Thirty years plus: retaining officers

Report: 13
Date: 26 July 2001
By: Commissioner

Summary

This paper sets out options for retaining officers with over thirty years of service as a means of reducing police wastage. It is recommended that the MPS seeks to pilot changes to regulations so that more police officers are encouraged to stay beyond thirty years service and that this pilot is reviewed annually so that the effect on the service profile, the take up by officers, and other consequences can be monitored.

A. Recommendation

Members are asked to consider the options contained in this paper and to remit detailed consideration to the Human Resources Committee.

B. Supporting information

1. The MPS intends to have 28,000 serving officers by March 2004, subject to funding. To achieve this the MPS will have to recruit over 2,500 officers this year and for the foreseeable future.

2. The current employment market is challenging, not only because all forces are recruiting officers due to the Crime Fighting Fund initiative, but also because we are operating in a fiercely competitive employment market. The economy is growing and demographic factors are moving against us; in the south east full employment is nearly with us.

3. This recruitment target is based on current wastage levels. If these were to increase the targets would rise beyond what is achievable. Because of this the MPS is focusing on retention and ways in which it can be improved. A group has been set up to look at how the retention of officers can be enhanced. This paper seeks to address one cause of wastage, retirements. Normal retirements have accounted for 33 per cent to 38 per cent of all wastage in the last five years, in other words over 500 officers each year.

4. Clearly officers will retire at some time, but one of the unique aspects of police employment is the manner in which it is structured around a thirty-year career, almost to the exclusion of anything else. The pension is designed to provide for a thirty-year career, and is geared to the latter part of service. Officers contribute 11 per cent of their salary towards the pension scheme. But once thirty years is accrued an officer draws no increased benefits, though they still contribute at the same rate.

5. This makes no financial sense to officers and they in effect work for a relatively small amount of income. This is because an officer can retire on two-thirds their salary after 30 years (with an option to commute a large lump sum and receive a lesser pension.) Whereas if the officer remains in the Service after thirty years, although they will continue to receive a full salary and other allowances such as housing allowance and possibly overtime, the benefit of this is reduced by other costs. These costs include paying 11 per cent pension contributions, higher tax, travel costs etc. In addition, the quality of life issues, the stressful nature of policing add to the social costs incurred by staying in the MPS. The buoyant economy provides many retiring officers with opportunities to find a second career earning an additional income as well as draw a police pension. It must be remembered that many of the officers attaining 30 years are only 49 years old.

6. Existing officers are subject to current pension regulations and any change to these should not disadvantage them. Further the very nature of policing, its stresses, the hours and conditions of work make it a career that for many thirty years is enough. Around 60 per cent of officers do not even attain thirty years. Currently, there are 484 officers with over 30 years service in the MPS, though the figure for 32 years plus reduces to 230. Of these senior officers and detectives are disproportionately represented although constables still make up about 48 per cent of the total number in each category, compared to 76 per cent amongst serving officers.

7. This paper is submitted on the premise that the number of officers remaining after thirty years service could be increased if conditions of service make this option attractive.

8. Working within existing Regulations a scheme recently launched in the West Midlands Police is open to any officer attaining thirty years service. The officer can retire, take their commutation and then immediately rejoin. The officer must rejoin as a constable, and is paid at a highest pay point for that rank. The officer rejoins subject to the conditions applied to post 1994 officers. The reason for this one rank approach is to avoid impact on the promotion prospects of other officers, but as a consequence it must prove to be unattractive to any officer above the rank of constable. The loss of pre 1994 allowances for housing must also detract from the West Midlands scheme. The inflexibility in the ranks, in which officers can rejoin would not allow the service to retain people in key areas, for example detective chief inspector's working as senior investigating officers in murders. In time the Inland Revenue may look at this 'use' of commutation and consider it as part of an officer's income making it liable to income tax.

9. It is the view of the MPS that a more radical option is required which at low cost can make the MPS more attractive to officers in this 'thirty plus' category. The Government may well have an appetite to support changes that address this point. The MPS would seek to pilot such a scheme.

The proposal

10. Officers in the thirty plus category should:

• pay a reduced pension contribution: 1 per cent of pensionable pay. This sum would provide them with all the existing provisions of the pension scheme, eg: death in service benefits, and allow their pension to reflect their final salary
• the officer would also be eligible to receive a lump sum. This would be in anticipation of their commutation and be free of tax. The amount paid would be the same as if the officer was retiring with 30 years service. This would lead to an appropriate reduction in pension payable when the officer actually retires. An officer might take a lesser amount to preserve a higher annual pension. (About 98 per cent of officers take a lump sum on retirement, with 98 per cent taking the maximum sum.)

Eligibility: two of the options under consideration

Option A

11. Any officer who attains thirty pensionable years' service would remain eligible to continue their service, unless their OCU commander, or Assistant Commissioner in the case of Superintendents and above, considered this would not be in the interests of the Service.

12. The OCU Commander/Assistant Commissioner would need to satisfy themselves that the individual was fit enough to remain in the Service. This would be determined by applying the Attendance Management Policy, only in cases of doubt would there be a referral to the Chief Medical Officer.

13. These two conditions would be considered on the officer attaining thirty years service, and on attaining 55 years of age. It is further proposed that the policy of officers having to seek annual extensions from 55 years old would cease, being replaced by the conditions in the above paragraphs.

14. Officers could remain in their current post, subject to the current posting policy and arrangements specific to that post, until they attained the age of 60 years old. An officer in this thirty-year plus category would be subject to all the same conditions of service and opportunities as any other officer.

Option B

15. This scheme would focus on officers who possess certain key competencies, and have delivered those competencies to a high standard.

16. Any officer would be eligible to remain as at present, subject to the current pay and conditions.

17. Additionally, OCU commanders, or Assistant Commissioner in the case of Superintendents would identify individual officers in their commands who demonstrably possess and deliver key competencies that are important if the Service is to effectively police London.

18. Those identified officers would then be encouraged to stay for a fixed period e.g. five years, under the new enhanced pay conditions. The officers would continue in their role through out that period.

19. The officers would need to satisfy the Attendance Management Policy.

20. This scheme has the advantage of focusing the enhanced package at key areas, where the performance of the organisation is critical.

Conclusion

21. The above options would require changes to Police Regulations. It is proposed that the MPS should pilot such a change, so that the level of take up can be monitored and any other consequences examined, for example the effect on ill health retirements, and career progression. Annual reviews need to be set into the implementation plan.

This paper has not been the subject of wide consultation.

C. Financial considerations

The cost per officer of either option:

In the second and subsequent years the costs of the scheme diminish as the newly recruited officer progresses up the pay scales, either by promotion or by annual increments.

In addition to this the costs incurred in recruiting and training a new officer are not incurred. The Crime Fighting Fund provided £8,000 per officer for these expenses. (Initial costs for existing officers with over 30 years service are dealt with below.)

If either option is accepted that there will need to be transitional arrangements put in place for officers who already have attained 30 years service. (It is estimated that under the wider option if all officers in this category took their full lump sum the cost would be about £38million. However, this cost is an existing liability, money that the MPS is already liable to spend over the course of the next few years when those officers chose to retire.)

D. Background papers

None.

E. Contact details

This author of this report Robin Merrett, MPS Personnel Department.

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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