Pension Scheme Sanction Charge - Message from the MPS

Met Officers who have retired from the 1987 Police Pension Scheme since May 2014, may have had an additional tax deduction, the ‘Scheme Sanction Charge’ (SSC), on top of the ‘Unauthorised payment’ tax charge, deducted from their lump sum if they chose the Maximum taxable lump sum option. 

 

When the SSC was introduced there were differing views amongst the Police forces in England & Wales as to whether the officer should bear the SSC or if this should be borne by the force, i.e. ‘the pension scheme’. There was no consistent approach among forces at that time. As a result however, of further representations and discussion on this topic the MPS have now taken legal advice and have accepted the key points which were that: 

• The MPS should cease charging the SSC to retiring officers and going forward bear the cost itself as ‘the pension scheme’. The deduction of the SSC from retiring officer’s lump sums has therefore ceased from 1 October 2023. and 

• The MPS should reimburse all those officers who have been charged the SSC between 2014 and September 2023. 

 

The MPS is working closely with Equiniti/SSCL to identify those officers who have been affected and are hoping to arrange refund payments, including appropriate interest, during the coming financial year (April 2024 to March 2025). We apologise to members for any inconvenience caused by the delay in the processing of these cases, but the work required to implement the complex provisions of the public sector McCloud remedy, must take precedent. As this project progresses, affected members will be written to individually by Equiniti with details of amounts and payment timescales. 

 

We will continue to provide updates and the time-tabling of this exercise via NARPO and would be grateful if members did not contact Equiniti at this time, as this will add to work involved and cause further delays in completing this exercise. 

 

More detailed information about the provision of the SSC, can be found at Pension schemes and unauthorised payments - GOV.UK (www.gov.uk) 

 

MPS Pensions Team