Leaving the Scheme
You can opt out of the 1987 Scheme at any time. If you decide to leave, your decision will take effect from the next available pay period after receipt of your notice to opt out.
Opting out of the 1987 Scheme will have a number of consequences, including:
- as you will have 2 years or more pensionable service in 1987 Scheme, you will then be entitled to a deferred pension, which would generally only be payable from age 60;
- if you die in service when you have opted out of the 1987 Scheme, NO lump sum death grant is payable;
- as someone who is not an active member of the 1987 Scheme, you will not be eligible for an ill-health pension if you are medically retired, although you will qualify for early payment of your deferred pension if you are assessed as permanently disabled for all regular employment;
- opting out will affect the benefits which are payable to your survivors;
- you cannot rejoin the 1987 Scheme, only the 2015 Scheme.
You are entitled to a deferred pension if you have at least 2 years qualifying service and you leave the Police Force, or cease to be a member of the 1987 Scheme by opting out of it, without transferring your pension rights to another pension scheme.
The deferred pension will be a proportion of your hypothetical pension i.e. the pension you would have earned by compulsory retirement age, subject to the limit of the maximum ordinary pension.
A deferred pension is payable from age 60. It may be paid earlier if you become permanently disabled from performing the ordinary duties of a Police Officer.
If you leave before age 50 with at least 25 years service, your deferred pension will be paid from age 50.
Transferring your Benefits
If you leave the Police Force or opt out of the 1987 Scheme, you may have different options, depending on the length of your qualifying service. As you will have 2 or more years’ qualifying service, you can transfer your benefits to another pension scheme, or retain deferred benefits within the 1987 Scheme.
You may be able to transfer your 1987 Scheme benefits to another public service pension scheme or another pension scheme which is registered with HM Revenue and Customs. The transfer payment will be in the form of a cash equivalent transfer value.
There are a number of issues to consider before making a transfer. You should be aware that there may be time limits that apply (e.g. 12 months to transfer after joining a club scheme) and that the transfer value may not necessarily buy the same amount of accrued pension in your new scheme – an estimate from your new scheme should provide an indication.
The Government has prohibited any transfers from unfunded public service pension schemes (such as the Police Pension Schemes) into Defined Contribution Pension Schemes and other flexible benefit arrangements from 6 April 2015.
As you will now have more than 2 years qualifying service in the 1987 Scheme, you will NOT be eligible to receive a refund of contributions.
If you are thinking of opting out of the 1987 Scheme, you are strongly recommended to seek Independent Financial Advice before you make a decision.