Police Pension Scheme New Police Pension Scheme Options exercise

							Police Pension Scheme 1987
New Police Pension Scheme 2006


Options exercise: guidance for pensions
administrators




Supplement no. 1
1.    Introduction
1.1   These notes supplement the Home Office guidance of 7 September 2006
      (issued by e-mail on 8 September) on the police pensions options exercise.

1.2   Since the main guidance was issued, a number of additional points on the
      options exercise have been raised or come to light. These points, on which
      additional advice is set out below, relate to:

      •   Personal benefit statements and covering letters for officers who are
          currently opted out of PPS (whether or not they have since joined NPPS)
      •   Personal benefit statements and covering letters for female officers uprating
          pre-1990 service
      •   Names and addresses on covering letters.

1.3   Any enquiries about the guidance or the conduct of the options exercise may
      be addressed to the following contacts in the Police Pensions Section at the
      Home Office:

      Adrian Brook     020 7035 1883
      adrian.brook4@homeoffice.gsi.gov.uk
      Sara Alderman    020 7035 1882
      sara.alderman@homeoffice,gsi.gov.uk
      Anne Jones       020 7035 1883 (020 7035 1893 from 16 October)
      anne.jones78@homeoffice.gsi.gov.uk

1.4   Further supplements may be issued as necessary.

2.    Officers who have opted out
2.1   The conduct of the options exercise for officers who have opted out of PPS
      (and not opted back in by 5 April) was covered at paragraphs 3.12, 3.16 - 3.17
      and 3.19 of the main guidance. The text of a covering letter for such officers
      was given at Annex H and a choice from was provided at Annex L.

2.2   As explained in paragraph 2.10 of the main guidance, the regulations provide
      that officers who opted out of PPS with entitlement to an ordinary or deferred
      PPS pension not in payment, and who cancel their election to opt out of PPS
      before the end of the options exercise, can make a transfer election to join
      NPPS and for the service they have built up in PPS to be transferred on the
      options exercise terms. Such officers must accordingly be included in the
      options exercise. This includes both:

      •   those who have re-joined the service or cancelled an election since 5 April
          2006 and are now members of NPPS; and
      •   those who are not contributing to either PPS or NPPS but who can still opt
          to cancel their election (and join NPPS) before the end of the options
          exercise.
2.3    It is now clear that some elements of the original covering letter at Annex H are
       unsuitable – in particular the reference to a benefit statement. We understand
       that the pensions software systems currently in use will not identify officers
       who have opted out of PPS and will not produce a benefit statement for them,
       regardless of whether or not they may already have joined NPPS. A revised
       covering letter for officers with PPS service but who are not paying pension
       contributions to PPS is attached. This should be substituted for the original
       version of Annex H. It should be possible to identify such officers, if not
       through the pensions software then through payroll information.

2.4    The revised version of the letter makes no reference to a personal benefit
       statement, which will not be provided as a matter of course for officers who
       have opted out of PPS. Instead, it invites such officers to ask for further
       information on the level of benefits they could obtain in NPPS by converting
       their PPS benefits across. Such information would have to be provided on an
       individual basis. The number of such requests, given the relatively few officers
       who have opted out of PPS, is likely to be small. Officers who opted out of
       PPS with preserved entitlements to PPS benefits should still receive the two
       booklets and the appropriate choice form.

2.5    Note that this applies only to those officers who have opted out while retaining
       deferred PPS benefits. As explained in paragraph 3.19 of the main guidance,
       officers who opted out of PPS with a refund of contributions, or without ever
       having made any contributions, are not eligible to make a transfer election as
       part of the options exercise and should not receive an options pack.

2.6    The choice form for officers who have opted out, at Annex L of the main
       guidance, is unchanged.

3.     Female officers uprating pre-1990 service
3.1    We understand that the pensions software systems provided by Heywood and
       Paymaster, and used by the majority of forces, will not take account of pre-
       1990 service uprated by female officers, even if payment is complete.

3.2    The notes to the personal benefit statement make the point that officers may
       need to ask for additional information to get an accurate comparison between
       PPS and NPPS, although they do not refer specifically to uprating pre-1990
       service.

3.3.   We recommend that you should identify any officers in this position and insert
       the following additional sentence at the end of the fifth paragraph of the
       covering letter at Annex G of the main guidance, after the words “for instance if
       you have incorrectly been excluded from ill-health benefits (or the other way
       round)”:

             If you are a female officer and you have uprated service pre-1990 (or if
             you are in the process of doing so), for the purposes of a spouse’s or
             civil partner’s pension, you should note that your statement will not take
             this into account. Please contact us if you would like more information
             on how the uprating would affect the figures in your statement.
3.4   If an officer asks for more information then, if you use Heywood or Paymaster
      systems, you will need to carry out a manual calculation to provide a
      comparative statement taking the uprated service into account. Where an
      officer has not yet finished paying for the uprating, we recommend that the
      comparative information provided should be as if payment had been
      completed. If so, you should stress the point made in the explanatory notes to
      the statement that the figures are provided only for the purpose of comparison
      between the two schemes and do not guarantee any entitlement to the benefits
      described.

4.    Names and addresses on covering letters

4.1   The main guidance left open the question of whether the covering letters to
      options packs should be individually addressed. It has been pointed out that
      the Pensions Ombudsman would not regard an unaddressed communication
      as sufficient for the purposes of informing someone of their pension benefits.
      This would seem to be the case even if the communication includes material
      which is specific to the person concerned such as, in our case, the personal
      benefit statement.

4.2   The covering letters to the options packs must therefore include the officer’s
      name and address (home or workplace, as the case may be).



Home Office
19 September 2006
Annex H Options pack covering letter for officers not paying PPS
contributions [REVISED]


Police Pension Scheme 1987 or New Police Pension Scheme 2006: your choice

As you may know, the New Police Pension Scheme 2006 (NPPS) came into effect on
6 April this year. This letter invites you to decide whether you wish to join the new
scheme (if you are not already a member) and whether you wish to convert your
benefits in the 1987 scheme to the new scheme. The accompanying pack provides
information to help you make your choice.

All new entrants to the police service from 6 April join NPPS. Members of the old
scheme, the Police Pension Scheme 1987 (PPS) now have the opportunity to transfer
to the new scheme if they wish. This exercise also provides an opportunity for officers
who opted out of PPS, but who have retained PPS pension rights which have not yet
come into payment, to join NPPS and transfer their PPS service into NPPS and
consolidate their pension rights in the new scheme on the special terms which apply
for the options exercise. You cannot now re-join PPS. Officers who have already
joined NPPS (either upon re-entering the service or opting back into paying pension
contributions since 6 April this year) can also use this opportunity to consolidate their
pension rights if they have PPS service.

If you decide to join NPPS, or if you have already joined, you can retain your PPS
pension rights separately if you do not wish to consolidate them in NPPS.

You only have until 31 January 2007 to transfer your PPS service into NPPS on the
special terms. If you have not joined NPPS already you will also need to apply to join
at the same time as making your election to transfer your PPS service.

Enclosed with this letter are the following:

•   The two booklets Understanding your choice and Making your choice
•   Choice form
•   [Reply paid envelope]

Please check that you have received them all. If not, contact us at the above
address.

The information should help you make up your mind whether to join NPPS if you have
not done so already and, if you have joined or applied to join, whether to move your
PPS benefits across. This is an important decision and we cannot make it for you. If
you require more information about PPS or NPPS, you can refer to the full Members’
Guides for each scheme which are available on the force Intranet or in hard copy on
request.

Please contact us if you would like specific information about the benefits that would
be available to you in NPPS if you were transfer your preserved PPS benefits across.
We will be happy to provide any information we can, but we cannot advise you which
scheme is better for you and you may wish to obtain independent financial advice.
Once you are satisfied that you have the necessary information to make an informed
choice, you should spend some time thinking about what you expect your pension
scheme to provide for yourself and your dependants.

All you need do then is fill in the enclosed choice form (keeping a copy for your own
records) and return it in the envelope provided. The form asks you to decide both
whether to join NPPS (if you are not already a member) and, if so, whether you wish
to move your PPS benefits across or leave them where they are. You must return
the choice form by 31 January 2007 at the latest. But you do not have to wait until
that date - if you can make your decision earlier, please do so. If you do not return the
form by 31 January you will not subsequently be able to transfer your PPS service to
NPPS under the special terms.