Guide to public sector pension schemes

London Policeman The scheme is the sixth largest in the UK's public sector

Which employees does the scheme cover?

For England and Wales the schemes cover broadly the 43 "home department" territorial forces.

It also covers a small number of other bodies such as the Serious Organised Crime Agency, National Policing Improvement Agency and HM Inspectorate of Constabulary.

The individual police authorities in Scotland operate similar schemes for their employees.

How many sections are there?

Two, the Police Pension Scheme (PPS) and the New Police Pension Scheme (NPPS).

The PPS closed to new entrants in 2006.

What are the principal benefits?

The PPS provides a two thirds final-salary pension payable at 50 after 30 years service. There is a 1/60th accrual rate for the first 20 years then accrual is at 2/60ths for the final 10 years to give 40/60ths after 30 years.

The NPPS scheme started in April 2006.

The normal pension age is at 55. The pension aims to be half final salary, plus a lump sum of four-times annual pension, after 35 years' service. So the accrual rate is 1/70th to produce a maximum 35/70ths pension.

How many active, deferred and retired members are there?

There are approximately 143,000 active, 20,000 deferred and 126,000 retired members.

What percentage of salary do employees and employers pay?

Officers pay 11% in the PPS scheme or 9.5% in the NPPS scheme.

Two cycling Policemen Police officers now have a normal pension age of 55

Police authorities pay a combined employer contribution rate of 24.2% of staff salaries into both schemes.

What are the funding costs of the scheme?

An actuarial valuation of the scheme as at 31 March 2008 is currently being undertaken but has not yet been completed. No current data is available.

Is the scheme funded or unfunded?

Unfunded. It is paid for out of general taxation, not an underlying investment fund.

What is the value of the scheme's assets (if any) and its liabilities?

The notional future liabilities of the scheme will depend on the current valuation exercise.

What is the average pension in payment?

Around £14,000, including former officers' and dependants' pensions.

Have there been any changes or reforms to the scheme in recent years?

The major reform in recent years was the introduction of the New Police Pension Scheme in 2006.

Two Policeman giving directions The scheme was last changed in 2006

Are there any further changes in the pipeline?

The government is awaiting the findings of the independent public service pensions commission chaired by John Hutton, which includes police pensions in its scope.

The government intends to revalue pensions in payment in line with inflation as measured by the consumer prices index (CPI) rather than the retail prices index (RPI).

Source: Home Office and Police Federation

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