Actuarial Reductions - LGPS Advice

[Flashman]

Myself and two colleagues are helicopter pilots with the police. We are all in the age bracket (54-58 years old) and have been members of the Local Government Pension Scheme (LGPS) for a number of years. Our employment as pilots is controlled by the Civil Aviation Authority (CAA) who state that we cannot fly single pilot aircraft (police helicopter) post our 60th birthday. We have been informed by our employer, XXXX Police that on reaching our respective 60th birthdays our employment will be terminated by means of "voluntary retirement" and should we wish to take our pensions early, i.e. at 60 years old as opposed to 65 years old then these will be subject to an actuarial reduction of 25% and any lump sum reduced by 14%. Is this correct? Surely, as we are being forced to retire purely due to reaching 60 years of age and not being able to continue employment because of a CAA Directive, this should not warrant the actuarial reduction of our pensions? In effect we are being made redundant. I would be most grateful if you would kindly offer any advice as how we should address the situation we find ourselves in.

[Hilico]

I speak as an LGPS pensions clerk (for the past 15 months) and union rep (for the three years before that).

Someone choosing to retire from the LGPS at 60, when their 'normal retirement age' is 65, would indeed have exactly the reductions you quote.

In your situation it is extremely doubtful the retirement is voluntary.

If you were made redundant at 60, there would be no actuarial reduction. You still wouldn't have accumulated as much pension as if you retired at 65, but that's a different thing.

It's not redundancy - the post still exists - but neither is it voluntary. Was there anything in writing to the effect of 'the postholder agrees to retire at 60'? Certainly if anyone had come to me as a rep in a situation like that I'd've taken the case, but it would have needed a specialist and would quite possibly have gone further up the line.

Hope that's helpful - best wishes, Steve.

[Thomas coupling]

Flashman,
You probably know me! I recall your handle. This has been legally clarified by the unit I used to work for. If you PM me I wil put you in touch with someone who is going thru this right now.
The bottom line is that from a police perspective they MUST offer you a continuation of your employment unless or until you resign or, are retired naturally. Now, at the moment that job is as a police pilot but there are external forces causing them to prevent you from continuing as a pilot because of your SPIFR status.
So LEGALLY they are obliged to offer you an equivalent position - guess what, there are non at this level in the force on this salary that you are 'qualified' to do. You could work for less in a lower scale job if you so wished and if there was a vacancy....
IF you choose NOT to stay on, then it means you have voluntarily retired and consequently your pension is capped proportionately. It is NOT of their doing, I think you'll find them saying....and guess what, legally, they are correct.
You are not alone and I assumed that this was resolved many moons ago. One pilot (Ian....?) took the CAA to court a while back...and lost!
Prepare to retire at 60!

[Flashman]

Thanks for the helpful advice Hilico.

Thomas, a PM will be winging its way to you shortly. Thanks 😎

[homonculus]

I can only speak for the NHS but the advice you have been given would be spot on in the NHS

If you stop working you no longer make contributions. If you take your pension and it is before the normal retirement age it is reduced on an actuarial basis. Your alternative is not to take it but freeze it until the normal retirement age but that leaves you nothing to live on.

Certain occupations are allowed to retire early - psychiatrists retire at 55 but other doctors have to wait until 60. However when all this was set up there were no pilots :ugh:

In the NHS doctors who can't work as doctors press their employer to give them alternative work. It is usually pushing pieces of paper round a desk and the employer soon caves in at the cost or the hassle and makes the individual redundant.

[Gas Generator]

I suggest that ALL police pilots get together and join BALPA - soon. You can claim back a proportion of your fees against tax every year.

Apart from the 60 year old single pilot problem, other problems of an even greater nature are on the immediate horizon. As soon as everyone is on board a pay reduction is coming........

JOIN BALPA

[Flashman]

I'd join tomorrow but we need everyone in police aviation to join if we are to get full BALPA representation. I'll pass the word but there are some BALPA non-believers out there. 👀

[SilsoeSid]

Previous BALPA related Rotorheads threads;

http://www.pprune.org/rotorheads/293283-balpa-refuse-help-its-membership-2.html

http://www.pprune.org/rotorheads/457816-police-helicopter-pilots-balpa-membership.html

[SilsoeSid]

Can we tidy up whether we are talking Pension Age or Retirement Age.

For those at age 50 now, you'll be looking at a 'Pension Age' of 66.
If that's the age we are discussing, that extra year takes the Actuarial reduction from 25% to 29% :eek:
Actuarial reduction | lgps2014.org (http://lgps2014.org/content/actuarial-reduction)


However if its the 'Retirement age' being discussed, there is none. I'm guessing now that it's the contractual wording that counts.
Does the contract specifically mention 'Single Pilot' and also say something like 'you are to hold a valid UK Commercial Pilots Licence'?
Your licence will still be valid until age 65, the point at which you have, by age alone, 'defaulted' on your contract. This is only because of the ANO. If the contract doesn't mention single pilot, I wonder what, in all seriousness, would happen if you turned up for work on your 60th birthday .... !

There are always other tracks to take;

https://www.gov.uk/retirement-age
If an employee chooses to work longer they can’t be discriminated against.

It is against the law to discriminate against anyone because of:
age
etc
:E


Passengers or crew?
http://www.caa.co.uk/docs/1428/SummaryOfCATPTAWANO2009May2010.pdf

For example, if an operator is paid to carry a police observer, that observer will be a passenger and it will be a public transport flight. Similarly where a power company pays for its observer to be carried to inspect power lines or where a television company pays for its camera crew to be carried it will be a public transport flight. Where an observer or camera operator is employed by the operator, it is quite likely that the customer will not be paying directly for their carriage so that it will not be public transport.

[Hilico]

Sometimes I wonder why people find pensions so confusing. Then I read the information available and think 'oh yes, that's why.

SilsoeSid is talking about the State Pension Age when he refers to 66. That's the age at which you qualify for your State Pension.

In the LGPS, the Normal Retirement Age is currently 65. (If you've been in long enough, it's lower.) It's called a 'Normal' retirement age because ordinarily they can't force people to go (which is not the case here). Next year when the rules change, it is expected to change to the same as 'whatever the State Pension Age is'.

I believe that there is a Statutory Discretion to be able to waive actuarial reduction on early retirement. That means it's up to each Pension Fund (eg Suffolk, Birmingham, Strathclyde) to decide their policy on it. Therefore, as a contributor to the fund, you are entitled to know what your Fund's policy is. Bear in mind the policy could say 'under no circumstances'; on the other hand it might say 'on compassionate grounds' or 'on appeal to a subcommittee'.

You don't need 100% membership of BALPA in the office / Region / UK in order to benefit from being a member, you just need to be a member yourself and get them to take it on. Though I must say, the one I was in wouldn't help if you already had the problem and then joined (rather like waiting until your house catches fire and then ringing round for insurance quotes).

[Flashman]

Thanks SilsoeSid & Hilico for your comments. I will try & sort out this issue without the aid of BALPA but I do intend joining them in the near future, if only for peace of mind whilst being employed by NPAS.

[ARIS]

This has been and continues to be the subject of a long standing battle.:ugh:
LGPS rules are clear (and set in concrete), any pension taken before the Scheme's retirement age is subject to an actuarial reduction. Fixating on the term "voluntary" is a red herring.
It is for the employer to decide whether this penalty will be paid by them or the retiree. Grounds that usually result in payment (of the reduction) include redundancy and other forced re-deployment that has been deemed to be in the employer's interest. They will usually also encourage enforced retirees to apply for other posts for which they are qualified, within their organisation.
Most police helicopter pilots' contracts are clear: when you lose your licenced ability to fly single pilot public transport operations - your contract expires. The employer's argument is that this does not constitute enforced redundancy.

I agree with Flashman & others that the way ahead may be via BALPA but feel it is highly unlikely that anything more can be achieved via the age discrimination route. The issue must be taken to the employer, perhaps on the grounds of not offering appropriate pension arrangements at the start of contract. Interestingly there are schemes that would be appropriate, e.g. the Principle Civil Service Scheme enjoyed by the Met police pilots - retirement age 60.:8

[GoodGrief]

Question.
Are you primarily a policeman or a civilian pilot working for the police.
As a policeman you could serve in another (ground) unit until 65, right?

[MightyGem]

Police pilots in the UK are civilians.

[SilsoeSid]

http://www.icao.int/safety/Documents/ICAO_2013-Safety-Report_FINAL.pdf

Upper Age Limit for Pilots

The current upper age limit for pilots engaged in international commercial air transport operations requiring two pilots, is 65 years. This limit applies to both pilots-in-command (PICs) and co-pilots, as a Standard for PICs and a Recommended Practice for co-pilots (Annex 1, paragraph 2.1.10). However, if one pilot is 60 years or more the other must be under 60 (colloquially known as the “one over one under” provision).

When the limit was increased in 2006 from 60 to 65 years, the ICAO Council and Air Navigation Commission (ANC) requested a review after five years of experience had been gained. A questionnaire was distributed to States and international organizations in 2012 and the results were considered by the ANC. This resulted in a new proposal which, if adopted, will permit two pilots aged 60-64 years to be simultaneously at the controls, and change the age limit for co-pilots from a Recommended Practice to a Standard. A State letter will be distributed in the first half of 2013 with a request for comments on the new proposal and if new provisions are agreed they could become applicable as early as November 2014.

[Thomas coupling]

SS: This doesn't help Flashman though does it? :ugh:
Flash: Have you accepted yet, the fact that you are past your shelf date at 60 with your current job :sad:

[SilsoeSid]

Thomas coupling

SS: This doesn't help Flashman though does it? :ugh:
Flash: Have you accepted yet, the fact that you are past your shelf date at 60 with your current job


I'm so sorry TC. I had a look around for the best rotorhead thread to add this info to and decided here.
I appreciate that in your opinion it may be a bit far down the line for Flash, but I disagree given the time scales quoted, there may still be hope for him, with a bit more hope for us others. Next time I'll remember to PM you to consult where and what to post*, so as not to conflict with anything you may think it would conflict with and whether the info I have would be relevant. :rolleyes:

I hope you don't mind me asking a general, for everyone, question;

I wonder who/what the pushing force for this change was?








* but probably not!!!!

[Thomas coupling]

SS: Thanks for finding the time to jump across to this thread from your thread over on NPAS. ;)

What Flashman purports to has been in and out of the wrangler for atleast 7 years that I can recall. It has been beaten to death by the police fraternity and also tested in court and defended by the CAA. Unless the EU disintegrates in the immediate future, taking with it ICAO, there is as much chance of this rule being overturned as there is of you NOT posting on the NPAS forum ever again :ok::ok::ok::ok:

Flash - grow old disgracefully - steal the chopper on your last shift and dump it on Bardsey Island and get your brother to pick you up on his workboat.

Se how long it takes plod to find it :E

[SilsoeSid]

Says the man having posted in 4 different threads within 18 minutes !
Not my thread TC, just as rotorheads isn't your forum! :p


When you say "...there is as much chance of this rule being overturned as there is of you NOT posting on the NPAS forum ever again" , are you sure about that? As my official email has changed and the official NPAS forum has all but disappeared, 'The NPAS Forum' won't be hearing from me again, as it hasn't for a fair few months now. But of course, you wouldn't know this because you don't have .pnn access, do you :ok:

[Camp Freddie]

before I started flying I worked at one time for the inland revenue superannuation funds office (SF0) later the Pensions Schemes office (PSO), although I admit that this was a long time ago (1986-87 actually)

one of the things i did was to approve the rules of new pension schemes as well as rule changes to existing schemes.

as part of this role, approval of 'low normal retirement ages" was common for various employee sectors, who could not normally expect to work to the standard normal retirement age.

for example i approved some low normal retirement ages of 35 for some famous footballers of the day.

the only thing i can't remember is whether this was allowed as a sub section within the existing scheme or if it required a new sub scheme.

it seems to me that the problem here is that when the pilots were first employed as a group that no one took ownership of the task of securing a normal pension age of 60 for the pilot group.

this may have been due to a lack of pilot representation (BALPA membership) i don't know. or may have simply been because no one ever asked and spent energy arguing about interpretation of existing rules rather than getting the rules changed or a sub scheme started.

my knowledge of the former SFO policy is that a change from 65 to 60 should have been no problem at all given the licensing issues that created the problem.

[Thomas coupling]

Camp Freddie: It's got nothing to do with the pension providers or the national governmental pensions rules. It is controlled from without - by ICAO and then EASA who stipulate that a pilot who flies SINGLE PILOT ops MUST either fly with a 2nd pilot who is younger than 60 or NOT fly. (Twin pilot ops takes you to 65+).

Take that aviation rule and place it within a system that (a) requires single pilot ops only and (b) pays a final salary scheme where the scheme matures at 65 and not before and there is your dilemma.
Who takes possession of the problem: The police don't really want to know: "Simply get another pilot to replace this one , your aviation rules are your problem guys". BALPA don't want to know: "Police air ops - a drop in our bureaucratic ocean". The CAA simply regulate.
So the individual is left with the problem of leaving the police (civilian) scheme atleast 5yrs early, incurring a 25% deficit in their pension returns forever. Rock and a hard place comas to mind.:ugh:

[Camp Freddie]

TC,

Camp Freddie: It's got nothing to do with the pension providers or the national governmental pensions rules.

I disagree, the problem is that the rules of the LGPS were never amended to take account of these 'special' non standard employees.

other employers have made provision for this type of circumstance, if football clubs can do it, then the police could.

I just checked with a former colleague who is a current pension fund admin manager and he tells me that special rules for a special section of employees WITHIN the existing scheme, are no problem as long as the trustees sign it off.

did anyone ever ask the trustees for a rule amendment? sounds like maybe you been fighting the CAA when you should have been lobbying the trustees.

[Peter-RB]

Gentlemen,
as an observer thus far to this thread, and to say it very bluntly I am a dyed in wool, long term self employed and past employer of many specialist in my trade,... but if the Police Service dont employ you the Pilots,.. by that statement alone you must be employed by another company or be freelance, I dont think any of you are freelance Pilots, therfore as such you must be employed by XYZ, now when you took your position with XYZ was anything said or did you sign any condition that could have indicated you would be out to grass at 60yrs of age, or is this a new condition being forced upon the Pilots by the Police Service , but to what benefit is this to the employers/Police by ditching highly skilled Pilots who at 60yrs are still well able to do their job..........

Or do younger fresher pilots looking for work do this work for less sheckles..? it does seem to be a contradiction of good sence but seems driven on reading the thread by monetary type bean counting policey's

Peter R-B
Lancashire

[Thomas coupling]

Good point Camp Freddie - I hope the OP is reading this.
Peter: The pilots in question are all directly employed under the LGPS.

[Flashman]

Camp Freddie, thanks very much for your timely information. I have been told that I can expect a response from the West Yorkshire Police HR Department this week in relation to my complaint. Any further advice you may be able to offer would be gratefully accepted.

TC.....
"What Flashman purports to has been in and out of the wrangler for at least 7 years that I can recall. It has been beaten to death by the police fraternity and also tested in court and defended by the CAA. Unless the EU disintegrates in the immediate future, taking with it ICAO, there is as much chance of this rule being overturned as there is of you NOT posting on the NPAS forum ever again",
Although I appreciate your comments, I think you have got the wrong end of the stick on this thread. My fight is not with the CAA. It is with my employer and the LGPS who are actuarially reducing my pension by up to 40% in what they describe as "voluntarily retiring from the scheme".

I will post back once I hear more. :)

[Thomas coupling]

Flashy: I haven't got the wrong end?? Remember it was I who first discovered tis when I fell foul of the system in 2007.
The argument has always been with the actuaries but it is the international agencies which have made the rules of not flying beyond 60 single pilot ops.
The LGPS panel has always declared their hands are tied because it is a law.
However, even in 2007, the LGPS did suggest it could be overridden by the C.C.

Camp Freddie may be your best shot.

[ShyTorque]

The problem was caused when the CAA categorised Police Air Support as "Public Transport".

Shame that where the operation involves directly employed pilots it can't be re-classified as "Aerial Work" or "Private".

[Letsby Avenue]

Interesting argument... My contract makes no mention of 'single pilot' just mentions that 'I must be medically fit to fly' and that I hold a JAA commercial pilots licence which is a legal argument that I have yet to have. My contract does state that it is terminated at age 60 though...

Personally I would take tha actuarial reduction and retire gracefully... flogging around on a pitch black night at 500ft with minimal viz at age 60 loses some of its appeal.

[Thomas coupling]

Letsby - I always found the dark o clock limits as per CAP 360 or whatever it is these days to be very generous indeed. Not once in my 14 yrs as a police pilot did I ever feel nervous/threatened/worried about dark o clock and I worked the harshest patch in the whole of the UK - trust me......
Perhaps your getting to be a little prissy in your dotage?

PS: Have you added up how much the penalty would cost you if you took the reduced pension pot, over the rest of your actuarial life? :=

[handysnaks]

Letsby - I always found the dark o clock limits as per CAP 360 or whatever it is these days to be very generous indeed. Not once in my 14 yrs as a police pilot did I ever feel nervous/threatened/worried about dark o clock and I worked the harshest patch in the whole of the UK

**** me TC, you're ever so wonderful! :rolleyes:

[misterbonkers]

TC - I'm not saying this to have a go. I'm just wondering if you have consider the following?

Have you added up how much LESS will be paid into your pot by leaving early

And offset this against how much extra you gain by leaving the scheme early?

How long are you expecting to live? How long are they expecting you to live?

How much more able are you to do things at 60 versus 67?

And don't forget your earnings each year will still rise in accordance with whatever the scheme is indexed lined too. In any event at the moment it's certainly better than the 1% cap on your wage increase.

So it might not be as bad as you think. What would be a good idea is if the scheme forecast pension annual summary actually reflected the fact that you may stop working aged 60. Then it wouldn't come as quite a shock to folk.

[Thomas coupling]

Oh c'mon Handysnaks - you know what I say is true. Where have you EVER been at night where you have changed the colour of your underpants?

Warning: that's a loaded Q :eek:

Misterboning: I believe what you have described is worthy of further investigation because pensions are like paintings: very subjective. It depends on your financial situation and your goals and aims in life.
But I can only go on what I have expereinced and what others on here have researched like Flashman (I hope) and colleagues.
If you are told by the government that your retirement age is 65, the deficit is 25%. If you are told you retire at 66, it is 40% deficit.

Actuarily speaking a UK male is expected to live until 78. 13 and 14 yrs respectively in receiving your reduced pension.
If one was was to do the cold maths of contributions in Vs benefits out it would be a reasonably close thing (but still in favour of the government).

BUT - remember these are gold plated pensions - final salary pensions, index linked and inflation proof. And this is the issue. By leaving early your 25/40% deficit will then show a massive delta between what you get and what you should have received if you did the full term.
By leaving early and getting a job elsewhere you can guarantee you wont get another gold plated pension again.

For different reasons, I am on the receiving end of a LGPS. I went on to work for far more than I earned as a police pilot which was a bonus, but my wife who also has a LGPS and should see it thru to maturity will hammer my pension into the ground, like for like, simply because she has gone the distance. Same pensions except I ejected at the "equivalent" of 60, even tho I'm not :suspect:
Someone really needs to grip this either from the police perspective or the LGPS perspective, it really is a travesty of justice.

[handysnaks]

Apologies for the thread drift...

Oh c'mon Handysnaks - you know what I say is true. Where have you EVER been at night where you have changed the colour of your underpants?

Warning: that's a loaded Q ]

:p I've been close to it a couple of times, once even when flying a police role!

Thanks for the warning though!! Fill your boots..:)

Meanwhile, back on thread.....

Whilst it is mildly vexing to have to leave at 60, and even more vexing to have that process described as voluntary early retirement, it is what it is. No-one is forced to join the LGPS. We can all opt out and purchase a scheme similar to those that we had in OSS/PAS/Specair. The basic choice was, this is the scheme, these are the conditions, take it or leave it. It is still (in its current form), far superior to the alternatives. We should probably be more concerned with how long it lasts in its current (or new as it is due to change again) form. Just about every other poor sap out there no longer has access to a FS scheme. They are hardly going to be marching in the streets to support 80 odd pilots.

[Thomas coupling]

Handy: I was talking about night flying in the police - walk in the park when compared to mil night flying. Anyway, you spend your police life over massive conurbations don't you :rolleyes:

Onto LGPS: I'm sorry you feel like that (roll over and give up). For one not many if any were told about the age 60 rule when they enrolled into the scheme. Two - it's the principle. The pilot is caught in the middle between ICAO rules and an intransigent LGPS panel!
People like Flashman should be applauded for what they are striving to achieve no matter how long it takes. Morally this is very wrong what is happening here and those in the picture - know it. I bet you won't thank him personally though if he wins this argument and everyone benefits massively, will you:=

[handysnaks]

Anyway, you spend your police life over massive conurbations don't you

TC, predictable, obvious and something I'm quite happy to continue doing,....except for after 03:00 when you would set off for bed and we would still be there, carrying out mutual support in the deep dark hills of the Welsh Marches. :sad:

It's not the responsibility of the LGPS to decide to award early retirement with no penalty. They are responsible for operating the fund under a clear set of rules. Those rules allow for early retirement with no actuarial reduction. However, it is the responsibility of the employer to pay the difference (5 years worth of contribution's + 5 year's worth of pension paid out).

It is easy to throw around phrases like..
(roll over and give up)

I take it you would just solve the problem and it would all be fine?

It may be the case that pilots in the early DE units did not know about actuarial reduction. By the time the unit I work for went DE we did! Anybody going DE into NPAS should also be/have been aware, of the situation.

In the case of my colleagues, I made enquiries regarding the pension beforehand and I went to a pension panel with a colleague who was due to retire and suffer the reduction. We did not manage to convince the panel that the reduction was unfair. Given the current economic climate, and the reaction of the general public to teachers strikes and fire service strikes, both citing pensions as one of the issues, I don't believe it is worth getting frustrated over the pension issue. I am perfectly happy to put my name to the cause to try and negotiate a change, the LGPS is my only pension.
(apart from a couple of years of mirror group)! But it would be with my eyes wide open and in the hope of a spirit of largesse within my current employer.

People like Flashman should be applauded for what they are striving to achieve no matter how long it takes. Morally this is very wrong what is happening here and those in the picture - know it. I bet you won't thank him personally though if he wins this argument and everyone benefits massively, will you

Absolutely, they should be applauded, and should the argument carry I'd be the first in line to pat him on the back. I'll let the fact that you are making judgements about my character pass on this occasion:suspect: But adding a note of realism to the whole affair does not make me anti. There is no point in any of us going around with our hands over our ears (singing 'na, na, na') in the hope that if we don't think of the counter arguments or opinions then nobody else will!

What's more, what will we do if Flashman doesn't win the argument?

[Thomas coupling]

Someone else will pick up the flag from our fallen hero and run with it ....into another bureaucratic brick wall no doubt.

Stay safe Mon Brave.;)

[Flashman]

I'm still trying! Awaiting a reply from the P&CC from a letter I sent two months ago. I did have a response from his secretary within a week stating the Commissioner was looking into the points I had raised but then their CC got himself suspended so my query has gone to the bottom of the pile.

[Bertie Thruster]

EASA 'state' flying (including police flying) is not 'public transport' It's the UK CAA that are preventing 60-65 UK single pilot police flying, within UK national boundaries.

My company termination letter at age 60 stated I was being 'dismissed for substantive other reasons' which HR said was the correct terminology.

Before I was 60 I approached Ian Evans, the last great flag bearer for 60+ SP PT flying. He told me if I 'valued my sanity' not to take on the CAA but to go off and enjoy my life!

So I did and I am!

Still flying 902's, though! :)

[charliegolf]

TC said:

So the individual is left with the problem of leaving the police (civilian) scheme atleast 5yrs early, incurring a 25% deficit in their pension returns forever.

Whilst he might be forced from his post, he is not forced to take his pension with the actuarial hit. The pension can be frozen (though the indexing is not frozen, I believe) and taken in full at 65 if he so wishes.

Thought it worth mentioning.

CG

[Thomas coupling]

CG: His contributions will cease, though. The 'pot' will not grow and he will not receive what he would normally receive if the plan had been left to run.
{Assuming his chances of flying outside the police world are nil - which they would come close to}. At 60 it is extremely unlikely anyone would get a similarly paid job with a similar contributory pension scheme.

PS: I've heard rumbles that the penalty clause has risen from 25% to 30% now? If you withdraw early from the scheme.

Let's hope the PCC responds positively.

[Digital flight deck]

The reduction is base on how many years before normal retirement age, which could be 5, 6, 7 years early. At 6 years early it is -28%

As the government extends retirement age the % could be very large indeed.

[Al R]

Apologies for any typos; I'll blame the i-Pad.

The danger is, if you're in your late 30s, the state retirement age is going to be further down the line than it is now, and the reduction is going to be even bigger. Thinking laterally for the minute, what happens if Pilot A takes 'early' (employers term) retirement at what was previously the normal retirement age of 60, and then dies the next day? His widow is then served with a 50% survivors pension. So, instead of retiring on a previously anticipated annual pension of (say) £30,000 (with a survivors pension of £15,000), the actuarial reduction in the first instance lowers that to somewhere in the region of £22,000 and in the event of death, the survivors pension is then (50%?).. £11,000. That's the unseen fairness that immediately strikes me, a lifetime of expecting a £30,000 lifestyle reduced to one of potentially £11,000.

The CC of Greater Manchester spoke out about police widows a few weeks back - Manchester's police chief adds to calls for change to widows' pensions | UK news | The Guardian (http://www.theguardian.com/uk-news/2014/aug/11/manchester-police-chief-change-widows-pensions) - it'll give you an idea how the uniformed police chain of command views, not just pensions, but the unfairness surrounding survivors pension benefits. Certainly use that angle, ie; the impact on surviving partners.

It wouldn't be beyond the realms of possibility for the scheme trustees to make an amendment to reflect this specific issue, you wonder if they'd have the spine to do so though, in the modern climate. Has anyone approached them? "Devon and Cornwall Police have removed the default/compulsory retirement age from all police staff posts with the exception of our helicopter pilots" - Entry requirements | Devon & Cornwall Police (http://www.devon-cornwall.police.uk/JoinUs/PCSO/Pages/CouldyoubeaPCSO.aspx) - seems clear cut. I take the point you could be retained and employed in the map store for £60k or so, has that been tested yet?

In terms of precedent, other parallels once included ballet dancers, north sea divers etc, people who were allowed to draw occupational benefits early without penalty because their careers are deemed to have a short shelf life. However, when the rules changed in 2006, the £1.5 million they were able shelter from tax in their pension was determined to be clawed back by 2.5 % for each year they retired before the statutory minimum age (50 until 2010 when it went up to 55 thereafter). So footballers retiring at 35 would have seen their lifetime allowance fall by 37.5% to £937,500.

Why is that relevant to you all? Because if you retired 'early', there would be a benefit crystallisation event which would trigger a lifetime allowance test if you took benefits (re previous post referring to doing nothing which most people won't do). My concern right now is that you might have a senior pilot flying for the police who spent a long time in the Army Air Corps on AFPS 75 and 05 and then chucked loads in to a civvy scheme who, if he/she hadn't declared any form of pension protection.. could be in a pickle with their pension lifetime allowance and the subsequent tax charge.

Also LGPS is a swine. It now wants to invest in passive funds, which, if you're 25 or so, is ok.. but if you're in your mid late 50s do you really want to in an investment strategy primarily designed to save the trustees, other members and the state money rather than maximising your benefits and fitting in around you? Probably not. I don't agree with everything in thisarticle and I like a fusion of active AND passive funds these days for most clients, but the jury is still out. I certainly wouldn't want to be approaching retirement and automatically and solely in passive funds without (seemingly) any possibility of changing that.

Why the LGPS should not move to a passive investment strategy - Financial News (http://www.efinancialnews.com/story/2014-08-15/local-government-pension-scheme-threadneedle-campbell-fleming-active-passive-management?ea9c8a2de0ee111045601ab04d673622)

Al
(ex mil now specialist IFA)

[Hilico]

Come to the trustees of the Suffolk Pension Fund and recommend a purely passive strategy, and see what response you get...(I cannot confirm whether I am a trustee and LGPS administrator, of course). And depending on enrolment dates etc, in the situation you describe there could be a death grant payable about ten times the annual pension.

There's worse pension schemes out there.

[Al R]

Fair point well made. You'd assume the ten times payout would happen anyway though, in which case that too would be pro rata cut quite substantially?

Out of interest, what might (hypothetically) the Suffolk response to a 100% passive scheme be? Bearing in mind too, that something like the Royal London AllShare passive is a different beast to most passive (and some active) dross out there. I like passives but I'm not sure I'd hang a helicopter sized pension fund onto it in my final years of employment.

[Hilico]

I stress that this is depending on when you joined the scheme, but the idea is that a member (or dependants) will always get ten years' benefits out of their membership. So, retire and die at the end of year 1, the death grant is nine years' worth. End of year 2, eight years' worth, etc. After ten years it's down to zero. Changing those rules is a Parliament job.

Finding the money to pay the benefits is the employer's risk, not the members. The Fund has to invest to meet the benefits promised. A purely passive strategy would get the bum's rush on the grounds that we need to outperform the market, not simply follow it. Bear in mind the LGPS is not one scheme, it's about one hundred, broadly one for each county.

I should say that the atmosphere when we listen to investment professionals' predictions is distinctly cool. We don't even place much faith in the reported funding level, which comes from the actuaries; within the last year it's gone from 78% funded to 92%, apparently, but none of us would have been remotely surprised if it had gone the other way, and quite a few think it actually did. It'll take so long for the effects of a particular funding level to come out (assuming it never changed again) that we would have died of old age before we could see whether the predictions were true. The approach that has evolved is a significant proportion of active management to get the growth, passive as insurance, and try to identify systematic poor performers as early as possible and get rid of them. You will appreciate I'm probably missing a lot of detail!