The Police Pension Schemes and Additional Voluntary Contributions (Amendment) (England and Wales) Regulations 2018

PART 1 Introductory

Citation, commencement, effect and extent

1.—(1) These Regulations may be cited as the Police Pension Schemes and Additional Voluntary Contributions (Amendment) (England and Wales) Regulations 2018 and come into force on 21st May 2018.

(2) The amendments made by regulations 3 and 5 to 13 have effect from 1st September 2014.

(3) The amendments made by regulations 18 to 28 have effect from 28th July 2016.

(4) These Regulations extend to England and Wales.

PART 2 Amendment of the Police Pensions Regulations 1987

General

2.  The Police Pensions Regulations 1987(1) are amended in accordance with this Part.

Amendment of regulation A10

3.  In regulation A10(2)(h) (aggregate pension contributions for purposes of awards)(2) for “or unpaid parental leave” substitute “, unpaid parental leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave.”.

Amendment of regulation B5A

4.—(1) Regulation B5A (early payment of deferred pension)(3) is amended as follows.

(2) In paragraph (3) for “Unless paragraph (4) applies” substitute “Subject to paragraph (3A)”.

(3) After paragraph (3) insert—

“(3A) All or part of an actuarial reduction may be bought out in accordance with paragraphs (4) to (8).”.

(4) In paragraph (4)(b)—

(a) after “equal to” insert “all or part of”, and

(b) for “paragraphs (5) to (7)” substitute “paragraphs (5) to (8)”.

(5) For paragraphs (6) and (7) substitute—

“(6) If the whole of the compensation lump sum is insufficient to buy out the actuarial reduction, the police pension authority may, in its discretion, pay into the police pension fund an additional amount for the purpose of buying out all or part of the reduction.

(6A) But an additional amount under paragraph (6) is subject to any restriction imposed by regulations made under section 153A of the Small Business, Enterprise and Employment Act 2015 (regulations to restrict public sector exit payments)(4) that applies at the time that the additional amount is to be paid.

(7) Paragraph (7A) applies if the police pension authority—

(a) decides not to pay the additional amount required to buy out all of the actuarial reduction, or

(b) is unable to buy out all of the actuarial reduction because of the restriction referred to in paragraph (6A).

(7A) Where this paragraph applies the regular policeman may pay to the police pension authority a sum equal to all or part of the additional amount that has not been paid by the authority.

(7B) The police pension authority must pay any amount received under paragraph (7A) into the police pension fund.”.

Amendment of regulation F1

5.  In regulation F1 (reckoning of pensionable service)(5)—

(a) after paragraph (1)(da) insert—

“(db) any period of unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave taken on or after 1st September 2014 in respect of which the conditions specified in paragraph (1B) are not satisfied; ”; and

(b) for paragraph (1B) substitute—

“(1B) The conditions referred to in sub-paragraph (c), (da) and (db) of the proviso to paragraph (1) are that the person concerned—

(a) was serving as a regular policeman immediately before a period of maternity, parental, adoption, adoption support or maternity support leave which includes the period of unpaid maternity, unpaid parental, unpaid adoption, unpaid adoption support or unpaid maternity support leave in question and no election under regulation G4 was effective in respect of that person immediately before the commencement of that period of unpaid leave;

(b) in accordance with the provisions of paragraph (1D) pays to the police pension authority a sum equal to the sum of the pension contributions which would have been payable for the period of unpaid maternity leave, unpaid parental leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave in question if that person’s notional pensionable pay during that period had been at the same rate as that person’s pensionable pay (including any statutory maternity pay, statutory adoption pay or statutory paternity pay(6) payable under the Social Security Contributions and Benefits Act 1992) immediately before the commencement of the period of unpaid maternity leave, unpaid parental leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave which constituted or included the period in question.”.

Amendment of regulation G1

6.  In regulation G1(3) (pensionable and average pensionable pay)(7) for “sick leave, maternity leave or parental leave” substitute “sick leave, maternity leave, parental leave, adoption leave, adoption support leave or maternity support leave”.

Amendment of Schedule A

7.  In Schedule A (glossary of expressions)—

(a) after “active member” insert—

““adoption leave” means, for a person in service as a member of a home police force, leave granted in accordance with regulation 33(8) of the Police Regulations 2003(8) and for a person in service as a member of a police force in England and Wales other than a home police force, any period of equivalent leave taken by the person while in that service;

“adoption support leave” means, for a person in service as a member of a home police force, leave granted in accordance with regulation 33(8)(9) of the Police Regulations 2003 and for a person in service as a member of a police force in England and Wales other than a home police force, any period of equivalent leave taken by the person while in that service;”, and

(b) after “maternity leave” insert—

““maternity support leave” means for a person in service as a member of a home police force, leave granted in accordance with a determination(10) made under regulation 33(8) of the Police Regulations 2003 or, for a person in service as a member of a police force in England and Wales other than a home police force, any period of equivalent leave taken by the person while in that service;”.

PART 3 Amendment of the Police Pensions Regulations 2006

General

8.  The Police Pensions Regulations 2006(11) are amended in accordance with this Part.

Amendment of regulation 10

9.  In regulation 10 (reckoning of pensionable service)(12)—

(a) after paragraph (1)(b) insert—

“(ba) any period of unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave taken on or after 1st September 2014 in respect of which the conditions specified in paragraph (2) are not satisfied;”, and

(b) for paragraph (2) substitute—

“(2) The conditions referred to in sub-paragraphs (a) and (b) of the proviso to paragraph (1) are that the person concerned—

(a) was serving as a regular police officer immediately before a period of maternity leave, parental leave, sick leave, adoption leave, adoption support leave or maternity support leave which includes the period of unpaid maternity leave, unpaid parental leave, unpaid sick leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave in question and no election under regulation 9 was effective in respect of that person immediately before the commencement of that period of unpaid leave;

(b) in accordance with the provisions of paragraph (4) pays to the police pension authority a sum equal to the sum of the pension contributions which would have been payable for the period of unpaid maternity leave, unpaid parental leave, unpaid sick leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave in question if the person’s notional pensionable pay during that period had been at the same rate as the person’s pensionable pay (including any statutory maternity pay, statutory adoption pay or statutory paternity pay payable under the Social Security Contributions and Benefits Act 1992) immediately before the commencement of the period of unpaid maternity leave, unpaid parental leave, unpaid sick leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave which constituted or included the period in question.”.

Amendment of regulation 24

10.  For regulation 24(2)(a)(ii) (final pensionable pay)(13) substitute—

“(ii) paragraph (1)(a)(ii) applied only in respect of any payment in respect of a period of unpaid maternity leave, unpaid parental leave, unpaid sick leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave taken in the period before the election took effect; and”.

Amendment of regulation 25

11.  In regulation 25 (average pensionable pay)—

(a) in paragraph (2) after “parental leave” insert “, adoption leave, adoption support leave, maternity support leave”, and

(b) in paragraph (3) for “unpaid maternity leave, unpaid parental leave or unpaid sick leave” substitute “unpaid maternity leave, unpaid parental leave, unpaid sick leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave,”.

Amendment of regulation 26

12.  In regulation 26(3)(a) (aggregate pension contributions for purposes of repayment)(14) for “unpaid maternity leave, unpaid parental leave or unpaid sick leave” substitute “unpaid maternity leave, unpaid parental leave, unpaid sick leave, unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave;”.

Amendment of Schedule 1

13.  In Schedule 1 (glossary of expressions)—

(a) after “added years” insert—

““adoption leave” means for a person in service as a member of a home police force, leave granted in accordance with regulation 33(8) of the Police Regulations 2003 or, for a person in service as a member of a police force in England and Wales other than a home police force, any period of equivalent leave taken by the person while in that service;

“adoption support leave” means for a person in service as a member of a home police force, leave granted in accordance with regulation 33(8) of the Police Regulations 2003 or, for a person in service as a member of a police force in England and Wales other than a home police force, any period of equivalent leave taken by the person while in that service;”, and

(b) after “maternity leave” insert—

“maternity support leave” means for a person in service as a member of a home police force, leave granted in accordance with a determination made under regulation 33(8) of the Police Regulations 2003 or, for a person in service as a member of a police force in England and Wales other than a home police force, any period of equivalent leave taken by the person while in that service;”.

PART 4 Amendment of the Police Pensions Regulations 2015

Amendment of the Police Pensions Regulations 2015

14.  In regulation 122 of the Police Pensions Regulations 2015 (option to buy out early payment reduction)(15)—

(a) in paragraph (2) after “buy out” insert “all or part of”;

(b) in paragraph (3) after “The cost” insert “to buy out all or part of the early payment reduction”, and

(c) after paragraph (4) insert—

“(4A) A special payment under paragraph (4) is subject to any restriction imposed by regulations made under section 153A of the Small Business, Enterprise and Employment Act 2015 (regulations to restrict public sector exit payments) that applies at the time that the payment is to be made.”.

PART 5 Transitional Provision in Relation to Amendments to the Police Pensions Regulations

Transitional provision relating to Part 2 (regulations 3 and 5 to 7)

15.—(1) Paragraph (2) applies where—

(a) unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave has been taken, and

(b) the period specified in regulation F1(1D)(a) of the Police Pensions Regulations 1987 within which notice in writing must be given has ended, or will end, on or before 21st August 2018.

(2) Regulation F1(1D)(a) has effect as if notice must be given—

(a) on or before 21st August 2018, or

(b) where the police pension authority is satisfied that it was not reasonably practicable to give notice on or before that date, on or before 21st May 2019.

Transitional provision in relation to Part 3

16.—(1) Paragraph (2) applies where—

(a) unpaid adoption leave, unpaid adoption support leave or unpaid maternity support leave has been taken, and

(b) the period specified in regulation 10(4)(a) of the Police Pensions Regulations 2006 within which notice in writing must be given has ended, or will end, on or before 21st August 2018.

(2) Regulation 10(4)(a) has effect as if notice must be given—

(a) on or before 21st August 2018, or

(b) where the police pension authority is satisfied that it was not reasonably practicable to give notice on or before that date, on or before 21st May 2019.

Transitional provision in relation to Part 2 (regulation 4) and Part 4

17.—(1) The amendments made by regulations 4 and 14 do not apply to a person who on or before the 21st May 2018 has applied for a lump sum payment under the compensation scheme.

(2) In this regulation “the compensation scheme” means a scheme contained in a determination made under regulation 14A of the Police Regulations 2003(16) providing for payment of a compensation lump sum to a member of the police force on voluntary retirement.

PART 6 Amendment of the Police Pensions (Additional Voluntary Contributions) Regulations 1991

Amendment of the Police Pensions (Additional Voluntary Contributions) Regulations 1991

18.  The Police Pensions (Additional Voluntary Contributions) Regulations 1991(17) are amended in accordance with this Part.

Amendment of regulation 2

19.  In regulation 2(3)(interpretation)—

(a) omit the definition of “approved scheme”, and

(b) before the definition of “relevant police pension authority” insert—

““registered pension scheme” means a scheme registered under section 153 of the Finance Act 2004(18);”.

Amendment of regulation 3

20.  In regulation 3 (making and acceptance of elections)—

(a) in paragraph (2) for “or 13 (limitations on contributions and benefits)” substitute “(payment and amount of contributions)”, and

(b) omit paragraph (4).

Amendment of regulations 5 and 6

21.  In regulations 5(4) (elections in respect of death benefit cover) and 6(2)(a) (variation and cancellation of elections) (19) omit the words after “the amount to be secured”.

Amendment of regulation 8

22.  In regulation 8 (payment and amount of contributions)—

(a) in paragraph (4) in the definition of “B” for “another approved scheme” substitute “a registered pension scheme”, and

(b) for paragraph (5) substitute—

“(5) The maximum allowable benefits are the maximum amount that can be secured having regard to regulations 5(4) and 6(2)(a).”.

Amendment of regulation 10

23.  In regulation10(1)(b)(inward transfers) for “an approved scheme” substitute “a registered pension scheme”.

New regulation 10C

24.  Before regulation 11 (retirement pensions) insert—

“Retirement Benefits: England and Wales

10C.— (1) A participator may apply some or all of the proceeds of an investment made under regulation 9 to an arrangement with a pension provider for one or more of the following—

(a) payment of a lifetime annuity;

(b) payment of a lifetime annuity and a pension commencement lump sum;

(c) a lump sum commutation payment that—

(i) reflects the value of benefits referred to in sub-paragraph (a) or (b), and

(ii) meets the requirements of regulations 11 and 12 of the Registered Pensions Schemes (Authorised Payments) Regulations 2009 (de minimis rule and payments by larger pension schemes)(20), or

(d) a relevant payment to the participator that complies with the requirements of the Finance Act 2004(21) (“the 2004 Act”).

(2) Paragraph (1) is subject to paragraphs (8), (11) and (12).

(3) The pension provider must provide a participator with an option to receive benefits under paragraph (1)(a) to (c) in accordance with paragraphs (4) and (5).

(4) Any annuity payable under paragraph (1)(a) or (b) must—

(a) be incapable, in whole or in part, of surrender, assignation or commutation;

(b) commence not earlier than the participator’s normal minimum pension age; and

(c) be payable to the participator for life.

(5) A lump sum commutation payment referred to in paragraph (1)(c) may be paid in respect of benefits payable under paragraph (1)(a), (b) or (d).

(6) The pension provider may, in addition to providing a participator with benefits under paragraph (3), provide a participator with alternative benefits options under paragraph (1)(d).

(7) A participator must, no earlier than 3 months before the date from which the participator wishes benefits under these Regulations to be provided, make a benefits election to the police pension authority specifying—

(a) whether and which benefits are to be provided under paragraph (3) or, alternatively, paragraph (6);

(b) the pension provider who is to provide each benefit;

(c) for whom, if anyone, a dependant’s benefit is to be provided;

(d) if more than one benefit is to be provided, either—

(i) the proportion of the amount secured by the total investments made under regulation 9 that is to be applied to the purchase or arrangement of each of them, or

(ii) the dependants’ benefits to be provided expressed as a percentage of the participator’s benefits;

(e) in respect of every annuity to be provided—

(i) the annual rate of the annuity,

(ii) whether it is to be payable for life or for a fixed period,

(iii) whether its rate is to be fixed or to vary and, if it is to vary, how that variation is to be calculated,

(iv) whether the rate may reduce, and

(f) in the case of a participator who chooses a life-time annuity referred to in paragraph (1)(a) or (b) and who dies within a specified period, whether, if the annuity had continued at the rate in force at the time of the participator’s death, a lump sum is to be paid and if so, how that lump sum is to be calculated.

(8) If there are exceptional circumstances of serious ill-health, the police pension authority may in their discretion realise the investments made under regulation 9 without purchasing any annuity, and in that event the amount obtained becomes payable as a lump sum.

(9) More than one benefits election may be made under paragraph (7) and an election must—

(a) be in writing, and

(b) contain such information as the police pension authority request.

(10) Upon receipt of a notice of election under paragraph (7), the police pension authority must, as soon as reasonably practicable, realise the investments made under regulation 9 and apply the proceeds in the manner specified in it.

(11) Where a participator dies before retirement or after retirement but before benefits under this regulation are paid, the police pension authority must realise the investments made under regulation 9 which are to be payable as a lump sum in accordance with regulation 15(2).

(12) The police pension authority must realise the investments made under regulation 9 and apply the proceeds to the purchase of benefits under these Regulations from a pension provider in such form as appears to the police pension authority to be suitable where the conditions in paragraph (13) are satisfied.

(13) Those conditions are—

(a) the date the participator reaches normal minimum pension age is on or after 1st December 1999, and

(b) the participator has attained the age of 75 and has not given a notice of election under paragraph (7) before doing so.

(14) In this regulation—

(a) normal minimum pension age has the same meaning as in section 279(1) of the 2004 Act;

(b) the pension providers means the bodies listed in Schedule 1;

(c) a relevant payment means a Member’s Flexi-Access Drawdown Payment, a Short-term Annuity or a Pension Payment out of Uncrystallised Funds;

(d) a Member’s Flexi-Access Drawdown Payment means—

(i) a payment from member’s flexi-access drawdown fund within the meaning of paragraph 8A of Schedule 28 to the 2004 Act(22),

(ii) a payment from a dependant’s flexi-access drawdown fund within the meaning of paragraph 22A of Schedule 28 to the 2004 Act(23), or

(iii) a flexi-access drawdown fund lump sum death benefit within the meaning of paragraph 17A of Schedule 29 to the 2004 Act(24);

(e) a Short-term Annuity means a member’s short-term annuity within the meaning of paragraph 6 of Schedule 28 to the 2004 Act(25);

(f) a Pension Payment out of Uncrystallised Funds means an uncrystallised funds pension lump sum within the meaning of paragraph 4A of Schedule 29 to the 2004 Act(26).”.

Omission of regulation 11

25.  Omit regulation 11 (retirement pensions)(27).

Omission of regulation 13 and Schedule 2

26.  Omit regulation 13 and Schedule 2 (benefit limits).

Amendment of regulation 15

27.  In regulation 15 (payment by police pension authority)—

(a) in paragraph (2)(a) for “regulation 11(5)” substitute “regulation 10C(7)(f)”;

(b) in paragraph (3) for “regulation 11(8)” substitute “regulation 10C(8)”;

(c) omit paragraphs (4) and (5), and

(d) for paragraph (7) substitute—

“(7) For the purposes of this regulation “the responsible person” means—

(a) so far as the regulation relates to a payment under regulation 10C(1), the pension provider, and

(b) so far as it relates to any other payment, the police pension authority.”.

Amendment of Schedule 1 shoulder note

28.  In the shoulder note to Schedule 1 (pension providers), for “Regulation 11(4)” substitute “Regulation 10C(14)(b)”.

We consent to the making of these Regulations

Paul Maynard

Rebecca Harris

Two of the Lords Commissioners of Her Majesty’s Treasury

24th April 2018

Nick Hurd

Minister of State

Home Office

25th April 2018