Police Pensions

Debate between Damian Green and Joe Benton

Wednesday 28th November 2012 Westminster Hall

[Damian Green]

There is no service requirement, but we could discuss that for the rest of the time available. I would more than happily have that conversation with my hon. Friend offline.

Tom Winsor agreed with Lord Hutton that a normal pension age of 60 is appropriate for police officers. Given the findings of the two independent reviews, the Government believe there is a strong and coherent case for the framework, which will be in place from April 2015.

The Police Federation has been mentioned a lot, and having engaged in the process that followed those reviews, it confirmed that it accepts the outcome as the “best deal possible” for police officers in the context of the reform across public service pensions. Paul McKeever, chair of the Police Federation and the staff side of the Police Negotiating Board said, and I will quote him in full for balance:

“Despite being disappointed with aspects of this announcement, Staff Side accepts it within the context of the Government’s wider public service pensions reform agenda. It is clear from our discussions with the Home Office that, compared to the reference scheme offered by the Home Secretary of 27 March, this was the best deal possible to protect the unique position of police officers.”

The right hon. Member for Leicester East asked me to listen to the Police Federation, and I do in that regard.

The right hon. Gentleman also asked me to listen to ACPO. The ACPO lead for reward and recognition, Chief Constable Simon Ash, said:

“The changes to the Police Pension Regulations by the Home Office are broadly supported by ACPO, who have worked constructively with other stakeholders since March to ensure that the best possible balance is achieved for longer term reform whilst providing sufficient transitional arrangements.”

The degree of consensus is often under-recognised. The right hon. Gentleman set out the general picture, but nevertheless both ACPO and the Police Federation have accepted the proposal. There is much of the detail still to arrange for new pension arrangements to be in place for 2015. Obviously, we will maintain the dialogue to make those arrangements work.

The deal means that the normal pension age for police officers will be 60. Aside from the armed forces and firefighters, other public service workers will have a higher normal pension age linked to the state pension age, which is 65 rising over time to 68. That means that police officers will continue to retire earlier than most others, reflecting the nature of the work they do.

We have heard today that some officers are concerned about the prospect of working to 60, but the evidence shows that the average age of those joining the police in recent years is 26. The current open pension scheme—the 2006 scheme—has a 35-year accrual period, so many officers will already be working beyond 60 to accrue a full pension. I recognise that that is a genuine concern for some officers. The framework, therefore, includes flexibility for officers to retire from 55 with an immediate pension and an actuarial reduction linked to the normal pension age of 60.

The increased flexibility of the career-average model also means that there is no cap on the amount of benefits that can be accrued. Under current arrangements for police officers, benefits are capped after 30 or 35 years, depending on the pension scheme. Under the reform framework, there is no cap, so years worked beyond age 60 would provide an enhanced pension.

We are protecting accrued rights for police officers for pension built up by 2015, as we are for all public servants. Most police officers are members of the 1987 scheme, which is a complex scheme that includes uneven periods of pension accrual, so we have developed tailored arrangements to reflect that, thus honouring the Government’s commitment to protect accrued rights and to give police officers a fair outcome.

The Government also made a commitment to give transitional protection to those who were within 10 years of their current normal pension age on 1 April 2012. That applies across the public services, recognising that those nearest to retirement are likely to have least time to plan for that retirement. Again, the complex design of the 1987 scheme has led us to create specific arrangements. As there is no set pension age under that scheme, we have decided to give protection based on age and length of service. All officers aged 45 at 1 April 2012 will be able to remain in their current scheme rather than moving to the new pension arrangements in 2015. We are also giving protection to those who, at 1 April 2012, were within 10 years of retiring on a full police pension. That will give full protection to a further group of officers, including some who were as young as 38 or 39 at 1 April this year. On top of all that, there is also further tapered protection for those who were within four years of qualifying for full protection, in order to smooth the cliff-edge effect that often happens with pension reforms. That tapering again demonstrates, I hope, that the Government have entered into the process in good faith with a view to finding a fair outcome.

I am conscious that going through the details of pension reform does not make for great parliamentary rhetoric, but it is such a serious issue that detailing it is important. I appreciate as well as anyone the degree of understandable emotion caused by the issue, but the underlying point is that, under the new arrangements, the police pension deal is still one of the best deals on offer. I do not underestimate the level of concern among police officers about pension reform, and it is right that they should have clarity at the earliest opportunity about what it means. Many details of how the reforms will be implemented have still to be decided. I repeat the commitment that the right hon. Gentleman wished me to make: the Government will continue to work with our partners in policing on the issue, including specifically those who represent rank-and-file officers.

Throughout the discussions, we have been committed to reaching a fair outcome for police officers. We have done all that we can to achieve a fair pensions package for police officers that reflects the front-line nature of policing work and protects those closest to retirement. Police officers will continue to retire earlier than most public servants, and will continue to benefit from significant employer contributions on top of their own.

I am grateful to the Police Federation for making it clear that they encourage their members to remain in the scheme and will continue to do so after the proposed reforms. I hope that police officers will be reassured by that eminently sensible advice. It is difficult to envisage another investment that would provide the same guaranteed level of income—

[Mr Joe Benton (in the Chair)]

Order. We must move on to the next debate.