June 14th, 2009

Saving for your old age

Posted in The Job - General by 200

I’m quite glad I got out when I did, especially when reading a report in last week’s Police Review.

Entitled “Expensive Police Pensions Unsustainable” it outlines a report from a Richard Lambert, director general of the Confederation of British Industry to the Police Foundation think tank.

Basically, it says that the police pension arrangements are too expensive & should be reformed.

The current arrangements under which I retired are that an officer, on completion of 30 years, is entitled to a pension of 2/3 final salary with the option of exchanging a proportion of that amount for a lump sum (commutation).

The scheme was changed a few years ago and since April 2006 officers joining the force are entitled to a 1/2 final salary pension but must serve 35 years instead of 30, and the final sum is limited to four times the annual pension, though they do pay 9.5% of their income into the scheme instead of what I paid which was 11%.

Mr Lambert notes that such a scheme – the newer one presumably – would be unsustainable in the private sector.

The head of the CBI’s pension policy said “It is absolutely correct that police officers & staff have access to a good pension scheme & the important thing is not to rush to judgement. But the pension scheme as it stands is not sustainable in the long term.

So, if you’re thinking about joining the job, I’d get in a bit sharpish before they decide to remove the pension scheme altogether.

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  1. MarkUK says:

    Many of the defined benefits schemes in the private sector are screwed because, during the Thatcher years, a lot of companies took “pension holidays” as their funds were good enough for present needs. Not a thought to the future.

    The taxes that G Brown Esq took were a drop in the ocean compared with the pension holidays.

    Again, in the private sector, in companies that still have defined benefits, the actual pension is dependent on both length of service AND age at retirement.

    If you have 30 years service and retire at “normal pension age”, you get your two thirds. If you have less service, you get less (obviously). If you retire earlier than the firm’s “normal pension age” (sometimes as low as 58 until recently) then you get a lower pension.

    This is understandable, as the earlier you retire the longer the fund has to pay pension.

    What? Some public entities don’t have a fund, but pay out of revenue (taxes)? You ARE joking?

    June 14th, 2009 at 21:46

  2. Paul says:

    Neither of your pensions are sustainable ; e.g. you don’t contribute much to them. I know it probably seems a lot, but to get the pension you get you’d have to pay in a *lot* more.

    Note; this is not a comment as to whether such a pension is deserved or not (front line yes, bureaucracy/skivers no !), just a comment on how it is funded.

    None of the other public ones are funded either ; the Police one is particularly bad.

    June 14th, 2009 at 21:47

  3. Reactively Proactive says:

    Regardless of what you think of either pension scheme, does anybody actually think it is acceptable to change a scheme that many have been paying into for decades. If you join on a particular scheme it should be honoured. If it isn’t workable, then change it for newbies as they have done which is fair enough. At least this way new staff are fully aware of what the scheme will be and what they need to save for. Changing part way through a scheme by law isn’t on and shouldn’t be allowed in any way.

    June 14th, 2009 at 23:34

  4. john says:

    Maybe if the deduction/contribution was invested it may be different, but probably not. You should be paying about 18 – 25% of your salary as a personal contribution.
    The total public service pension black hole (that needed to fund the pension of those retired and those NOW working (not counting new recruits) is over one trillion pounds, and rising. Just look at your council tax pie-chart to see how much of your council tax is used to fund salaries/pensions.

    June 15th, 2009 at 00:33

  5. Oi says:

    I assume this will be part of a package – ie, politicians pensions will be cut as well?

    [Yeah - alright.... Coat, Hat, Door]

    June 15th, 2009 at 03:59

  6. A loyal reader says:

    Dear Mr Weeks,

    Over the past week I have been reading your blog from it’s very beginning. I have enjoyed every second of it (even if my work doesn’t let me watch the videos etc that you have posted). Although this post doesn’t hold much relavence with Police pensions, I’d like to thank you for providing a intelligent and insightful view into your experiances of the world and the police.

    The only experiances I have ever had with the police is once getting stopped by two very lovely coppers patrolling Plymouth after finding me in a not so sensible state whilst I was at university (no police brutality here, just two people looking out for the public!). The other experiance is that my boyfriend and his Dad are both ex-coppers. My boyfriend quit after one too many complaints, and sick of dealing with the absolute rubbish that comes with modern day policing (such as not being able to protect yourself when being threatened with a needle/ golf club etc etc). His Dad was of your era I believe and was a community officer in the good old days of proper policing. He knew everyone in the village and his wife got told all the gossip so he always knew who to blame for the graffiti or the window being smashed. He is now a training manager in the BTP, and getting fed up with that!

    I find a lot that I can connect with in your blog and I’m steadily realising that all coppers present or past have certain similar traits that come with the job! Anyway, this has been a bit of a ramble about me and mine, rather than thanking you for being so honest about your day to day life. You have inspired me to want to do something better with my working life, although when I’ll have the chance is beyond me. I wish I could say I want to follow in your footsteps but I don’t think that I would be able to deal with the stress and rubbish that comes with being a police officer, I wish I could!!! Anyway, enough of me, I shall be reading every day!!

    June 15th, 2009 at 10:23

  7. R/T says:

    Meant to ask – what’s the max lump sum at the mo, please? And what’s included? Is it calculated just using basic pay? Thanks.

    June 15th, 2009 at 12:58

  8. constableconfused.com says:

    loyal reader,

    we still know who is responsible for the evil doings but unfortunately no-one believes the word of a policeman these days. This has massive ramifications to public confidence, general perception and last but not least court results.

    The rest as they say is history.


    June 15th, 2009 at 13:31

  9. Tony F says:

    The Military pension scheme, when I was in, was paid for by all serving personnel. I think we paid something like 11% directly from our wages. This was, of course, to be invested wisely for us all, so that those that did full term engagements got a pension. The fact that Mr Brown, and his sticky fingered mates, sold off the gold and silver and screwed up everyone’s pension schemes, seems to be a bit ironic.

    June 15th, 2009 at 17:36

  10. Fee says:

    What’s even more ironic is that the contribution holidays were, generally speaking, by order of the Government. This, along with the tax introduced by a certain G Brown whilst Chancellor, and lack of investment returns, has pretty much buggered all final salary pension schemes.

    I’m currently working in the pensions industry, and where we used to have the 2/3rds pension (with max service) and zero contributions, now we’re kicking in 11% and adding five years to the retirement age.

    Anyone want to bet the MP’s pension deal won’t be changed though? It is completely unrealistic and extremely generous. Almost makes me want to stand for Parliament. Almost. The only thing holding me back is the knowledge that leaping across the chamber and throttling someone acting like a badly behaved schoolchild is frowned upon.

    June 15th, 2009 at 17:46

  11. Blueknight says:

    Anyone that joined in the last 35 yrs can look back and see someone that joined before getting a better deal.
    In the early 1970s you could retire on a full pension after 25 years. We used to have NHS expenses reimbursed. A bottle of cough medicine, big deal, but putting a ‘cap’ on a broken tooth was expensive even then.
    Then housing allowance went as did the first half hour of overtime.

    June 15th, 2009 at 21:22

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