Pensions

What is the level of my contribution each month?

11% of Pensionable salary.

How can I get a pension projection?

If you want a projection for divorce proceedings, you need to contact the Essex County Council Pensions Department at Essex County Council, Pensions Services, PO Box11, County Hall, Chelmsford, CM1 1LX. They may be telephoned on 0845 743 0430. You will get a very detailed document in a format that is suitable for court.

For general purposes and curiosity, contact Roy, Mick, or Tony in the Joint Branch Board office. We can run your details through a simple computer program and email you the results. Unfortunately, the software cannot cater for periods of acting or temporary promotion. You need to supply:

  • Date of joining
  • Date of birth
  • Rank
  • Date of promotion where appropriate
  • Do you receive Competence Related Threshold Payment (CRTP)?
  • If you have ever worked part-time, the exact dates and number of hours involved e.g., 25/05/2000 – 24/05/2009 16 hours per week. 25/05/2009 to date 40 hours, etc.
  • If you have brought in service from a transferable pension scheme (for example, the armed forces, the post office, civil service, or the Ministry of Defence Police), you need to supply us with your notional starting date in Essex Police, which will be the actual date of joining plus the amount of time your transferred pension has bought from the Police Pension Scheme.

Our software is accurate to 31st August 2011 to coincide with the end of the three-year pay deal. Anything after that is guesswork as we will probably have a two-year pay freeze and CRTP may go if ACPO gets its way.

We are busy people so please do not ask for a projection if you have 14 years’ service and you are wondering what your commutation will look like out of idle curiosity. There are 16 years to go and anything could happen!

Can I make Additional Voluntary contributions (AVC) to my pension fund?

At the July 2010 meeting of the Police Negotiating Board, the Home Office confirmed that Ministers would go ahead with the previous Government’s proposal to close the Police Pensions Added Voluntary Contributions (AVC) Scheme to new members, increased subscriptions and transferred business from October 2010.

Officers in the PPS 1987 will have until the end of September to join the AVC Scheme. We understand the Home Office has recently written to all pensions administrators with a notice for officers to explain the closure of the AVC scheme.

The NPPS 2006 does not have a linked AVC Scheme.

The Stakeholder scheme provided by Standard Life is unaffected by these changes as under the Stakeholder arrangements contracts are made directly between the officer and Standard Life.

You may also be aware that the Home Office had proposed closing the added years scheme and replacing it with an added pension provision. Please note these proposals are now on hold.

As with all pensions matters, we recommend members seek independent financial advice before making any financial decisions.

What allowances are pensionable?

Pensionable pay includes:

  • Basic Salary (plus any acting or temporary salary)
  • Competence-Related Threshold Payment.

What allowances are not pensionable?

  • Special Priority Payments
  • Housing allowances
  • Dog Handlers’ allowance
  • South East England Allowance
  • Payments that are reimbursements; e.g., mileage, subsistence, overnight expenses.

How is my final pension entitlement calculated?

Your pension will be calculated from your highest average pay in the last three years of your service. This is often referred to as your “best” year. A year is calculated from the date of retirement backwards in blocks of 365 days – it is not a rolling year. This figure is called your Average Pensionable Pay (APP).

For each year of service up to 20, you are given 1/60 of the APP. From 20 to 30 years, you receive 2/60 of APP. This is what is known as the double accrual period.

For example if you retired with 30 years service, your pension would be calculated like so:

20 years @ 1/60 per year = 20/60

10 years @ 2/60 per year = 20/60

Total entitlement = 40/60 or 2/3 salary, which is the maximum.

For illustrative purposes only, if your APP after 30 years service were £36,000 your entitlement without commutation would be £36,000 x 40/60 or £24,000 per annum.

You can commute a maximum of a quarter of your pension as a lump sum. If you chose to commute, the figures would be £24,000/4 = £6,000, which then has to be multiplied by your age factor, which for a male under 51 is 15. So your lump sum would be £6000x 15 or £90,000.

Having commuted a quarter, your “Residual Pension” will be ¾ of £24000 or £18,000 p.a.

Do I have to commute?

No. depending on your personal circumstances and your intentions for life in retirement, you may not want to commute at all, in which case your pension will be two-thirds of your salary.

Do I have to commute the maximum?

No. You can commute any amount up to the maximum. For example, you can say you want half of the maximum, or a quarter of the maximum. You can say that you just want £10,000. It is up to you.

Can I change my mind about commuting?

Not after you have retired. If you decide not to commute and a month after you have retired you change your mind, your lump sum will be taxed. Make your plans for retirement carefully.

Does my age upon retirement affect the amount I will receive?

Your retirement age affects the multiplying factor used in calculating your lump sum. Age does not affect your basic pension of 40/60 of final salary at 30 years’ service. Your lump sum reduces because it is calculated upon your life expectancy at retirement, based upon actuarial tables prepared by HM Treasury. When you commute, you are giving up a proportion of your pension for the rest of your life. The older you are at retirement, the less your remaining life expectancy. The less time you are expected to live, the less pension you are giving up and, therefore, the lump sum will be less.