This is your pension…

In the run up to the 10th May there is lots of rhetoric about why we are marching, it’s not just about pay and pensions, etc etc etc. And that is true; the service to the public will suffer immeasurably if Winsor is enacted in full, the standard of recruit for the rank of constable will fall, and in years to come when it is privatised I, as a member of the public too, will be wishing for the good old days of key performance indicators, community impact assessments, and training videos where actual, real, police officers are taught to smile for the olympics or shake the hands of suspects they are about to search. However, I have found some more on the pensions front and I think it’s important I share it with you.

On the 6th March 2012 Ian Rennie, top johnny banana in the National Police Federation and negotiator on the staff side of the Police Negotiation Board (PNB) received correspondence from Peter Spreadbury, some big noise at the Home Office.

In it Mr Spreadbury talks about accrued pension rights for Officers in the 1987 scheme (PPS), and starts off by referencing a meeting on the 31st January. So just as I suspected this has been going on for some time. They are going to get rid of the PPS (and the NPPS for joiners after 2005) be in no doubt about that.

What they are proposing, as a little sweetener, is to slightly increase the accrual rate for the PPS so that once it is closed we will get a little bit more out of it than we were expecting. For example, if the scheme closes in 2015 (which it will unless we do something drastic), and you have 10 years service at that point, then work for another 15 years (making 25 years total) you would receive a pension from the PPS of £8,000 a year instead of £6,667. This would be in addition to any new pension. BUT, and here’s the big BUT, if the new pension is significantly lower in value (which it will be) and you do 15 years in it, given you’ve only got 8k out of 10 years in the PPS (and that’s with it being supplemented), how much do you think you’d get out of any new one? Hmmmmm. A 25 year PPS pension would provide a half final salary pension. A 30 year 2/3rds. I don’t see this getting anywhere near that, unless perhaps you work significantly longer.

If you want to see the letter itself, to check I’m not scaremongering or making this up, here is the link .

So, the National Federation have been engaged in dialogue about the future of our pensions for some considerable time and Mr Rennie has only recently sent out a letter reassuring his members that we will still have ‘one of the best available’? Well, that phrase is obviously dependant on what all the other ones look like, isn’t it?

Now is the time to get behind the Federation, with May 10th looming, but I do think they have some serious questions to answer. Like what on earth are they agreeing to do to our pensions without even asking us what we think on the matter?! Like with Winsor 1 they appear to be going down the ‘trust us, we know best, we can negotiate’ line, and we all know how Winsor 1 ended. We were lucky to retain time and a third overtime. If they can’t answer those questions, or they achieve a deal where it protects themselves whilst shafting the rest of us, a la ACPO, then the Quislings should be taken out and shot (metaphorically of course, I abhor violence of any kind, well, unless it’s ‘Proportionate Legal Accountable and Necessary’.)

Onto another letter. This can be found here. It is a letter dated 27th March 2012 and is from the Rt Hon Theresa May to John Randall, chair of the PNB. May sets out the form the new scheme should take:

  • A normal pension age of 60
  • Accrual rate of 1/57th (no mention of double accrual like the PPS in the last 10 years)
  • Cost ceiling of 28%
  • Taxpayer contribution of 14.3% (vs around 24% now)
  • Employee contribution rate of 13.7%

May says that the accrual rate is 5% more generous than the main public sector schemes, which reflects the unique nature of our role. So that’s 5% for the danger, disruption to and restrictions on personal life, distressing situations, shifts, stress, exhaustion and lowered life expectancy (if you do shifts for your whole career) that goes with being a police officer. This shows you how much they value what we do.

Also note how the employee contribution is significantly higher (13.7% instead of the original 11% – almost an extra 25%) and the taxpayer cost is reduced from about 24% (this figure, surprise surprise, is not in her letter, I had to go digging for it elsewhere) as it is now, to 14.3% (a reduction of around 40%). The most important thing to remember though is the wording of the letter. ‘Subject to regular review’. So if they want to, they’ll change it again with far less fuss than they are encountering now, and we will get even less back, or have to work for even longer.

May also says that if you are within ten years of your retirement you will be protected and will get what you were expecting from the PPS. So that’s a large proportion of the CI/Supt and ACPO ranks catered for then. Wonder how much resistance they’ll put up? Thankfully this also protects a large number of my colleagues at the coal face, but sadly not me. So this is a little bit of divide and conquer, they hope those who are protected will accept it and not make a fuss on behalf of everyone it does affect. May goes on to make reference to the content of the first letter I described above, that there will be a little bonus for the removal of the PPS, and that she wants the PNB to respond by 22 June 2012. That’s not a lot of time to come to a well thought out and reasoned response is it?

Annex A of her letter lists the details of the preferred scheme and what elements of it are up for discussion.

Main details (for all of them please see the link to the letter):

  • Career average scheme (defined contribution rather than defined benefit)
  • Accrual rate of 1/57ths (with the double accrual now PPS is equivalent to 1/45ths if you do 30 years)
  • Normal pension age of 60
  • Average contributions should be 3.2% more than current average
  • No fixed lump sums, optional commutation with a factor 12:1 (commutation factors now depend on age but are all higher)
  • Ancillary benefits (death in service etc) that match current scheme open to new members (I read this as matching NPPS, not PPS)
  • Members rejoining within 5 years can link service together (5 years – we heard this figure in Winsor 2 didn’t we? Something about being able to leave the job either voluntarily or otherwise, then return within 5 years? What a coincidence! I wonder what this means?!)

If you want a vague idea of what this is worth then you can multiply your years of service by your average salary, then divide the result by 57. This is a very basic and inaccurate way of working out what you’d get a year out of it. Remember, that figure won’t include commutation, tax etc etc etc. Very basic, but gives you an idea. As a rough estimate 30,000 x 30 years = 900,000 divide that by 57 and you get 15,000. So if you did 30 years in the proposed new pension you’d get less than half your final salary back. I must stress, this is a very rough example, so don’t complain I haven’t got it exactly right. I’m not trying to make it look worse than it actually will be, but until there are further details it is difficult to be more accurate.

Now the bits that May has kindly allowed the PNB to discuss:

  • Accrual rate
  • Revaluation (the little bonus for having the PPS taken away)
  • Employee contribution rates (but there is caveat – the Govt is committed to savings as set out in the spending review so I doubt there is much room for manoeuvre.)
  • Ancillary benefits
  • Rejoiners
  • Transferees from other schemes
  • Early and late retirement
  • Abatement in existing schemes (reduction/removal of)
  • Start date (set at April 2015)
  • Transitional protection

What’s missing from the list of things to debate? Yes, you got it, normal pension age of 60. They have decided. It’s not up for negotiation.

So, aged 59, what am I going to do? Work in the back office because I’m tired and clapped out from 40 years of policing (for me it will be about 40 years by then)? Winsor says I’ll lose a significant proportion of my salary if I do that. Chase 15 year old gangsters around council estates 40 years my junior? I think not. Catch 22 isn’t it? I guess I (and many of my colleagues) will have been got rid of by then – either by compulsory severance, illness/injury (remember if you are injured and unable to be operational but not permanently disabled you’ll get sacked not medically retired), or our own personal choice – therefore saving the Govt even more money because I won’t reach the normal pension age of 60.

I met some civilian staff the other day, they were moaning because their civil service pension contributions have gone up 40 quid this month – from 40 quid to 80 quid. I pay around 400 quid a month. Four Hundred. And May thinks that for paying at least 5 times more (or 400% if my maths is right), I should have a pension that accrues just 5% more generously. Ok, they have to work a few years longer, but I’m sorry, is she having a fucking laugh?!

With the way this is looking I have to ask myself this question – Should I pay at least what I am paying now into a new scheme which will provide significantly lower benefits and work (and therefore pay into it) for longer, or should I use that money to buy another property, rent it out, then sell it in 20/25/30 years and use it to part fund my retirement?

Two of the reasons I am still in the public sector are the job security and the pension provision. I know this is the same for many of my colleagues (although there are obviously many other more honourable and less self serving reasons why we are police officers too). If the Govt remove both of those things (which it looks like they are going to) why would I stay when I can take years of detective experience, training, and skills to the private sector and earn 65k a year being an investigation manager for a multinational company, or 80k a year doing a similar thing down under in the land of sunshine and upward inflection? Ok, it’s not as black and white as that (can I still say that?! Blacklist is on the naughty word list in the Met now after all!) but those are realistic options, I’ve researched them.

I get the feeling that the Govt don’t want policing to be a career. And they don’t want experienced police officers. They cost too much.

They know the cost of everything and the value of nothing.

Edit: I am informed that they do not ‘negotiate’ on pensions, they ‘consult’. So let’s hope they consult their b*****ks off for us!

I have also had a little criticism for moaning that the fed haven’t told us enough on this issue, early enough. I agree and understand that certain things might be restricted for certain periods of time, etc. What I do not accept is that I found out about the general theme of the proposals by doing my own research on the the treasury website over a month ago. Why isn’t this being trumpeted by local reps everywhere? This is our future, not a bit of pocket money for working a rest day! The feedback I am getting from officers is “Thank God you are telling us this stuff, I’ve heard nothing from anywhere else”.


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17 Responses to This is your pension…

  1. TJF says:

    On the 1st of April 2015 I will have 17.5years in. I wonder how many years the members of the Federation on the PNB will have who are negotiating on my behalf ?? I’m all supporting the Federation and will be there on the 10th of May however I fear there isn’t a lot they can do and even if they could are they prepared to rock the boat knowing that ultimately they are unaffected. As I have said on one of your previous posts, I will be giving serious consideration to not entering any new scheme, pay the mortgage off and finf something else to do.

  2. Shafeel says:

    Top work again Sir. Thanks for taking the time to keep us all informed.

  3. TomWinsorfan club (membership-1) says:

    Ridiculously some of the content of these letters was leaked out a few weeks back via various people and even reached my login-attached to email was a trail of people who were saying ‘for your eyes only’ who then forwarded it on,lol.Clearly,its been up for grabs from very EARLY possibly Jan/Feb that old sweats on PPS will avoid the guillotine that others face.A cruel way of causing division,appealing to self interest and leaving younger officers out to dry.I’m one of those older ones and if above is true I will be unaffected but you will find me on the march shouting myself hoarse at the sheer injustice of it all.

    • Shoddy says:

      I agree whole heartedly with your comment, I am the same, 26 years in, will most likely not be effected as much as some,am 50 in July so can go with my pension but a reduced lump sum, I’ staying full term though. i have sacrafised a a day and will be attending to oppose the recommendations, the sad thing is that all the young officers who i work with are not bothered. The likes of myself and you are being called “red” “the militant one” what chance have future officersgot if they will exist that is. I now feel the camapaign for the right to strike is too late to be of any effect at this time, by the tiem we do get it, if we do the damge will have been long done and the office of constable erroded or non existant. i’ll be with you on the march and am saddened with the more mature officers displaying signs of self interest but at least we can say we tried, there are a lot who cant say that.

  4. Excellent post. You should be in the main federation office checking what the feck they are up to before it is to late.

    Not looking good for the boys in Blue…

  5. Emma Royd says:

    If this all pans out as above then I too am one of the ‘lucky ones’ with about 6 to do. I too will be there on the 10th. My younger colleagues do not deserve this.

  6. TJF says:

    Forgive my ignorance in trying to decifer Home Office double speak, when are they saying that you need to have 10 years or less to go to avoid the pension axe. April 2012 or the closing date of the PPS / NPPS?

  7. paddy says:

    Ask yr fed rep. Also say thank you for keeping me updated on what THEY are doing,but apart from stroll thro London what are WE doing. Rolling over by the sounds!

  8. John says:

    As an traffic officer on Scotland I foolishly thought they can’t cut the Police I must be safe as they need law maintained when austerity cuts everywhere else. Now…… I wonder why I bother and I will certainly not be bursting my bollocks for May and Cameron.

    Top that with the distressing news about the English cop taken to a jury over a pursuit and you realise just how fucked up this country really is.

    Sign of broken Britain.

    • Michael Manette says:

      John, I couldn’t have said it better myself. Work to rule from now on. Just wait until we all start pulling out of the Olympics. The games will really start then, as they can’t force anyone to work out-side their own force area!

  9. Michael Manette says:

    I would just like to say a big thank you to everyone who came to London today (10/05/12). But, the biggest thanks go the dog handler who brought his big dog with him. What a pleasure it was to watch it shit out side the home office (Not that I normally take pleasure in such things!). Very well trained, I would have loved to have shook his hand, but, well, you know, he had just picked it up, so I gave the dog a big fuss instead LMAO. I would have left it for the wicked WITCH of the south to clean up, but then she isn’t fit to even do that, without making a mess of it. Again thanks for the memory. It will stay with me and those that witnessed it forever. Great day out!

    Mind How You Go!

  10. DC21 says:

    What a lot of people seem to have missed is the change in commutation factors, has this just slipped in unnoticed? At the moment, with 30 years service, you can commute at a factor of 22:1, which can equate to approaching £180K, but with a factor of 12:1 it drops to £90K – but the same amount of your pension is converted, (ie) equivalent to a tax of 50% !!!!!! This too is excluded from the ‘consultation’ list.

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