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Pensions Update March 1 2013

Published: 01/03/2013

Circular 09/13 updated members on the current position on the Pension Reforms and appears to have raised issues, in the responses received from several members, which are worthy of further explanation.  It is understandable considering the complexity of the talks thus it is hoped that the following provides the necessary clarity on those matters:

 

Mandate

The Mandate for seeking a Normal Pension Age (NPA) of 60 for MDP is one from Annual Conference 2012 which is attended by your representatives on the respective JBB, SSG and NEC committees. These are members who have been elected by you to represent you in your absence and who are empowered to speak on your behalf. There has been no ballot of the Membership to date but what must be appreciated is that balloting members on every matter prior to options being determined would prevent DPF business being conducted thus the appropriate time for a Ballot would be once negotiations are completed and the offer(s) fully understood.

Impact of DPF Position

There are less than 300 members of the MDP on Nuvos but over 2300 on the other schemes thus the Government's proposals have a significant impact on those officers who were due to retire at 60 but are now being expected to retire at State Pension Age (SPA) - which will be 65 and rising to 68 and beyond. That said, DPF are equally aware of the potential impact on those officers currently engaged under Nuvos thus, if we did succeed in maintaining a NPA of 60, we would be hopeful of doing so with benefits equivalent to those currently expected at 65 thus you would be receiving the same (or similar) benefits at an earlier age.

Departmental NPA Offer

The Department's offer of an NPA of 65 was not clearly articulated and did not give a guarantee of retiring at 65 without actuarial reduction. Within the Government's Proposed Final Agreement there is already an opportunity to reduce from State Pension Age by up to three years but the offer from the Department did not give an indication of whether that cost would be borne by them or the individual as it only stated that further talks would be required to determine how an NPA of 65 would be maintained. Neither did it clearly articulate if the three years would be extended should the SPA go beyond 68 - talks with the Cabinet Office have suggested that the SPA could potentially rise to 72 and perhaps as early as 2024. Consequently, there was no guarantee that an NPA of 65 would be maintained indefinitely and DPF did not consider it to be in the best interests of the members to accept such a vague proposition and have sought further clarity from Jonathan Slater and await his reply.

Ill-Health Retirement

The Proposed Final Agreement for the new pension scheme is similar to the current Nuvos scheme which effectively determines a tiered provision for Ill-Health Retirement. An officer being Ill-Health Retired from the Force under these reforms would, unless they are unable to work in any other capacity, be retired on the lower scale which would result in a differential of up to 40%. This is irrespective of age thus if an NPA of 65 is imposed an officer will have even less of a pension than they would with an NPA of 60 due to the fact that they would have longer to go to reach retirement age - Ill-Health Retirement pensions will no longer be 'topped' up.

Costs of NPA below SPA

DPF (as has the Force) has appointed an Actuary to cost an NPA of 60 as well as one of 65 and we await the outcome. As we do not currently contribute the same for our pension as our colleagues in the Police Pension Scheme nor indeed receive the same benefits, it is unlikely (albeit we cannot rule it out) that the cost to the individual for maintaining an NPA of 60 will be equitable to that of our Home Office colleagues but we cannot provide further information at this time. It may well be that the cost is not affordable to the membership thus it is you who will determine what option will be acceptable whenever a Ballot takes place.

Net Pay Deduction

The Pension Reforms have no direct impact on the Net Pay Deduction albeit they are intrinsically linked. Consultation on the pension reform is with the Cabinet Office (on behalf of the Government) whereas Negotiations on the Terms and Conditions of Service (under which NPD belongs) is with the Department. The Department have commissioned The Government Actuaries Department to review, amongst other things, the Net Pay Deduction and we await the outcome.

It should be noted that DPF is fully aware of the impact of increased contributions and continual payment of NPD on take home pay and take this into consideration when negotiating on behalf of the membership. However, it must also be realised that we cannot compel the Department to separate the NPD matter from the Terms and Conditions of Service (TACOS) review albeit we requested precisely that. Alas, they have refused to do so as they expect everything to be looked at holistically as the quantum (total cost) for MDP has already been set - we have asked to be apprised of this cost level and await a response.

With this in mind we advise that it would not be a pragmatic decision to make to opt out of the pension scheme as you would still be liable for the NPD whether in the scheme or not. However, you would not be entitled to any payment whilst on sick leave (long or short term) if you were no longer a member of the scheme nor indeed receive any pension if you were unfortunate enough to be Ill-Health Retired in the meantime.

Terms and Conditions of Service and Winsor

Negotiations on the MDP Terms and Conditions of Service are ongoing with the Department but it should be noted that the Winsor recommendations currently in place within the Home Office police forces cannot be implemented within MDP without negotiation with DPF - this is a position that CCMDP accepts. However, DPF assures you that the Department is seeking to implement the recommendations of Winsor (in part or in full) and irrespective of whether MDP officers have an NPA of 65 or 60. The Winsor argument is therefore, to a certain extent, irrelevant as capability is a far greater issue but it may nevertheless add substance to our argument of obtaining an NPA of 60 as it would be ridiculous to suggest that the Conditions of Service of MDP should be equitable to Home Office police colleagues yet our pension age should remain significantly higher than those same officers.

Fitness and Capability

Contrary to rumour control, there has been no agreement reached on implementing a shuttle run fitness test and the DPF position is not one of age - many individuals over the age of 60 are physically fit and some even fitter than those in their twenties - but one of capability.

There are officers who can run up and down mountains, endure marathons, swim the Channel, compete in cycle races, etc yet, for whatever reason, they are unable to complete a shuttle run fitness test, hence, it would be ludicrous to suggest that they are not fit and should be dismissed. DPF consider it more prudent to conduct a fitness assessment that causes less soft tissue and musculoskeletal damage, does not discriminate against age or gender and actually tests the capability of the individual to fulfil the requirements of their role.

We did reach an agreement with CCMDP to consider such a capability assessment and this has been scoped but we have yet to receive confirmation of what it will entail thus nothing is agreed at this time. Introducing any fitness measure may well have a detrimental impact upon the health and wellbeing of members - even without taking into consideration any increase in NPA - but you can rest assured that its introduction will be dependent upon whether or not the occupational health provision is fit for purpose and the policy and process utilised to implement any fitness assessment is fully supportive of the individual.

Retirement Beyond 60

Many concerns have been raised over whether or not an officer would be allowed to continue in employment beyond 60 if an NPA of 60 was agreed. Unfortunately, it would be difficult at this time to provide a definitive answer as we have yet to succeed with the amendment let alone reach any agreement on an NPA of 60. However, and irrespective of outcome, DPF would expect both the Department and the Force to comply with any discrimination policy under the Equality Act 2010 unless there were factual grounds for not doing so. In other words, we would expect the same rights as currently in force.

National Ballot

Members can rest assured that no decisions on either Pension or TACOS will be made without a National Ballot of the Membership. It must be understood, however, that this cannot proceed until all options have been fully reviewed and clearly determined. Once those details are known the options will be put to you with a brief résumé of what each means so that you can make an informed decision. DPF negotiate the position on your behalf but it is you, the Membership, who determine the outcome.

Finally, as the Ballot will be conducted via the new DPF website you are advised to register with the site in advance to ensure your details are correct and that you receive the opportunity to make your opinion known.

 

DPF HQ

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