If you retire before your planned date of retirement, or leave the 1987 Scheme, you will be credited with the appropriate proportion of the increased benefits that you were purchasing. Police pension scheme contributions are difficult to afford, why are they so high? Contributions are deducted from pay before it is assessed for income tax, so you will automatically receive full income tax relief at the highest rate you pay. However, these contributions will attract tax-relief, as they will be deducted from your pay before the deduction of income tax. Police Pension Scheme 1987 (PPS 1987) > Your Contributions: You pay contributions towards the cost of your pension benefits. PPS1987, unless they opted out of the scheme. This is generally what you are paid You will have to pay the full cost of the additional benefits. Those Regulations are revoked by the Police Pensions (Supplementary Provisions) Regulations 1987 (S.I. You are strongly recommended to seek Independent Financial Advice before taking any action. Accrued service in the 1987 Scheme, plus increased benefits purchased within the scheme, cannot exceed 40/60ths i.e. twice your pensionable pay, you will be aware that HM Revenue and Customs allow death benefit payments of up to 4 times final remuneration. If you have elected to pay death benefit contributions to provide life cover above the level provided by the 1987 Scheme for death in service i.e. The purchase of ‘added years’ normally entails a long term commitment to pay contributions until you retire or leave the 1987 Scheme. You may choose to increase your pension benefits under the 1987 Scheme, particularly if you are unable to build up 30 years’ pensionable service before your intended retirement age. 30 years. Your contributions for increased benefits are calculated as a percentage of your pay and will increase every time as your pay increases. The Fund does not endorse or support these organisations, the information on their pages or their services in any way and will NOT be held responsible for the contents of these pages. This leaves scope for you to increase death benefits of up to 4 times annual gross earnings. PPS1987 is a ‘final salary’ scheme, which means that your pension is calculated as a proportion of your final average pensionable pay. These are set as a percentage of your pensionable pay. Police Pension Scheme 1987 Scheme … You pay contributions towards the cost of your pension benefits. Tier 2 is those on a basic annual salary of more than £27,000 but less than £60,000. If you are ineligible for ill-health benefits you will pay contributions at a reduced rate. You can stop paying your death benefit contributions at any time, in which case your cover will cease. HM Revenue and Customs place overall limits on pension contributions which are tax-deductible, but these limits are quite generous. If you do not qualify for a maximum pension because you are unable to complete 30 years' pensionable service by your compulsory retirement age, you may be able to purchase extra service to increase your pension benefits on retirement. This will be more expensive than the normal contribution rate because the Police Force will NOT contribute. When you retire, you are able to use your AVC fund to: If you die before retirement, your AVC cannot be used to provide a pension, but the AVC fund will be paid to the Police Force. Several links lead to pages maintained by other organisations, which are provided for your convenience. The AVC arrangement closed to new contributors from 1 October 2010. If you die or retire on ill-health grounds and have bought or are buying added years, you will be credited with the total added years you originally elected to buy. The Police Pension Scheme 1987 Page 7 Contributions are deducted from pay before it is assessed for income tax, so you will automatically receive full income tax relief at the highest rate you pay. You have a choice of investment funds available for the investment of your AVC Fund, which can be changed at any time. These are set as a percentage of your 'pensionable pay'. For those officers who are part time, the tier is determined by their whole time equivalent salary. You cannot purchase added years to cover career breaks if, on your return, you are able to accrue 30 years’ service by age 55. if you have been promoted or have taken up a more senior appointment. The current position is that, unless you are a very high earner, you are normally able to pay 100% of your taxable earnings in a tax year in pension contributions and gain tax relief, although there may be limitations in any year in which your pension entitlement has increased substantially i.e.
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