Transparency data

SAB meeting minutes: 12 January 2024

Updated 10 July 2024

Applies to England and Wales

UK Police Pensions Consultative Forum and Scheme Advisory Board Meeting

40th meeting, 12 January 2024, 10:30 – 14:30

Members present:

Independent Chair: Julia Mulligan

Secretariat: Chris Moore

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

• Gemma Fox

• 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)

• Kevin Courtney

• Clair Alcock

• Claire Neale

National Association of Retired Police Officers (NARPO)

• Alan Lees

Home Office (HO)

• Tom Appleyard

• Sara Alderman

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

• Victoria Elliott

Scottish Police Authority

• John MacLean

• Alasdair Corfield

• Sharon Dalli

Scottish Police Federation (SPF)

• David Kennedy

First Actuarial

• Craig Moran

• James Allen

Scottish Public Pensions Agency (SPPA)

• Iain Coltman

XPS

• Graeme Hall

Scheme Managers Steering Group

• Phil Wells

Welcome and apologies

1. The Chair welcomed members to the meeting. Apologies were received from Helen Fisher (HO). Minutes of the previous quarterly meeting were agreed.

Action point 1: Secretariat to publish finalised minutes of 05 October 2023 on webpage. (Completed)

Action log of 05 October 2023

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: Jeremy Vaughan (NPCC) to write to the Chair on how the scheme Advisory Board might help amend the regulations on retire and return.

Clair Alcock (NPCC) said it would be discussed later under the scheme managers update. But the next step was to take it to the next NPCC workforce committee and return to the SAB with their comments from the employer point of view.

Action point 3: SAB members to send evidence of pension issues/delays to PABEW Secretariat inbox. The Chair to draft a letter to Jeremy Vaughan (NPCC) and Clair Alcock (NPCC).

The Chair explained no evidence was received, but it was on the agenda and Clair Alcock (NPCC) would cover in her update.

Action point 4: A meeting to be held between HO, NPCC, and CPOSA to understand the objectives of partial opt-outs.

The Chair said it would be covered in the agenda.

Action point 5: Craig Moran (First Actuarial) and Clair Alcock (NPCC) to revisit the impact of CPI prospectively to understand the impacts and return to SAB with an outlook.

Craig Moran (First Actuarial) said it would be covered in agenda item 10.

Action point 6: Craig Moran (First Actuarial) to summarise Scheme Pays Mechanism Report minor suggested actions and send to Clair Alcock (NPCC) for a decision to send onto GAD or close the actions.

Craig Moran (First Actuarial) said scheme pays factors depend on various assumptions including life expectancies. It was anticipated to undergo significant changes due to an expected larger allowance for the impacts of COVID-19. GAD confirmed its commitment to reviewing these factors in response to the upcoming substantial update from the Office for National Statistics (ONS). Currently, it was a watching brief until further developments.

The Chair proposed closing the action until further news. Craig Moran (First Actuarial) agreed.

Outstanding from previous meeting

Action point 4: The Chair will write a paper on SAB’s future work plan and resourcing and circulate it to members over the summer.

The Chair explained she held conversations with Jeremy Vaughan (NPCC) and Peter Spreadbury (HO) on how to resource the SAB in the future, and further work was needed. But she would return to the issue, perhaps with Jeremy Vaughan (NPCC) , to give a more substantive update at the next SAB. She proposed to close the action and create a new one.

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

Technical matters update a. Timing of scheme pays adjustment for PIA – consistency

2. Clair Alcock (NPCC) explained at the Sab meeting of 03 April 2023 that two technical items were discussed: a weighted accrual input amount example provided by XPS and circulated and an update on the scheme pays mechanism report by Craig Moran (First Actuarial).

3. Clair Alcock (NPCC) said two remaining technical items were outstanding and went through them with a slide deck.

4. The first was the timing of the scheme pays adjustment concerning the calculation of the pension input amount. It involved determining when the deduction for scheme pays should be considered for individuals with a previous tax charge.

5. The matter was taken to the technical group to seek consensus on a uniform approach. While schemes were comfortable with their respective methods and saw no legislative reason for the change, HMRC and GAD were consulted for guidance. The tax manual was referenced during the meeting, confirming that tax laws don’t prescribe when the adjustment must be made. Each scheme has the autonomy to decide on this matter, leading to variations in practice.

6. It was clarified that neither method currently in practice was deemed wrong by HMRC and GAD, as each scheme has the authority to determine when the consequential adjustment for scheme pays occurs.

7. NPCC highlighted the challenge of achieving consistency across schemes, given their decentralised nature and the lack of enforcement powers for decisions made by scheme managers.

8. Clair Alcock (NPCC) presented two potential courses of action: accepting the current diversity in methods or pursuing legal advice to establish a more consistent approach. The complexities of legal advice were acknowledged, particularly the challenge of enforcing decisions across scheme managers, considering that only one out of 43 schemes was known to have used a different method for scheme pays deduction.

9. Phil Wells (SMSG) said the scheme managers views was that it would cost too much time and effort to come up with a consistent answer and would prefer to leave it where the status quo was.

10. Shabir Hussain (CPOSA) said it reflected how powerless the SAB was but would not insist on legal advice as he felt it would not get the SAB anywhere. Dan Murphy felt SAB had only got half the answer, the answer of the impact on the administrator, but it had not looked at the impact on the member.

11. Phil Wells (SMSG) said SMSG agreed that they were happy to be inconsistent on the issue. It was doubtful that they would change their minds but was happy to take an action to assess the likely impact on members.

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

Technical matters update b. 1987 scheme remedy opt-out

12. Clair Alcock (NPCC) said the next slides were to help the discussion following the paper that’s been submitted to the board by CPOSA.

13. The slides covered the issue of effective remedy on opt-outs, particularly the difference in the 1987 scheme and the 2015 scheme regarding opt-out and opt-in provisions. The 1987 scheme historically did not allow individuals to opt out and then back in, unlike the 2015 scheme, which provides re-entry without losing existing protections. This has implications for remedy, affecting contingent decisions and increased tax charges for members re-entering legacy schemes.

14. The CPOSA proposal was to amend regulations, allowing a retrospective option for members to opt out of the 1987 scheme to manage tax implications. HO raised considerations, including technical issues, the scope of tax regulations for remedy, and the potential impact on contributions.

15. HO expressed openness to discussing the proposal but highlighted the importance of a well-supported business case that addressed the various aspects of the issue. Phil Wells (SMSG) said the Scheme Manager Steering Group also discussed the considerations, emphasising the need for a comprehensive business case. But SMSG was unsure of the resources in place considering the work that needed to be done on remedy.

16. Shabir Hussain (CPOSA) reminded the meeting that the SAB had already agreed to the proposal, and it’s for the HO to give effect to the request. However, in order to progress matters, he requested that the HO write with their request for additional information currently absent from the SAB report.

17. Dan Murphy (PSA) questioned whether or not it was the SAB that instructed the scheme managers or whether it was the other way round. As it looked like SAB was being told by SMSG what they were interested in doing and what they would not do. Dan Murphy also explained that the terms of reference for the SAB was to ensure consistency across administrators.

18. The Chair said we had to work together as the SAB does not have powers, but suggested it could be part of a discussion at next meeting on how the SAB worked in the future.

19. Sara Alderman (HO) said HO would need a paper that encompassed the whole of policing and was not just from one staff association. The data and what it was demonstrating was what would be required to convince Treasury.

20. Shabir Hussain (CPOSA) suggested the HO write to CPOSA and explicitly stated what data is missing and they would fill it in. Tom Appleyard (HO) agreed.

Action point 4: Tom Appleyard (HO) to write to CPOSA to explain data needed for business case on opt-outs.

Local pension board update and discussion (NPCC)

21. Kevin Courtney (NPCC), highlighted concerns about inconsistent attendance, lack of representation from key stakeholders, and the challenge of maintaining continuity due to voluntary participation. He felt there was an issue of access to timely and comprehensive information, particularly in addressing complex matters such as the remedy.

22. Craig (First Actuarial) said Fire SAB had similar issues and Joanne Livingstone (Fire SAB Chair) was either attending a few meetings or engaging with a few chairs of the various local pension boards.

23. The Chair said she would pick up with Joanne Livingstone (Fire SAB Chair) as it fed into the other item about how the SAB works.

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

NI and Scotland update

24. Iain Coltman (SPPA) in his role as Scheme Advisory Board Chair in Scotland, provided an update on recent meetings, focusing on scheme valuations and the challenges arising, such as a substantial employer rate increase.

25. Remedy implementation progress was discussed, acknowledging the complexities but expressing optimism about rolling out immediate choice statements for remedy, especially for the immediate detriment cohorts by the end of January.

26. Antonia Hoskins (DoJNI) provided an update from Northern Ireland, noting the absence of a government. Regarding ill health litigation related to care, they explained that due to the identified risks, they received permission to remove the eligibility requirement from April 1, 2024. This change is being managed prospectively and retrospectively, with guidance forthcoming.

27. The employer contribution rates in Northern Ireland had increased to 46.6%. There were plans to work alongside HO to address the membership shortfall.

28. In response to MacLeod, the 2015 scheme forfeiture regulations for survivors are being applied retroactively to the 1987 and 2006 schemes, with the example of preventing individuals convicted of murder from receiving a survivor’s pension.

ABS-RSS template development

29. Utilising another slide deck, Clair Alcock (NPCC) discussed the preparation for creating an ABS RSS template. Deferred choice members, which include active and deferred members, were required to receive remediable service statements by March 31, 2025. The first ABS RSS is targeted to be sent out by August 31, 2024.

30. Several questions were raised, including the projection date for benefits on ABS RSS. Transitional members, having both 1987 and 2015 scheme benefits, will have projections up to age 60, the normal retirement age of the 2015 scheme. The maximum lump sum will be presented on the statement. Members may retire earlier, and mechanisms such as a website will be employed to provide information.

31. The government was consulting on public sector schemes having dashboards by September 30, 2025, and the value data on dashboards will be based on the data provided in the annual benefit statement. It’s crucial to ensure that the information on ABS aligns with dashboard requirements to avoid misleading data.

32. Dan Murphy (PSA) and Paul Turpin (PFEW) felt a lot of members would be retiring at age 55 and below and wondering what it meant for them.

33. Clair Alcock (NPCC) agreed but noted that it was not the job of the annual benefit statement – RSS it was to tell them legally what they’re entitled to at the maximum age.

34. Shabir Hussain (CPOSA) stressed the importance of including the sum total of outstanding scheme pays debits to be incorporated, or at the very least the member was directed to where that information can be found, so that they can be fully informed.

35. The Chair noted members raised flags on the user experience. Clair Alcock (NPCC) said they were giving further thought on how they could propose something that that tackles that issue.

Scheme managers update

36. Clair Alcock (NPCC) focused on the progression of the compensation scheme guidance. The regulations provide information allowing compensation for members for direct financial losses resulting from the remedy or the remedy mechanism. It included compensating for financial losses due to the initial discrimination or the mechanisms employed to provide remedy.

37. Another area discussed was Part 4 tax loss, referring to the Financial and Finance Act, which deals with tax matters. Any tax loss related to the remedy was compensable, and NPCC was working on guidance for scheme managers regarding this aspect.

38. NPCC was working with the HO on financial accounting guidance for scheme managers concerning remedy payments from the pension fund account, ensuring accurate reconciliation of payments.

39. Clair Alcock (NPCC) raised concerns about potential delays in compensation due to the absence of clear guidance and timelines from HO. NPCC said efforts were ongoing to push for timely information to avoid challenges for members in claiming compensation.

40. Dan Murphy (PSA) said it was important that SAB didn’t have to wait until March for an update for the HO as it was consistently being held up.

41. The Chair said it should be taken as an action for HO to provide an out of meeting update noting there was not members from the HO Pension team on the call for the agenda item.

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.

Remedy implementation – joint verbal update, SMSG (Phil Wells) and XPS (Kevin Shiel) and discussion

42. Phil Wells (SMSG) discussed the feedback from scheme managers regarding the implementation of the remedy process, particularly in collaboration with XPS. The NPCC has established oversight group and weekly meetings to ensure members get the best service.

43. The focus was on retirement payments, members should promptly receive information about their payments post-retirement. Significant progress has been made, with around 80% of payments made within seven days in December, compared to about 50% in October.

44. While there have been improvements in retirement payments, attention was also directed toward estimates and options to ensure officers understand and can plan effectively. Regular meetings will continue until March, with considerations for providing ongoing support beyond that period, recognising the potential need for continued meetings between the NPCC pensions team and XPS.

45. Paul Turpin (PFEW) said he had dealings with his members constantly and noted feedback had got better. But there were still people not getting their money on time. Concerningly some of those people, retiring soon on ill health retirement, haven’t got their options including vulnerable people with PTSD.

46. Dan Murphy (PSA) agreed with Paul Turpin’s (PFEW) and asked if there were any trends on those not receiving the required service, as it seemed to be the more complex cases where PSA members would report issues.

47. Graeme Hall (XPS) highlighted the complexity associated with more intricate cases, particularly those involving non-XPS forces. Manual processes were necessary for these cases, leading to additional steps and delays. For instance, if there was an inter-force transfer, XPS needed to contact both the current and previous forces, introducing extra layers to the process.

48. Efforts were being made to streamline and expedite procedures. XPS has requested comprehensive GAD contribution data from all forces, in contrast with the current approach, where data was requested upon an individual’s retirement.

49. XPS was also exploring various strategies. They were working on semi-automated systems, such as spreadsheet calculators and an internal calculation tool. The goal was to have a substantial portion of calculations on a semi-automated platform by the end of the month, which was expected to accelerate processes significantly.

Any other business

50. Paul Turpin (PFEW) noted that Gemma Lofts has left the PFEW. The Chair thanked members.

51. The next meeting was scheduled for 28 March 2024.