The general issues with police pensions are similar to those of the armed forces.

1.        CETVs are not appropriate valuations for use in divorce

2.        Distorted CETVs means distorted pension share percentages

The age at which an officer is assumed to leave service or retire is particularly important, as it affects when the pension starts and hence its value.

Depending on the retirement age used, the value can more than double for this reason alone. Except in specific cases, it is unlikely to be realistic to argue for the CETV approach in which an officer is deemed to have left service on the valuation date.

The low CETV value also affects the pension share percentage required to meet a specific objective. The adage “a 50% pension share never equals a 50/50 split of the pension” has never been more relevant.

A simple case from our files with one PPS 1987 pension makes the point. The CETV was £285,000. Our valuation, based on retiring with an immediate pension at age 50 was £640,000. The percentage pension share required to equalise income was 70%, or 87% to equalise capital values.

Help is at hand

If instructing on police cases sounds confusing then we can help. We have produced a fact sheet that shows you the effect of different instructions and the factors you should take into account when setting them. We have a similar fact sheet for armed forces pensions. Both are free, just click here to request both factshhets..

 Pension credits from age 60

Unlike the armed forces schemes, which have reduced the age at which pension credit members must take their pension, there have been no such changes to the police schemes. Pension credits must still be taken from age 60, and it is not possible to transfer them out of the scheme to get around this.

There is talk of this changing, but this would strictly require Amendment Orders to the schemes’ primary legislation so it seems unlikely to happen in the near future.

Pay increases versus salary expectations

A general issue, but surprising common on police cases, is querying the future salary expectations we make when producing reports. Normally a reasonable comparison is made between current increases in pay scales - about 2.5% - and our stated assumption of about 5.25%.

The short explanation is that the important figure is the rate of increases above inflation, which is about 2% in each case. It should be recognised that due to promotional increases or payments for extra responsibilities, salaries generally go up faster than increases in pay scales.

We are aware that reports can raise numerous such questions. However, rather covering them all in each report, we are extending our FAQs on our website to help you and your clients answer specific your queries.