Agenda item

The Board were given a presentation on the Police Pension Scheme by Annemarie Allen of Barnett Waddingham.

The presentation covered:

The Police Pensions Schemes, Regulations & Guidance

Ms Allen explained that the Home Office are responsible for the Scheme and that the Police Pensions Regulations 2015 were laid before parliament on 5 March 2015, and came  into force on 1 April 2015.  They contain the new Police Pensions Scheme provision and transition arrangements from the previous Schemes.

She noted that this legislation makes legal provision for governance of the Police Pensions Schemes as required by the PSPA 2013 regarding establishment of the Police Scheme Advisory Board and Police Pension Boards as well as a Scheme Actuary and Employer Cost Cap.

The Board were given a comparison of the three schemes initiated in 1987, 2006 and 2015.  1987 and 2006 were final salary schemes, and 2015 is a career average scheme.

The process of transition to the 2015 Scheme was explained including the protections for those in the previous schemes at 31 March 2015.

Ms Allen also explained that the regulations refer to Government Actuary Department (GAD) guidance and its role, noting some examples such as  commutation limits and factors, transfer values and pension sharing on divorce, purchase of added pensions, pension tax charge debits and early retirement reductions and late retirement uplifts.

Overriding Pensions Legislation

Ms Allen explained the importance and role of overriding pensions legislation, noting some examples such as:

-       Data Protection Act 1998 / GDPR 2018

-       Freedom of Information Act 2000

-       Occupational & Personal Pension Schemes (Disclosure of Information) Regulations 2013

-       Pensions Act 2008 (Auto enrolment)

-       Welfare Reform & Pension Act 1999 (Pensions sharing on divorce)

-       Provisions and reform around exit payments

A summary of overriding legislation concerning record keeping and pension tax was provided.

The Board was informed of the  legislation governing pension schemes’ record keeping. The Public Service Pensions Regulation 2014 were highlighted and the records required to be kept noted.  The legislation requires this information to be 100% accurate.

It was explained to the Board that Scheme Record Keeping is in the Pension Regulator’s defined top 3 risks, that data quality should be reviewed annually and data improvement plans put in place where necessary. 

The Board was then given an overview of the limitations of tax free pension savings allowed in a year under “Annual Allowance”, and the maximum amount of tax free pension saving allowed over an individual’s lifetime under “Lifetime Allowance”.

Two particular issues affecting the Police Pension Scheme 1987 of protected pension ages and the potential for unauthorised payments   were highlighted..

A Member suggested that a materiality score be assessed on the various Pension legislation in relation to the stakeholders e.g. members, the Board and the administrators. It was noted that all were important due to the legal implications.

Further Information

Ms Allen closed the presentation with details of where Members could obtain further information.