Friday, 2 November 2018

Re Former Tory's comment on police pensions

From the comments to yesterday's post:

Former Tory: Depends where the money's going. Police people are vastly expensive individuals when you take in the cost of their generous pension scheme, which for some officers has allowed retirement on full defined benefits at 48 (entry 18 + 30 years service).

The current schemes are slightly less generous but funding retirement for someone in their fifties with index linking, widow's benefits, etc etc is colossally expensive, requiring a pension fund significantly into seven figures. Or, indemnifying by the taxpayer.

From here:

Typical retirement income:

A 30 year old police officer on a salary of £30,000 will receive a pension of around £28,000 if he retires at age 60. If he takes the maximum tax free cash at retirement - £120,000 - this will reduce his annual pension to £18,000.

OK, let's ignore inflation increases and discounting and assume thirty years working plus twenty years in retirement. Total lifetime earnings/income = £1,460,000. Divide that by thirty active years = £49,000 a year. That is the real annual salary. As a financial adviser, FT really should be able to do this calculation.

If you think coppers are overpaid at £49,000 a year, then become a copper. That's clearly overpaid if you are just sitting in a cosy office investigating 'hate crimes' on Twitter, and probably 'about right' if you are doing a proper policing job on the streets with all the personal risks and unsociable working hours.


formertory said...

Hmm. Not entirely my point - the figures you've grabbed relate to new police force entrants since 2015 on the new 2015 scheme, which is career average earnings based and has an age 60 Normal Pension Date so the cost of providing the benefits is much lower than the 1987 scheme which provides a Normal Retirement Date of 50 (or 30 years' service). Which of course was the point of starting the new scheme.

As I understand it the existing majority (and so the higher earners) is on the 1987 scheme. It'll still take decades for the costs of the 1987 scheme to be boiled out, although a start's been made with closing it about 10 years ago.

Still, as ever, if I'm wrong I'm happy to be corrected. Being right all the time gets tedious :-)

Mark Wadsworth said...

FT, if you have an example under the old rules, maybe it works out at average salary of £60,000 or £80,000 or whatever if they retire young and live to be 100.

But it's not off the scale, like bankers or footballers or council CEOs.

Shiney said...


"But it's not off the scale, like bankers or footballers or council CEOs."

I don't give sh*t about roundballers or any other sportsperson for that matter because TV rights is what pays 'em and I don't have Sky - as long as they aren't in some joke 'minority sport' that needs funding from the government for us to 'compete' at the olympics or something the who cares (first on the list for cutting when you're in charge should be The Department for Digital, Culture, Media & Sport).

Bankers - well if they didn't get a subsidy via govt guarantees & bailouts, fine, since the shareholders pay.

But you are right - council CEOs plus most of the 'brass at the MOD, all senior servants and the upper echelons of the fake charities and BBC - sack them all now and see if they get hired by the private sector.... then we can ascertain their market value.

Mark Wadsworth said...

Sh, agreed. I was talking amounts, not moralising.

pen seive said...

A police officer used to pay 11 1/2 % of their salary towards their pension. Because of the physical nature of their role (very few sit behind a computer checking up on Twitter hate crimes) they could retire, at 55 years of age, with a pension of half of their salary after 25 years or two thirds of their salary after 30 years. Now, thanks to May, Cameron, and Windsor, they now pay 13 1/2 % towards their pension, have a retirement age of 60, and a pension of half of their salary after 30 years. That percentage of salary is many times more than local or central government employees and 13 1/2 % more than MPs. What proportion of your salary do/did you pay? This level of contribution makes the government's share quite small. I understand that due to government intransigence in the past, current Police pensions are made from contributions from serving officers, with the government making up any shortfall - an understanding of the Edmund Davies review of Police pay and pensions would explain the system before M, C, and W, changed it.
I am a retired Police officer and consider I deserve every penny of the pension I worked for, and contributed to,considering the things I have seen and done in my years of service, with the restrictions also placed upon my private and family life. Restrictions which would not be accepted by any other profession apart from UK Forces. Strike? Not allowed. Take an open and active part in politics? Not allowed. Family time at Christmas or religious festivals? Unless part of the RoP, not guaranteed.
My views of today's Police "service" is irrelevant but no one should criticise the cost to the taxpayer of Police pensions unless are aware of the facts.

Mark Wadsworth said...

PS, thanks, but was that aimed at FT or me? I don’t think coppers are overpaid. And there aren’t enough of them.

pen seive said...

Mark, not 'aimed' at anyone in particular, just fed up of so many people whinging about the "nice, fat, taxpayer funded, pensions" enjoyed by retired Police officers, and felt this was an appropriate occasion to give the other side. I suppose this is my whinge back!