May 21st, 2008

Cha-ching…yeah, right

Posted in The Job - General by 200

I listened to the Home Secretary, Jacqui Spliff’s, speech to the Police Federation conference live on Radio 5 today.

No I didn’t expect her to change her mind over the back-dated pay farce. I did enjoy the bit  a few moments earlier when Jan berry (Federation Chairman) said:

"How was it that the government found 2.7 billion pounds to dig itself out of a tax hole in advance of a by-election but couldn’t find 30 million pounds to honour our pay deal?"

The one bit of the Home Sec’s speech I was interested in was this:

First, I am announcing today new commutation factors for calculating retirement lump sums under the Police Pension Scheme 1987. These new factors – which are the same for both men and  women – should be implemented in forces from 1 July this year. And they will be back-dated to 1 October last year.

This will increase the lump sum payable to all officers who retire under the ‘old’ police pension scheme, or who retired with a lump sum under the old pension scheme on or after 1 October 2007.

To give you an idea of what this could mean for different officers in different circumstances:

• a 50-year old male constable on the top of the pay scale and with CRTP threshold payments who retires after 30 years and commutes the maximum will get a lump sum of just over £109,000 – almost £23,000 more than under the old factors.
• a 52-year old male sergeant in similar circumstances will get a lump sum of just under £120,000 – almost £24,000 more.
• a 55-year old female inspector in similar circumstances will get a lump sum of just over £142,000 – about £14,000 more.

This is purely for selfish reasons, you understand, being as I retire soon and will be commuting a certain amount of my pension in terms of a lump sum.

Another £23,000 on my lump sum seems pretty good to me. But then I remembered that the government only change things to save money, so what they will probably do is increase the lump sum & decrease the  final pension by an amount which overall will mean they save more money in the long run, back for more tea & medals on the Home Office lawns.

I’ll wait to see the fine print before celebrating

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7 comments

  1. Plodnomore says:

    You also need to work out how much of that commutation lump sum is tax free. A few years ago a mate from the Army found he had to pay tax on everything over £75,000.

    May 22nd, 2008 at 22:55

  2. TaxPayingFool says:

    Too right they’ll reduce the pension – you’re all living too long!

    The mortality tables on which pensions are based are constantly being adjusted. If a scheme actuary notices that retired members are getting older on average, they’re bound to adjust rates accordingly.

    As for the lump sum, swings and roundabouts, mate. Don’t take any more than you have to, when it’s spent it’s spent, but the pension is for life.
    Don’t know if you’re allowed to transfer your fund out of the police fund to the open market? If so, there are some very good deals going at the moment.

    Bottom line – consult a financial advisor – an independent one, not a tied advisor in a bank/building society. No, I’m not one, but on the whole they’re worth checking with.

    *climbs down off soapbox*

    May 23rd, 2008 at 20:35

  3. Soontobearetiredcop says:

    There’s no tax con with this.

    It’s the government’s way of paying you less if you live past your mid-80s.

    But how many ex-cops do that?

    Take the increased lump sum and be thankful.

    I am !!

    May 24th, 2008 at 20:19

  4. Soontobearetiredcop says:

    Oh………..and they’ve brought the boys into line with the girls this time.

    Long overdue.

    The commutation multiplier is now 19(00) for both.

    53 working days to go…………….then paid annual leave for life!

    May 24th, 2008 at 20:25

  5. Soontobearetiredcop says:

    Keep in mind, though…………….for every MONTH (a change) you stay in the job over 50 years of age, the multiplier gradually decreases.

    So pack it in at 50………..or earlier if poss!

    May 26th, 2008 at 20:51

  6. Jim - retired Scot says:

    This whole thing is a major con to divert attention away from the debacle over the pay rise for England & Wales. There was no consultation on this and the Govt. has arbitrarily set a cut-off date of 1 October 2007 (so your ex-mates who retired on 30 Sept – blissfully unaware of any changes, will lose £24000). While you may find this amusing now (as a beneficiary) … just wait till you actually retire, and the service (inc. the Federation) no longer gives a stuff about you.

    Fairness ? … Contributions count for nothing, life expectancy actually has little bearing on calculations ….. this is all down to affordability.

    We’ve been calling for parity between men and women for years, so how come Ms Smith’s new scheme now counts as even greater profitability for women ? The difference, far from being smoothed out, has now gone from £225 per £100 commuted to £400 !!

    Additionally, Any poor sod who joined 30+ prior to 1 Oct will find that they’ve been paying their own wages, in full, for over 14 months. (that’s the amount of their remaining pension added to the lost £24,000).

    Fraudulent ? … you couldn’t make it up mate. Rant over.

    Jim

    July 9th, 2008 at 14:53

  7. How I Made £1 Million Pounds In 7 Years Without A Job. | 7Wins.eu says:

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