Police Pension Scheme Leave of Absence Form Completion Notes
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1 Police Pension Scheme 2015 Leave of Absence Form Completion Notes February 2017
2 Rate of Member Contributions: An active member of the scheme must pay pension contributions to this scheme based on their annualised pensionable earnings, with the appropriate percentage contribution rate applying for those earnings. The contributions rates for each scheme year from 1 April 2015 to 31 March 2019 are as follows: Ordinary Members Members ineligible for ill-health retirement benefits Total Officer Contributions Tier % 9.94% Total Officer Contributions Tier % 10.94% Total Officer Contributions Tier % 11.28% Annualised Rate of Pensionable Earnings: Where a member s pensionable earnings for a scheme year are payable to the member in 12 instalments, the member s annualised rate of pensionable earnings is calculated as 12 x pay, rounded down to the nearest whole pound. Where the pay period is other than 12 instalments, the member s annualised rate of pensionable earnings is calculated as follows, rounded down to the nearest whole pound: P x (365 / N) Where: P is the amount of a member s pensionable earnings; and N is the number of days in the relevant pay period. If the scheme year in which the payment of pensionable earnings is made includes 29 th February, you must substitute 365 with 366. Assumed Pay: An active member of this scheme can be treated as receiving Assumed Pay during periods of reduced or nil pay where the member: Is on reduced pay while on sick leave, paid adoption leave, paid maternity leave, paid parental leave, paid maternity support leave, or paid adoption support leave; Is receiving statutory pay; Is on unpaid maternity leave during the first 26 weeks of maternity leave; Is absent from duty because of being called out or recalled for permanent service in Her Majesty s Armed Forces in pursuance of a call-out notice service or a call-out or recall order made, under the Reserve Forces Act 1996; The member voluntarily surrenders pensionable earnings in whole or in part. Where it applies, Assumed Pay ensures the member s pension isn t detrimentally affected during periods of reduced or nil pay, as it represents the sum of: 2 P a g e
3 The amount of pensionable earnings that the member would have received in respect of the period of Assumed Pay had the circumstances listed below not applied; and Any increase the scheme manager considers appropriate. Circumstances where Assumed Pay should automatically apply and the impact on the member s contributions: Where the member is on reduced pay (due to sickness or child-related leave), the member s usual contribution percentage rate should be applied against actual pay received. During the first 26 weeks of maternity leave, where the officer is on nil pay and not receiving SMP, the member will pay no contributions but will be credited with Assumed Pay during that period of absence. Where the member is absent because of being called / recalled under the Armed Forces Act 1996, they will be regarded as receiving Assumed Pay in PPS 2015 unless they become a member of either the Armed Forces Pension Scheme, or another occupational pension scheme, during the period. Where membership of PPS 2015 continues for members on Reserve Forces leave, they will continue to contribute on the lower of their Reserve Forces pay or their police rate of pay received at the point of call-up. In each case, the employer will continue to pay contributions on the member s annualised pay ignoring any reduction. Circumstances where Assumed Pay applies if the member opts to pay contributions for a period of unpaid leave: Where an active member of the scheme returns from a period of: Unpaid adoption leave; Unpaid maternity leave; Unpaid parental leave; Unpaid maternity support leave; Unpaid adoption support leave; or Unpaid sick leave*. they must be given the option to pay contributions, based on the Assumed Pay calculated for the absence period. The Assumed Pay should be the pay the officer would have received, had the unpaid absence not occurred, ignoring any reduction in pay prior to the unpaid period of absence. It is the scheme manager s responsibility to calculate the contributions payable and notify the member. There is a Leave of Absence form available for this purpose. The option to repay contributions for a period of unpaid leave MUST be made by the earlier of: The end of the 3 months period beginning with the day the member returns to work; and The member s last day of pensionable service. * Please be aware that absences relating to unpaid sick leave can only be bought back if: Each period of unpaid sick leave does not exceed 6 months; and The total period of unpaid sick leave does not exceed 12 months. In addition, please note that absences due to career breaks cannot be reinstated. 3 P a g e
4 For the purposes of calculating the amount of contributions payable, the annual rate of the member s contributions is taken to be the rate (as shown in the table above) that applied at the beginning of the period of unpaid leave. The member must repay the full amount of contributions within 6 months of receiving the notification from the scheme manager of how much is due to cover the period of unpaid leave. If the member leaves service before the end of the 6 month period, they must pay the outstanding contributions within 2 months after leaving, providing this still falls within the initial 6 month payment period. The amount may be paid by either lump sum or by instalments deducted from the member s pay. If the full amount has not been paid by the end of the payment period, the unpaid leave must be pro-rated to take into account only those contributions that have been repaid. The full amount is taken to have been paid if: The member dies within the payment period; or The member dies before the end of the 3 month period beginning with the day on which the member returns to work, and before giving notice to the scheme manager to repay the contributions. Employer Contributions for a period of Unpaid Leave: Employer contributions remain at a rate of 21.3% of the member s annualised rate of pensionable earnings, whether or not the member pays the due contribution to reinstate their pension following unpaid leave. How to calculate contributions for periods of Unpaid Leave and complete the Employer s section of the Leave of Absence Form (for PPS 2015): Please confirm the officer s details by providing: Surname First Name(s) Rank Date of Birth NI Number Payroll Number Address and Postcode We will then need to know the reason for the unpaid absence (to ensure it is a qualifying period that can be bought back; as previously stated, restoring pension entitlements for a career break cannot be done). The actual period must then be disclosed on the form (from the first day of unpaid leave to the final day, inclusive). You must first determine the amount of Assumed Pay during the period of unpaid leave; this is the pay the member would have received during the period of unpaid absence, ignoring any reduction in pay the member may have suffered prior to the unpaid absence. 4 P a g e
5 Once you know the amount of Assumed Pay the member would have received during the period of absence (based on the annualised rate of pensionable earnings immediately before the absence), you then perform the following calculation to find out the pension that the member would have accrued during that period: Assumed pay during the unpaid period of absence / 55.3* = Lost Pension * where 55.3 is the accrual rate in PPS The cost of buying back this lost pension can be calculated by taking the Assumed Pay for the unpaid period, and multiplying this by the contribution rate (as shown in the table on page 3) as follows: Assumed Pay during the unpaid period of absence x member s contribution % = Total Contributions due from member Should the member wish to pay this in instalments rather than as a lump sum you must calculate the cost of each instalment. The maximum number of instalments is 6. Total Contributions to be Repaid / 6 [or other instalment] = Monthly Cost to Repay Contributions The form must then be authorised by an individual we recognise as an authorised signatory once the officer has indicated their wishes (and confirmed how they wish to pay the contributions due) and returned the form to you. 5 P a g e
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