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Opting out of the police pension scheme

The Police Federation has issued some guidance to officers considering opting out of the police pension scheme, and those that have already done so.

The guidance comes as the pensions auto-enrolment process approaches.

Andy Fittes, general secretary of the Police Federation of England and Wales, explains: "Every three years all employers in the UK - including police forces - are obliged to re-enrol workers who have previously opted out back into their pension scheme.

"The intention behind this is to safeguard pensioners and ensure they are provided for in their old age, and don't overlook the opportunity to build up a pension. For officers, this means those who have opted out of any of the police schemes will be enrolled into the Police Pension Scheme 2015 (2015 CARE Scheme).

"We are aware that some officers have opted out of the schemes. These officers will be re-enrolled and if they do not opt out again then they will have pension contributions deducted from their salaries. Clearly, this may cause hardship if the deductions are sizable, or if the officer is not alert to the possibility, and fails to act.

"We understand there are relatively few officers who have opted out. However, because of the possible impact on these officers, we are keen to ensure that they understand the auto-enrolment process and take whatever action they feel appropriate."

Process

The Federation wants officers to know what to look out for and in the guidance also stresses that it would not encourage officers to opt out of the pension scheme without taking independent financial advice.

However, if an officer is certain they want to remain opted out of the CARE Scheme then the following applies:

  • There is an opt-out period. The local employer (force) may specify this, but if not then the statutory provision applies under (Reg 9(2) or (3) of the Occupational and Personal Pensions Scheme (Automatic Enrolment) Regulations 2010. This means the opt-out period will start on the date statutory re-enrolment information is given.
  • The employer MUST give the following information to the officer
    • A statement that the officer has been or will be re-enrolled
    • The date for this
    • The value of any pension contributions, and a statement that these will be deducted.
  • The contributions must be deducted from the next payroll after re-enrolment.

What should I do if I previously opted out and wish to do so again?

  • Any officer who is certain that they want to still opt out will have to make that known to the employer and pension provider as soon as possible after receiving the statutory letter or email notifying them that they are being re-enrolled.
  • The officer has one month to complete an opt-out notice (provided by the pension provider) and leave the scheme
  • An opt-out notice cannot be submitted prior to the officer becoming an active member
  • After receipt of this, the employer must stop deducting contributions, and refund any already deducted since re-enrolment.

Andy continues: "Clearly, for some officers it is possible that the initial deductions from salary will occur before the opt-notice is actioned by the force. This will depend on local payroll timetables. If you have previously opted out and intend to do so again, then we suggest you contact your force HR (or scheme administrator) to check the timings. Be alert to the need to complete an opt-out notice as soon as possible."