Police pensions: Final reform plan outlined by Theresa May
A final framework for the reform of the police pensions in England and Wales has been set out by the government.
Home Secretary Theresa May wrote to the Commons to confirm a move away from a final salary system to a career-average scheme, and an increase in average member contributions to 13.7%.
The government had been in negotiations with policing groups since March 2012.
The plan was welcomed by the Police Federation as the "best deal possible" despite some disappointing aspects.
The changes will come into force from April 2015.
Police pensions were last subject to reform in 2006, creating a police pension scheme (PPS) and a new police pension scheme (NPPS) with a compulsory retirement age of 60 for all but the highest ranking officers.Rank-and-file
Among the main changes set out in the "reform design framework" is the move from a final salary pension scheme, whereby half an officer's pension is based upon their salary upon retirement and half made up of a lump sum, to a pensionable amount based on career average earnings.
End Quote Paul McKeever Police Federation of England and Wales
It is clear from our discussions with the Home Office that... this was the best deal possible to protect the unique position of police officers”
Average member contributions will rise to 13.7%; the rate currently stands at between 12.25% - 12.5% for PPS members and between 10.1% - 10.75% for NPPS members.
A consultation between the Home Office and Staff Side, a group which included representation of rank-and-file officers by their organisation the Police Federation, has been ongoing since 27 March.
Under initial proposals, officers who retired between the ages of 55 and 59 would not have been able to draw their police pension until they reached the normal pension age of 60.
But after negotiations, police officers retiring from 55 years old will be able to draw their police pension immediately, but it will be at a reduced rate from their full pension allowance.
Greater protection for PPS members aged 38 and over has also been secured.
Paul McKeever from the Police Federation said it was satisfied that most of its previous concerns had been addressed.
"Despite being disappointed with aspects of this announcement, Staff Side accepts it within the context of the government's wider public service pension reform agenda.
"It is clear from our discussions with the Home Office that, compared to the reference scheme offered by the home secretary... in March, this was the best deal possible to protect the unique position of police officers."
The Association of Chief Police Officers (Acpo) was also involved in the consultation process. Chief Constable Simon Ash, who speaks for Acpo on the subject, said it "broadly supported" the Home Office changes.
He said: "Acpo have worked constructively with other stakeholders since March to ensure that the best possible balance is achieved for longer-term reform whilst providing sufficient transitional arrangements."
All public service pensions were reviewed in 2010 by Lord Hutton, with his final report in March 2011 recommending a wholesale move away from final salary schemes to pension based around career average earnings.
In February 2012, the think tank Policy Exchange urged wholesale reform of the police pension scheme, claiming it cost the public purse almost £2bn a year and was unaffordable.