State Pensions

The circular opposite contains information about a number of pension changes that will occur in April 2016. These relate to; National Insurance Contributions, the accrual of the new Single Tier State Pension and Guaranteed Minimum Pensions. The changes will affect both serving officers, and retirees. They may affect the amount of take home pay.

The PFEW is disappointed at the lack of information being provided by the pension provider and the Home Office who are responsible.

The attached Federation circular provides some background to the changes and the inpact on serving and retired officers. It is hoped that the relevant bodies will provide further details in due course.

With the introduction of the new ‘single-tier’ State Pension from 6 April 2016, ‘contracted-out’ National Insurance will cease.

 Individuals who pay into a defined benefit pension scheme pay a lower rate of National Insurance called ‘contracted-out’. The 1987, 2006 and 2015 Police Pension Schemes (police officers) and the Local Government Pension Scheme (police staff) are defined benefit schemes.

 The existing state pension is made up of two parts: The basic state pension and the additional pension. If you are contributing to a defined benefit pension scheme you have been ‘contracted out’ of the additional state pension by receiving a rebate of 1.4 per cent on an element of your pay. 

 It is the additional pension that is being abolished from 6 April 2016 and effectively you will be paying more National Insurance each month from pay day 29 April 2016.

 Please use this link to the HMRC NI Calculator where you will be able to gauge the impact on your pay. Unfortunately we do not have the resources to answer queries on this matter.

 This does have a positive impact upon your state pension. For details of this please see HMRC website or summary on the staff portal.

 

 These changes will not affect the accrued benefits of your pension, or the benefits you build up in the future.

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