What happens when you leave the pension scheme?
Whether you're leaving the Police, moving to a new post in another area of the UK or simply deciding to opt out of the pension scheme, you have a number of options depending on how long you've been a member of your police pension scheme.
Your options may also be complicated by having membership in more than one police pension scheme - and if you've transferred benefits from another pension (which would mean you'd automatically qualify for a pension). The following details are designed to help you make the right choices if you're opting out or leaving.
Your police pension is a valuable benefit
Before leaving your police pension scheme you should carefully consider all your options, comparing any costs and the value of the many benefits provided by the scheme. It’s also worth taking independent financial advice when you’re weighing up your options. Remember, if you remain in the scheme you’ll continue to benefit from:
- a pension payable for life upon retirement once you've completed two years’ qualifying service
- the option to take part of your pension as a tax-free lump sum when you retire
- tax relief on any contributions you pay into the scheme
- a range of benefits for your dependants if you die
- the option to nominate an individual, or individuals, to receive a lump sum payable in the event of your death
- the option to increase your benefits by paying extra contributions which can be deducted along with your regular contributions or paid as lump sums
- the option to apply for ill-health retirement if you’re unable to work due to ill-health.
Leaving with less than three months’ membership
If you leave the scheme within three months of joining your only option is to take a refund of your contributions less certain deductions. Once the refund is paid, you'll have no further benefits remaining in the scheme.
If you have transferred benefits in from a previous scheme you’ll be treated as having been a member for more than three months.
Leaving with more than three months’ service but less than two years
If you leave with between three months and two years’ service, you have a choice. You can either:
- transfer your scheme pension rights to another public service pension scheme (for example if you move to a police force elsewhere in the UK); or
- have a refund of your contributions less deductions. If you take this option you’ll have no further benefits remaining in the scheme.
It’s important to note, opt-out requests are normally processed in the pay period after they’ve been received. You must ensure your request is made by month 22 of your membership at the latest, to meet the 24 month deadline to have a refund.
If you think you may re-join the scheme at some point in the future, you may wish to delay claiming a refund until you have a firmer idea of your future intentions.
Leaving with at least two years’ service
If you leave once you’ve been a member of your scheme for at least two years, your benefits will be preserved in the scheme. Although you will not earn any further benefits, the amount you’ve built up will be revalued in line with increases in the Consumer Price Index until you retire.
You’ll be able to access your preserved benefits from age 60 for members of the 1987 Police Pension Scheme. For members of the 2006 Police Pension Scheme and the 2015 Police Pension Schemes you can access your preserved benefits from age 55 on an actuarily reduced basis or in full at your normal pension age (which is 65 in the 2006 Police Pension Scheme and State Pension age for the 2015 Police Pension Scheme).
Alternately you can transfer your scheme pension rights to another public service pension scheme (for example if you move to a police force elsewhere in the UK)
Moving to another police force outside Scotland
If you move to a police authority in another part of the UK you'll need to join the scheme offered by that country.
You should ask your new employer about their scheme right away and initiate the transfer process immediately so that you maintain the level of benefits you're currently entitled to in your existing scheme - including preserving your normal pension age if you're in either the 1987 or 2006 versions of the Police Pension Scheme.
If you don't arrange a transfer to your new employer's scheme, your benefits will be preserved in the scheme and you'll have various options to take them from age 55.
Taking a career break
If you take a career break, or opt out, you must return to the scheme within five years if your pension is to be revalued in line with increases in the Consumer Prices Index plus 1.25%. If you do not return within five years, it will be increased by the Consumer Price Index alone.
If you have full or tapered protection you’ll only be able to return to either the Police 1987 or Police 2006 schemes if your tapered protection has not expired and your career break didn’t last more than five years. If you also have benefits in either the Police 1987 or Police 2006 scheme, you must return from a career break within five years in order to maintain the link to your final pensionable pay.
Leaving the scheme while still working as a police officer in Scotland
Membership of the pension scheme it is not compulsory. Although all police officers are automatically enrolled, you can choose to opt out at any time by completing an opt out form. Before opting out, however, you should remember that your pension provision is a valuable part of your remuneration package, providing you with a range of benefits as well as an income in retirement. You may want to seek financial advice before opting out of the scheme.
To request an Opt out form, please contact the Police Pensions Team at SPPA (Tel No: 01896 893000). We’ll be happy to talk you through the process and any implications applicable to your personal circumstances.
If you do decide the leave the scheme, your benefits will be treated in the same way as if you had left service.
You should also note that your employer will automatically re-enrol you back into the scheme every three years. You can also re-join the scheme at any time by contacting your employer.