The Police Pensions Regulations 2015 were laid before Parliament on 5 March, and set out the terms of the new Police Pension Scheme including its new governance arrangements. The Regulations will come into force on 1 April 2015.
Local and national boards
The Regulations provide for the creation of two new types of governance bodies:
- A local Police Pension Board, whose role is to “assist” the relevant ‘Scheme Manager’ (normally the Chief Constable) to secure compliance with the Regulations, other legislation relating to the governance and administration of the Scheme, and any requirements imposed by the Pensions Regulator. The Board is also to assist in the performance of the Scheme Manager’s functions under the Regulations
- A national Scheme Advisory Board, the function of which is to provide advice as requested by the Secretary of State on the desirability of making changes to the Scheme, and to provide advice (on request or otherwise) to the Scheme Managers and Police Pension Boards in relation to the effective and efficient administration and management of the Scheme.
Responsibility for establishing a Police Pension Board rests with each Scheme Manager (ie each Chief Constable), and is mandatory, not optional.
In relation to the Scheme Advisory Board, this is directly established by the Regulations themselves.
Both types of boards are required to be established no later than 1 April 2015.
Membership of Police Pension Boards
The Regulations confirm details regarding the required make-up of new Police Pension Boards:
- A chair and a deputy chair appointed by the Scheme Manager. Both have voting rights. The Scheme Manager can appoint an independent chair if it wishes (ie a chair who is neither an employer or member representative). If the chair is not independent then the chair and the deputy chair must alternate their roles at regular intervals. The chair and deputy chair must not both be employer or member representatives. In the event of any tied vote, the chair has a casting vote.
- Between 4 and 12 voting members appointed by the chair, with the Scheme Manager’s approval. Equal numbers of employer and member representatives must be appointed to the Board.
- Up to 4 non-voting independent members appointed by the chair, with the Scheme Manager’s approval.
Before appointing (or approving the appointment) of any Board member, the Scheme Manager must be satisfied that the person has no conflict of interest. This requirement also continues once the person has been appointed. A conflict of interest means a financial or other interest which is likely to prejudice the person's exercise of functions as a member of the Board. However, simply being a member of the Scheme does not create a conflict.
Joint Police Pension Boards
A Police Pension Board can be established to assist multiple Scheme Managers, thus allowing for joint Boards. Joint Boards could be set up on the basis of shared services, geography or common administration. In addition, certain Scheme Managers under the Regulations (including bodies such as the College of Policing, the Disclosure and Barring Service and the Independent Police Complaints Commission) must identify a Board that has already been established by another Scheme Manager to assist them.
Procedures and costs
A Police Pension Board determines its own procedures, subject to approval by the Scheme Manager. We would expect these procedures to be set out in a Terms of Reference document. A Board member holds and vacates office in accordance with the terms of his or her appointment.
The Scheme Manager may pay fees to or in respect of members of a Police Pension Board of such amounts as the Scheme Manager may determine. The Scheme Manager can also reimburse Board members their reasonable expenses incurred in the performance of their duties in relation to the Scheme.
The late arrival of the final Regulations leaves Scheme Managers with a lot of work to do to get their Police Pension Boards in place within a very tight timescale. Boards will require comprehensive governance documentation, including Terms of Reference and various policies relating to ongoing legal duties that apply to Board members, such as whistle-blowing and knowledge and understanding requirements. Appropriate training will also need to be put in place for Board members.