Scotland’s transport police could get separate scheme section

The proposed creation of a new scheme section is part of the planned merger of the British Transport Police in Scotland with the eight forces of Police Scotland.

In a Q&A, the Scottish government said that existing members will remain in the BTPFSF, which is linked to the Railways Pension Scheme.

The trustee will not agree to proposals unless it is satisfied that they are in the best interests of the beneficiaries

RPMI trustee

“It is proposed, subject to approval by [the Scottish Police Authority] board and the scheme trustee, existing BTP officers and staff can remain in their existing schemes but will transfer to a new section within the schemes, with SPA becoming the designated employer for these new sections.”

It added that “the benefits will be precisely mirrored in the new sections”.

Officers recruited after the merger with Police Scotland will become members of the Police Pension Scheme 2015, while new staff will be in the Local Government Pension Scheme.

Retired members raised concerns

The implications of the merger created waves when the National Association for Retired British Transport Police Officers heard of a proposal to move members of the scheme to a brand new pension fund.

NARBTPO requested a statutory guarantee that benefits would be protected while members were in what it considered to be a less secure arrangement, citing the fact that the BTPFSF was 101 per cent funded at its 2015 valuation.

It raised concerns over the viability of any new standalone arrangement, which would include just a few hundred members and start out as a mature scheme.

Honorary secretary Martyn Ripley said: “We’re not saying don’t go ahead with the new proposed fund. We are saying if you do it, we want it written into statute… or we want a Crown guarantee.”

However, the Scottish government has said that although a standalone scheme was one of the options, it was just one of many considerations, and was not the proposal ultimately put forward.

A spokesperson said: “The Scottish government has made clear that the jobs, terms and conditions and pensions of transferring officers and staff will be protected, while retired officers will continue to have access to their existing benefits from the scheme.”

RPMI, which administers the £1.2bn BTPFSF, confirmed the trustee has received a proposal from the Scottish government. It added that it will receive legal and actuarial advice before taking decisions.

“The trustee will not agree to proposals unless it is satisfied that they are in the best interests of the beneficiaries,” RPMI said.

Sectionalised industries ‘function more easily’

Those employed by British Rail before 1993 have a right to remain in the RPS, under the Railways Act 1993 and the protected persons regulations, John Hanratty, head of pensions for the north of England at law firm CMS, pointed out.

He said creating a new section is not uncommon within the rail industry and “will provide the member with continuity, so it should be the same as with the previous scheme”.

However, for the scheme and employer, “your costs become more volatile because you’re spreading them over a lower number of members”.

On the upside, any ‘last man standing’ issues would be contained to a section, unlike in non-sectionalised schemes, such as Plumbing Pensions, which can be left with orphan liabilities of an employer no longer able to pay.

For that reason, “these sectionalised industry-wide schemes seem to function somewhat more easily than the unsectionalised ones,” he said.