Police Scotland warned of exodus of staff after pension changes – Law and regulation

As reported in Oracle Police and the Daily Record, the change – which came into effect on April 1 – resulted in the removal of a pension commutation cap from the 1987 Police Scotland Pension Scheme.

Under the old system, agents with more than 25 years of service but less than 30 years of seniority saw their capital limited to 2.25 times their initial pension, but now the ceiling is removed the lump sum will be “determined by reference to the calculation actuarial tables,” according to a circular sent to members by the Scottish Police Federation in February.

The change was submitted for consultation in December last year and was confirmed when the consultation closed in February.

The implications of the McCloud appeal and other pension issues are being fully assessed by Police Scotland. We closely monitor retirement rates and, as a single national service, we are well able to match resources and manage recruitment to maintain effective policing for the public we serve.

Police Scotland

A circular from the Scottish Public Pensions Agency in February explained: “These amendments remove the restriction in Regulation B7 of the 1987 scheme, which applies to officers who retire with less than 30 years’ service and are aged below their voluntary retirement age.

“The voluntary retirement age is set at 55 for gendarmes and sergeants and 60 for superintendents and inspectors. Under existing arrangements, upon retirement, this cohort of officers could only commute to a maximum of 2.25 times their annual pension.

“These amendments remove this limit entirely, allowing all officers who are entitled to an ordinary pension to commute up to a maximum of 25% of their pension.”

Scottish police will “flexibilize resources”

According to the Daily Record, the lump sum enhancement available to retiring officers can range from £100,000 to £300,000 for all ranks up to chief superintendent. The Sunday Mail, meanwhile, reported that 1,800 officers – around 10% of the force – had inquired about retirement and what their lump sum and salary would be.

Soaring interest has led to a six-week waiting list for officers seeking their retirement figures, the Daily Record reported.

Pensions Expert understands, however, that the precise figure of staff seeking to leave the service following the change in commutation rules is disputed. Although 1,800 staff are indeed expected to leave over the next year, this figure includes those reaching normal retirement age who would have retired regardless of the change.

A Police Scotland spokesperson said: ‘The implications of the McCloud appeal and other pension issues are being fully assessed by Police Scotland. We closely monitor retirement rates and, as a single national service, we are well able to match resources and manage recruitment to maintain effective policing for the public we serve.

England and Wales are not affected

The change itself only applies to the 1987 scheme in Scotland and not to agents in England and Wales. The Police Federation of England and Wales, which chose not to comment on the story, nevertheless campaigned for officers in the rest of the country to receive the same benefit.

The PFEW wrote to Home Secretary Priti Patel in July 2021 criticizing the government’s wider handling of the McCloud appeal and consultation process, specifically mentioning the switch cap, calling it ‘inexplicable’ that the discussion over its removal could have gone on for more than a decade without a resolution.

And this, although “employees and employers agree on the need to remove the cap”, he wrote.

“This intransigence in not granting a cohort of police officers the same flexibility enjoyed by other members of occupational pension plans, as well as the insistence that a benefit which is not an additional benefit but rather a benefit already paid should to be funded for a second time period by the employer is, in our view, at best unfair and unreasonable, and at worst cynical and bordering on immoral,” the PFEW continued.

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“We have repeatedly requested confirmation from [the Scheme Advisory Board] as to what statutory powers grant the Home Secretary the power to provide for the discretion extended to chief constables on this issue, but has never been answered.

“In our view, there is no justification for continuing to impose restrictions that have the practical effect of maintaining the switching cap. The staff associations demand that the conversion cap be removed immediately and that the costs be charged to the pension fund.

The Home Office has been contacted for comment.

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