPPS under special terms during the three month options exercise period applicable to you, so leaving your decision too late may mean missing out on the special terms and conditions offered until then.
Whatever you decide, you may wish to seek independent financial advice before making any binding decision to ensure you choose the best scheme for your individual circumstances.
More information
Information to help you focus on what factors are most important to you is in the companion booklet Making your choice. A straightforward comparison between the two schemes can be found in the Understanding your choice booklet. Copies of both booklets are included in the options pack sent to all eligible officers. The following links are provided to help you access particular information directly. Where a link is not active, the document is not yet finalised and will be uploaded shortly.
This page is continually updated and added to.
Forms are available in both MS Word (.doc) and Adobe (.pdf) format.
Options Exercise Pack Material |
For Police Officers The PPS Members' Guide (pdf 231Kb) The NPPS Members' Guide (pdf 224Kb) Unmarried Partners - members' guide Options Exercise Choice Forms: For officers currently contributing to PPS - Word document (44kb) For officers currently contributing to PPS - Adobe PDF (93kb) For officers currently not contributing to PPS - Word document (49kb) For officers currently not contributing to PPS - Adobe PDF (99kb)
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2. For Pensions Administrators Options Exercise: Options Exercise Guidance (excluding Annex) Options Exercise Guidance - Supplement 1 Options Exercise Guidance - Supplement 2 Options Exercise Guidance - Supplement 3 Summary of Transitional Arrangements
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What if I have any comments or concerns?
Full contact details can be found in the contacts section of this site.