Police Pension Scheme Revaluation


The Police Pension scheme is an unfunded scheme not backed by assets and pensions are funded via a combination of employer and employee contributions and tax receipts.

HM Treasury (HMT) undertake valuations of the public service pension schemes every four years to ensure that the full costs of the schemes are understood by the Government. This is the first time that a full assessment of the pension schemes has been undertaken since the Government introduced the new pension scheme of governance including local pension boards in 2015.

HMT use the Government Actuary Department (GAD) to complete the valuation. GAD has completed their April 2019 – March 2023 valuation and a draft Direction has been issued by the Treasury.

The draft Direction published in September is proposing a significant increase in employer contributions of 9.7% adding an additional cost of up to £417m each year to policing budgets in England and Wales. HMT has agreed to provide some relief in 2019/20 to which Policing bodies will need to meet an additional cost of £165m but no additional resources have been provided for future years. Funding for the £417m is being sought as part of the Spending Review bid currently being developed jointly with Home Office, The Association of Police & Crime Commissioners and the National Police Chiefs Council but no such mechanism exists to seek additional funding for 2019/20.

For Sussex this increase could result in an additional £3.2m for 2019/20 and up to £8.1m per year for the following three years.

Representations have been made nationally to the Chief Secretary of the Treasury, Ministers and Home Office setting out concerns, as well as national media releases. I have also briefed Sussex MP’s on the issue and sought their support to encourage HM Treasury to mitigate the impact through additional funding.

This issue, along with other budget pressures such as potential pay rises and other unavoidable cost pressures, will require my careful consideration as I update my Medium Term Financial Strategy and precept proposal for 2019/20.

The written statement on the valuation from Elizabeth Truss (The Chief Secretary to the Treasury) can be found here: https://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-09-06/HCWS945/

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