A former police officer who believed her pension would be payable at age 55 discovered at the last minute that it would not be available until age 60. The discrepancy arose from conflicting information within her pension statements and the intricate rules of the Police Pension Scheme.
The officer joined the police in 1999, at which time her retirement age for the police pension was 55. She left the service in 2011, and her pension became deferred. Throughout this period, her pension statements consistently indicated that the pension would be payable in 2027, when she turned 55. However, upon requesting an updated statement, the scheme identified an error on their side, stating the pension would now be payable at age 60. This change significantly impacted her financial planning, as she had planned to use her lump sum to pay off her mortgage and a loan taken out with her husband.
Former Pensions Minister Steve Webb, writing as an Agony Uncle for This Is Money, commented on the situation, calling the repeated error on fundamental information "shocking." While acknowledging the distress caused, Webb explained that forcing the scheme to pay the pension at age 55 would breach the scheme's rules and governing regulations.
Public sector pension schemes, like the Police Pension Scheme, often have multiple sections due to reforms over the years. The Police Pension Scheme has three main sections: the 1987 scheme, the 2006 scheme, and the 2015 scheme. The rules for drawing a pension can differ between these sections and even between 'active' members who retire from service and 'deferred' members who left before retirement age.
In this specific case, under the 1987 section, deferred members who left the police service before retirement age and with less than 25 years of service can only draw their pension at age 60, unlike active members with 30 years of service who might receive a pension earlier. Webb noted that while the cover page of the officer's statements indicated a pension age of 55 in 2027, a later section stated age 60 in 2032.
The scheme administrators, XPS Group, accepted an administrative error, apologized for the inconvenience, and offered a £200 goodwill payment for distress and inconvenience. The officer is considering whether to accept this offer or escalate her complaint to the Pensions Ombudsman. The Ombudsman can award higher figures for distress and inconvenience, ranging from £500 to £2,000 or more, but cases can take up to a year to resolve with no guarantee of a better outcome.