Transparency data

SAB meeting minutes: 28 March 2024

Updated 16 September 2024

Applies to England and Wales

UK Police Pensions Consultative Forum and Scheme Advisory Board Meeting

41st meeting, 28 March 2024, 10:30 – 14:30

Members present

Independent Chair: Julia Mulligan

Secretariat: Chris Moore

Police Federation of England and Wales (PFEW) – Attending as Observers

• Paul Turpin

Police Superintendents’ Association (PSA)

• Dan Murphy (SAB Member)

Association of Police and Crime Commissioners (APCC)

• Andy Tremayne (SAB Member)

Chief Police Officers’ Staff Association (CPOSA)

• Shabir Hussain (SAB Member)

• Gareth Wilson

National Police Chief’s Council (NPCC)

• Clair Alcock

• Claire Neale

Home Office (HO)

• Tom Appleyard

• Sara Alderman  

• Helen Fisher

• Simon Primmer

Superintendent’s Association of Northern Ireland (SANI)

• Amanda Ford

Association of Scottish Police Superintendents (ASPS)

• Stewart Carle

Police Federation Northern Ireland (PFNI)

• Liam Kelly

Department of Justice, Northern Ireland (DoJNI)

• Antonia Hoskins

Scottish Police Authority

• Iain Rawlings

Scottish Police Federation (SPF)

• David Kennedy

First Actuarial

• Craig Moran

Scottish Public Pensions Agency (SPPA) 

• Iain Coltman

Government Actuary Department (GAD)

• Robert Fornear

Welcome and apologies

The Chair welcomed Claire Neale (NPCC) who has just been appointed to the pension dashboard advisory group. Minutes of the previous quarterly meeting were agreed.

Action Point 1: Secretariat to publish finalised minutes of 12 January 2024 on webpage.

Action log of 12 January 2024  

The Chair went through the action log of 05 October 2023, which has been updated in the light of discussion. Key points of all the actions discussed were:

Action Point 2: The Chair to provide an substantive update on SAB’s future at the next agenda.

1. The Chair explained the AP was on the agenda to be covered at item 13.

Action Point 3: SMSG to look at impact on members regarding timing of scheme pays adjustment.  

2. Clair Alcock (NPCC) informed the committee the findings would be sent round in the slide pack and work was still ongoing. The progression had been delayed due to some other priority remedy items that would be discussed later in the agenda.

Action Point 5: The Chair to hold a meeting with Joanne Livingstone (Fire SAB Chair) on local pension board interaction.

3. The Chair said she will contact Joanne Livingstone (Fire SAB Chair) to observe one of the Fire Sab meetings and hold a meeting with her to understand how they function.

Action Point 6: Home Office to provide an update to SAB regarding the timetable on members being able to claim compensation on tax loss concerning remedy.

4. The Chair said the AP would be covered at item 7.

Outstanding from previous meeting

Action Point 2: / 5 Oct 2023 / Jeremy Vaughan (NPCC) to write to the Chair on how the scheme Advisory Board might help amend the regulations on retire and return. 

5. Clair Alcock (NPCC) said the NPCC Workforce Committee’s view was that retirement return should remain an employer’s prerogative to manage their workforce, although they still advocate for retirement return policies in forces. This decision will now be brought to Chiefs Council for consideration on behalf of all 43 Chiefs in their role as employers. Depending on the outcome, the retirement return policy paper will be updated accordingly to reflect the endorsed approach.

6. The next Chiefs Council meeting would provide an opportunity to discuss and potentially finalise the stance on retirement return. Subsequent updates would be provided to the Scheme Advisory Board at the July meeting.

CARE revaluation date

7. Craig Moran (First Actuarial) focused on the alignment between the evaluation of scheme benefits and the CPI used for annual allowance purposes in the police pension scheme. A discrepancy arose because the evaluation was applied on April 1st each year, causing a year-long lag between the CPI rates applied to members’ benefits and the rates used to upgrade the opening value for annual allowance purposes.

8. While some public service schemes, such as NHS and local governments in England, Wales, and Scotland, have aligned the rates, others, like teachers and police, haven’t yet done so, leading to potential benefits or drawbacks for members depending on the rates used.

9. Craig Moran (First Actuarial) said HO recognise the importance, although capacity constraints have delayed action. Recommendations include keeping the issue on the radar and seeking clarity on the possibility of implementing changes by April 2026.

10. Additionally, recent regulatory changes allowing the combination of annual allowance calculations for legacy and reform schemes have been enacted. This change is expected to benefit members by potentially reducing annual allowance charges.

11. Craig Moran (First Actuarial) said despite these improvements, still concern about potential future issues arising from the CPI mismatch.

12. Helen Fisher (HO) acknowledged the need for potential changes in the future, but noted current priorities, including the implementation of McCloud, make it unlikely that any changes will be made in the coming year. There was recognition that volatility within the CPI, especially during general election years, adds complexity to the situation.

13. Gareth Wilson (CPOSA) expressed a desire for a firm date to be set for seeking to change the scheme.

14. Shabir Hussain (CPOSA) touched on the winners and losers resulting from potential changes, with a call for a thorough assessment once pension savings statements for 2022-2023 and subsequent years are available in October.

15. He said the possibility of a backdated amendment should be open, as it was initially promised by the HO as part of the remedy process, and its closure could inconvenience members.

16. Helen Fisher (HO) said there was no promise to retrospectively implement and there would only a prospective solution would be considered. But for the HO to consider firming up a plan of a future change SAB would have to set out the recommendation.  HO could then respond and say they would look to change it for April 2026.

17. The Chair noted in preparation for the SAB meeting on 08 October 2024, SAB should send advice to the Home Office explaining what they were advising and that they would like a response.

18. Helen Fisher (HO) noted that after summer recess when ministers were away, officials could potentially recommend to the Minister that we’ll accept making this change in the future and then respond to SAB accordingly after summer recess.

Action Point 2: SAB to write to the Home office ahead of 08 October meeting  on the possibility of implementing changes regarding the  CPI mismatch by April 2026.

Employee contributions banding

Robert Fornear (GAD) provided a presentation on employee contributions banding. Please see the circulated slide for further details.

19. Robert Fornear (GAD) focused on potential changes to the contribution structure of the police pension scheme to address the undershoot. Four main ideas were presented.

20. Firstly, adjusting contribution rates: which involved increasing the rates, although it was noted that this alone wouldn’t fix the issue, particularly if band 1 had few members.

21. Secondly, changing the gaps between rate band., there are different gaps between each band, allowing for targeted contributions at different salary levels. Adjusting the  gaps could affect how contributions are distributed across the salary scale.

22. Thirdly, modifying band thresholds, involving adjusting where the bands sit within the salary scale. It was acknowledged that this isn’t a straightforward solution due to changes in salary scales since 2015.

23. Lastly, Increasing the number of bands. Adding more bands could allow for more targeted contribution rates, potentially reducing the size of jumps between rates. However, this could increase administrative complexity.

24. Additionally, the concept of future-proofing the contribution structure was discussed. This involves adjusting the bands over time to account for changes in salary scales or inflation to prevent members from drifting out of lower contribution bands. The Home Office’s paper outlined five considerations for discussions on this topic.

25. Helen Fisher (HO) highlighted the importance of setting up a working group to delve deeper into the matter. The focus was on establishing clarity regarding the timing and next steps of the process. This included informal engagement in May and June, leading up to a formal consultation in the summer months, potentially extending past July depending on developments with pay reform.

26. Craig Moran (First Actuarial) highlighted the need to agree on principles for setting contribution bands, suggesting an automatic process for yearly updates to avoid bands becoming outdated. Claire Alcock echoed this sentiment, underscoring the importance of aligning bands with workforce roles and ensuring clarity on pay rates before finalizing band thresholds.

27. Andy Tremayne (APCC) raised concerns about the uncertain timeline due to political factors but supported the working group approach. He also highlighted the opportunity to address opt-outs and increase scheme participation.

28. Dan Murphy (PSA) emphasised the impact of potential contribution changes on members, particularly in the context of previous pay cuts. This highlighted the need for sensitivity and consideration of broader member issues.

29. In response, the Chair proposed scheduling a further meeting to delve deeper into the topic, suggesting the development of a structured agenda to guide discussions. The consensus was to move forward with this approach to ensure a comprehensive examination of the matter.

30. Rob Fornear (GAD) acknowledged the complexity of the issue and the need for more extensive discussions beyond the scheduled time constraints of the SAB agenda.

Action Point 3: Working group to be held to discuss potential changes to the Employee contribution banding.

Compensation mechanism update

31. Clair Alcock (NPCC) provided an update on the progress of drafting process guidance for compensation mechanisms. She emphasised that the guidance outlined the steps scheme managers should take to provide compensation to scheme members. It has undergone legal review to ensure compliance with relevant legislation.

32. Helen Fisher (HO) then added to the update, indicating that their funding guidance, which complements the process guidance, was also nearing completion. She said that the guidance is in its final stages of clearance and should be released shortly.

33. Dan Murphy (PSA) raised concerns regarding the consistency of implementation among scheme managers and the need for timely adoption of the guidance. He expressed worries about potential disparities in compensation outcomes across different regions and urged for measures to ensure consistency and fairness.

34. Clair Alcock (NPCC) suggested that the Scheme Advisory Board take proactive steps to address these concerns. She proposed that the SAB write to scheme managers to raise awareness of the guidance and encourage consistent implementation. Additionally, she suggested that scheme managers could be asked to report back to the board on their decisions regarding compensation, allowing for monitoring and evaluation of consistency.

35. The Chair proposed drafting correspondence for scheme managers, which could be considered at a future meeting in July. This correspondence would aim to address concerns about consistency and promote adherence to the guidance.

Action Point 4: SAB to draft correspondence to scheme managers to address concerns about consistency and promote adherence to the compensation mechanisms guidance for consideration  at the  4 July 2024 meeting.

 Unauthorised treatment of HMT directed 8% interest

36. Clair Alcock (NPCC) provided a update on the current status of the technical position regarding the unauthorised charges set out by the HMRC newsletter. She outlined the legal advice received, confirming that treating the interest as SAMP is the appropriate course of action legally.

37. Clair Alcock (NPCC) acknowledged awaiting updates from the Government Actuary Department (GAD) regarding the interest calculator and clarification from HMRC on precise calculations and event reporting procedures.

38. The discussion revolved around the dilemma of whether to prioritise providing remedy to protected scheme members first or proceed with compensation for all members as planned.

39. Paul Turpin (PFEW) expressed concerns about potential backlash if the timetable were changed, particularly from older members who might feel overlooked. However, there was also recognition of the need to expedite the remedy process.

40. Craig Moran (First Actuarial) suggested proceeding with providing remedy to a portion of members while awaiting further clarity on certain issues, such as interest calculation. Paul Turpin (PFEW) agreed, emphasising the importance of not delaying remedy any further.

41. The Chair noted that, there was consensus among the members to prioritise proceeding with compensation for all members as planned rather than delaying remedy, given the uncertainties surrounding the alternative options and the need to move forward with providing relief to affected scheme members.

42. Clair Alcock (NPCC) acknowledged the difficulty of the decision for staff associations and thanked them for clarifying their position.

Application of early retirement factors for a leaver after age 55 who doesn’t choose early retirement reductions at retirement.

43. Clair Alcock (NPCC) brought up a technical issue regarding early retirement for members leaving after age 55. She outlined a scenario where members choose not to receive their care pension immediately after reaching age 55, resulting in them being treated as deferred members under current legislation. This treatment can lead to a worse-off position for members due to higher early retirement factors applied from deferred status.

44. Clair Alcock (NPCC) raised questions about whether this outcome aligns with policy expectations and whether alternative approaches could yield different results. She also highlighted the consistency of this outcome with the principles of the 1987 scheme, where normal pension age is protected for certain scenarios.

45. Helen Fisher (HO) expressed willingness to collaborate with NPCC to develop a balanced paper outlining the pros and cons of potential changes to early retirement factors. She emphasised the need to consider the cost implications and the impact on different member cohorts before making any decisions.

46. Paul Turpin (PFEW) noted that there may not be many members deferring their benefits at age 55, opting instead for immediate benefits. He pointed out that the rules for the 2006 scheme are similar to those of the 1987 scheme in this regard. While there have been queries about deferring benefits, there haven’t been many instances of members actually deferring them.

47. The Chair suggested further work on the matter, proposing an offline meeting to discuss the pros and cons. Clair Alcock (NPCC) agreed.

Action Point 5: Clair Alcock (NPCC) to hold a meeting to discuss the pros and cons of early retirement for members leaving after age 55.

Scheme manager’s update

48. Clair Alcock (NPCC) clarified the roles of the NPCC pensions team in supporting the Scheme Advisory Board (SAB) and the Scheme Manager Steering Group (SMSG). The SMSG coordinates the views of scheme managers but does not replace their individual roles, while the NPCC pensions team supports the SAB and reports to the SMSG.

49. Clair Alcock (NPCC) noted SMSG, had drafted a letter to HMT and HMRC regarding the challenges with the HMRC digital service and preparing a funding support request to HMT for tax support.

Remedy implementation

50. Paul Turpin (PFEW) said there had been some improvements in the member experience, but there were still lingering issues, particularly with delays in receiving options and payments after retirement. He was concerned about the capacity of XPS resources to handle upcoming challenges, especially with the rollout of the RSS and addressing remedy and rollback issues.

51. Clair Alcock (NPCC) agreed with the concerns and said NPCC were actively working to address them, including through the Gold Group and seeking legal advice.

52. Dan Murphy (PSA)  also highlighted ongoing issues with the annual allowance calculations and the triage system not fully functioning. He emphasised the importance of addressing the issues, particularly for members in superintending ranks and above, as annual allowance problems persist for that group.

NI and Scotland update

53. Antonia Hoskins (DoJNI) provided an update on the implementation of regulations related to ill health retirement within the police pension schemes. She explained that, similar to the McCloud case, regulations have been made to address issues concerning ill health retirement. As of April 1st, the requirement for testing for ill health retirement before joining the scheme has been removed. All members who were subject to this requirement will be returned to the scheme as full members to mitigate the risk of disability discrimination action.

54. Iain Coltman (SPPA) provided an update on the ill health provisions within the police pension schemes, echoing Antonia’s concerns about those paying a reduced rate due to being deemed ineligible for ill health benefits. There is a desire to collaborate with Plus UK and the Home Office to address this issue, although resources are currently stretched.

55. Regarding the Scheme Advisory Board in Scotland, discussions mainly focused on the contribution rate structure. Scotland has a single rate of contributions for all officers, regardless of their earnings, and there is consideration about potentially moving to a tiered structure similar to that in the rest of the UK. The next step involves agreeing on principles to protect lower-paid officers, encourage participation, and future-proof rates.

Future of SAB

56. The Chair noted that a letter from the NPCC had been circulated about a proposal to enhance the infrastructure of the pension scheme, aiming for a collaboration agreement for a single scheme manager. There was a need to work through the business case due to financial implications. It included funding for a full-time person to support the SAB, with the hope of getting this resource in place by April of the following year.

57. The Chair said preparatory steps are being taken, such as conducting a survey of local pension boards, in anticipation of a new way of working for the SAB. A more detailed discussion on this proposal is planned for the meeting on the 4th of July, which will be held in person at the NPCC offices to facilitate better discussion.

58. Additionally, a letter to the Home Secretary outlining plans for the future is in the works. This aims to make PABEW and SAB more effective in providing advice, not only to the Home Office but also to local pension boards and scheme managers.

Any other business

59. Shabir Hussain (CPOSA) explained the paper on partial opt outs was still being researched.

60. The Chair asked about the next stages.

61. Gareth Wilson (CPOSA) said it would be circulated for input and at the next SAB there would either be consensus or an understanding of where people disagree.

62. The next meeting was scheduled for 4 July 2024.