Police Pension Commutation - Pensions Ombudsman Determination (MILNE)

The Board is familiar with the legal case of Mr Milne. This case concerned a Scottish fire-fighter called Mr Milne who retired in 2005. Mr Milne alleged, in his complaint to the Pensions Ombudsman, that the Government Actuary’s Department (GAD) should have revised the tables of commutation factors in his pension scheme earlier than they actually did in August 2006, and that he should have received a higher lump sum payment on retirement as a result.

Commutation is the act of exchanging part of an annual pension for a tax free lump sum at retirement. A High Court case in 2009 established that GAD has a statutory obligation to keep the older police and fire-fighter commutation factors under review, and publish new tables as and when appropriate.

The commutation factors had previously been revised in 1998, and were next reviewed in 2006. The Pensions Ombudsman has found, in his Final Determination, that GAD had a statutory duty to revise the tables prior to 2006, and that GAD is best placed to advise on when these reviews should have taken place.

The Pensions Ombudsman’s Final Determination, can be viewed here:  The Determination has a direct read-across to the Police Pension Scheme which revised its commutation factors slightly later than the Fire-fighters’ Pension Scheme, on 1st December 2006.

The UK Government has accepted the Pensions Ombudsman’s Determination in full and the payments due to Mr. Milne have been made by GAD. The Minister of Justice agreed to deploy the outcome of this Determination to Police Pension Schemes in Northern Ireland. Police Pension Schemes across the UK are working to identify any individuals affected by this decision and on receipt of final guidance from GAD will calculate the sums owed. Please note that given the volume of cases involved it will take time.

The reconstructed factors are lower than the commutation factors that applied on retirement for some female members of the police pension schemes so there will be no shortfall and no redress payable. GAD have provided a note to explain where these circumstances apply, available here.

PSNI Pensions Branch will contact officers who are affected by this decision in due course in relation to any payment that is due. Any future enquiries should be directed to PSNI Pensions Branch at pensions@psni.police.uk.