How Do I Retire

Even with recent changes to police pensions, the issue around retirement will be similar for all officers. At a certain point in your career, you will have reached a particular point when you are eligible for retirement.

For many officers on the 1987 scheme, retirement will come about after having completed 30 years service. This can include already transferred in pension time from elsewhere. HR and Kier, the pensions administrator, will be able to assist you with this information about your own pensionable service date.

Even if you have the full 30 years pensionable service, you still need to inform the organisation that you wish to retire, on a given date. 

There is no need to retire immediately on passing the 30 year point, but consideration will need to be given as to whether you continue to contribute to the pension scheme.

 The minimum notification period required is 28 days. This allows for several things to take place, including the arrangements around the paying of your pension.

 You should put your notification in a letter or email to Human Resources via your Line Manager. 

If you are certain that your retirement decision will not change a longer notice period than the minimum 28 days would be beneficial, especially for you.  This point is especially true if you have a stock of leave or rest days to take prior to your retirement day. Give plenty of notice and ensure all the administration is done prior to leaving, Please be aware that Police Regulations do not allow for the payment of untaken rest days, so use up your entitlement before leaving. Ensure that you speak to duties prior to submitting your letter of retirement to confirm with them the details of any pre retirement leave.


We recommend that you include the following information in your letter of retirement.

  • Your details including collar number and pin number
  • Your intended date of retirement
  • Whether or not you intend to commute a portion of your pension
  • Details of any pre-retirement leave, including using up rest days
  • If you are away on holiday towards the end of your service, what is the last date you are available to complete the relevant pre-retirement paperwork 

Corporate Finance will write to you at your home address. Included in the correspondence will be three pension options:

  1. Pension without Commutation
  2. Maximum Commutation and the residual pension
  3. Maximum Commutation while avoiding taxation and the residual pension

 Ensure this form is signed and returned with your Commutation election ASAP. If this is not done prior to your retirement date you could lose the right to a Tax Free lump sum.

 Payment of your lump sum will normally be made within the first week of retirement.

 Voluntary deductions from pay will be taken in full from your final pay.

 Certain deductions will then be automatically transferred to your pension, unless you notify payroll to stop them. The cost of the relevant deductions will be changed where appropriate to reflect the retired amount. These deductions will include:

  • Group insurance Scheme
  • PMAS
  • Health Scheme 

You will also be eligible to join NARPO, and can you can sign up online (click here for link)

As a result of receiving a pension your income tax coding will automatically be transferred.  If you are taking up new employment it will be your responsibility to inform the Tax Office at Sunderland about that employment and your new employer that you are in receipt of a pension.


 Further Questions...

 

Q. What allowances are pensionable? A. Pensionable Pay - includes:

  • Basic Salary (plus any temporary salary on temporary promotion)
  • CRTP 

 

Q. How is my final pension entitlement calculated? A. The average of your final year’s salary is used to calculate your pension but the best salary from the previous three years applies, so if for any reason you had a higher salary in either of the 2 proceeding years that is the figure that will be used.

A year is calculated from the date of retirement backwards in blocks of 365 days. 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 & 2/60 of APP for each year thereafter up to 30. 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 maximum.

So for illustrative purposes only if your APP after 30 years service was £36,000. Your entitlement without commutation would be £36,000 x 40/60 or £24,000 p.a

You can commute a maximum of a quarter of your pension as a lump sum. So if you chose to commute the figures would be £24,000 / 4= £6000 which then has to be multiplied by your age factor.  The commutation factors can be found in the WMP Federation Diary or you can download the document Commutation on Retirement for more information.

 

Q. What if I resign before completing 30 years service? A.

  • If you have less than 2 years service your pension contributions will be returned less an adjustment for tax and NI.
  • Between 2 - 25 years service (but not age 55) then you get a Deferred Pension which becomes payable at age 60 (includes pensions increases)
  • 25 - 30 years service (but not age 55) Smaller lump sum (pension x 2.25) which is payable when you reach 50
  • Age 55 with any length of service you are entitled to immediate payment including maximum commutation 

 

Q. Does being temporarily promoted to the next rank affect my pension? A. Yes any salary from being temporarily promoted is included in your Average Pensionable Pay (APP)

 

Q. Can my pension be forfeited? A. Yes but only in very limited circumstances. Regulation K5 of the Police Pension Regulations allows forfeiture in the event of you being convicted of Treason or for an offence which involved the abuse of your position as a police officer or bringing the Service into disrepute. The final decision rests with the police authority and can be forfeited in whole or in part, permanently or temporarily.

 

Q. What is the “Death in service” benefit and who can receive it? A. The Death in Service Lump Sum Grant is calculated as two times your pensionable salary and is paid to your Spouse or civil partner if married and your Estate if not. In addition there is also a Widow/er’s Pension but this is only paid to a legally married spouse or civil partner and would cease in the event of them remarrying or Co-habiting. A surviving child allowance is also paid.

 

Q. Is my pension index linked? A. Yes but only from the age of 55. and at that point it would attract index linking back to date of leaving.

 

Q. When is the best time to retire? A. When it’s right for you, but the last day of the month is a good date, as it means you will receive your full A/L allocation for that month (20 hours) get paid your wage for all of that month and then as your pension is paid in advance you will receive your first pension pay cheque on the 1st day of the next month.

 

Q. How long will I have to wait for my Lump sum & first pension payment? A. The lump sum is normally paid into your bank account the first working day after you leave and the pension is paid on the 1stof each month.

 

Q. Under what conditions is my lump sum only 2.25 X my pension as opposed to the full 30 year or age 55 entitlement? A. If you leave between 25 yrs and 29 yrs 364 days service.

 

Q. Can I opt out of paying any further pension contribution once I’ve got 30 years service? A. Yes you can but (a) you would lose the death in service lump sum grant (b) you would pay tax on the pension contributions which are now in your pay (c) you pay a higher rate of NI (class 1) as you are no longer in an occupational pension scheme & (d) your pension is calculated on the last day you were in the scheme and so will not reflect any subsequent pay increases.

 

Q. Will divorce affect my pension? A. Not necessarily it all depends on individual circumstances, the joint assets of the marriage, and whether your spouse has his/her own pension will impact upon the outcome. The PFEW would recommend that you consult a solicitor who is a specialist in this area of law, such as Gorvin’s who have a department especially for police officers!


Click here to access a guide to the 1987 Police Pension Scheme

Click here to access a guide to the 2006 Police Pension Scheme

Click here to access a guide to the 2015 Police Pension Scheme

 

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