Ill-health retirement

McCloud Remedy and the Ill Health Underpin

IODPA Admin Home Office, Ill-health retirement, National Police Chiefs' Council 1 Comment
McCloud Remedy and the Ill Health Underpin

IODPA Briefing Note No. 1

McCloud Remedy, the Ill Health Underpin and Unexpected Pension “Debts” – What is Going On?

Over recent weeks the Injury on Duty Pensioners Association (IODPA) has been contacted by an increasing number of members who have received their Remedial Service Statement (RSS) following implementation of the McCloud Remedy.

Whilst many members expected the RSS simply to explain the financial consequences of choosing between their Legacy and Reformed pension benefits for the Remedy Period, a number have instead been shocked to discover that the figures suggest they owe substantial sums of money.

In one recent case, the member was presented with two options:

  • Option 1 (Legacy): a net amount allegedly owed of more than £13,700.
  • Option 2 (Reformed): a lesser amount of £776 allegedly owed under the second option.

For many retired officers these are life-changing sums.

The purpose of this article is to explain why this appears to be happening and why IODPA believes there are important questions that require answers before members can make informed decisions.

Background – The McCloud Remedy

Most readers will already be familiar with the McCloud litigation.

Following the decisions in McCloud and Sargeant, the Government accepted that the transitional arrangements which moved officers into the Police Pension Regulations 2015 discriminated on the grounds of age.

Parliament subsequently introduced legislation allowing affected members to choose whether, during the Remedy Period, they should receive benefits under the Legacy Scheme or the Reformed (2015) Scheme.

Throughout the Remedy process, Government repeatedly reassured members that nobody would be disadvantaged by simply exercising their statutory choice between the available Remedy options.

The purpose of the RSS is to enable members to make that informed choice.

A Separate Issue – The Ill Health Underpin

Unfortunately, another issue has emerged entirely independently of the McCloud Remedy.

For certain officers who retired on ill-health grounds as transitional members, the Police Pension Regulations 2015 require the “Ill Health Underpin” to be calculated using pensionable pay at the member’s closing date, rather than their final salary at retirement.

The NPCC Technical Guidance explains that, following a review, it became apparent that the original Home Office administrative guidance issued in 2015 did not correctly reflect the legislation.

The Guidance states:

“The Home Office drafted the administration guide and unfortunately the examples in this guide did not adequately reflect the use of the salary at closing date as set out in legislation… Administrators were relying on this guide rather than following the legislation…”

This is an important point.

The NPCC guidance recognises that pension administrators relied upon official Home Office guidance which has subsequently been acknowledged to be inaccurate.

There is no suggestion that affected pensioners contributed to the error or could reasonably have identified it.

Correcting the Underpin

The NPCC Guidance makes clear that pensions must now be recalculated using the correct methodology and that future pension payments must be corrected.

IODPA does not dispute that pensions should be calculated in accordance with the legislation.

However, correcting future payments is only part of the picture.

The more difficult question concerns what should happen where the correction reveals that a pensioner has historically received more than they would have received had the legislation been applied correctly from the outset.

Paragraph 33 – A Significant Part of the Guidance

Paragraph 33 of the NPCC Technical Guidance addresses this situation.

It states that where a member has been overpaid:

“…the Home Office have confirmed that it would be their expectations that forces would comply with the Managing Public Money… principles, in particular Annex 4.10 Losses and write offs and Annex 4.11 Overpayments. However, the pension will need to be corrected going forward.”

IODPA considers this wording to be important.

The Guidance does not simply refer to overpayments.

It also directs attention to the Government’s guidance concerning losses and write-offs.

That appears to recognise that, whilst future pensions must be corrected, the treatment of historic overpayments requires the exercise of judgment rather than an automatic assumption that every historic payment must necessarily be recovered.

The Position Where an Injury Pension Is Also Paid

The NPCC Guidance goes further.

For members who also receive an injury pension, the Guidance states that the expected approach is for the scheme manager to write off the overpayment, correct future payments, and effectively “draw a line” under the historic position without recovery.

Again, this demonstrates that the Guidance itself recognises circumstances in which historic overpayments may appropriately be written off rather than recovered.

Where IODPA Has Concerns

The concerns currently being raised with IODPA are not about whether pensions should be recalculated correctly.

The concerns relate to how those recalculations are being presented within the Remedial Service Statements.

Members are receiving RSSs which appear to combine:

  • the financial consequences of their McCloud Remedy election;
  • the corrected Ill Health Underpin calculations;
  • adjustments to pension;
  • adjustments to lump sums; and
  • adjustments to injury pensions,

before producing a single net figure.

However, the documentation currently being provided does not explain how those figures have been derived.

Members are not provided with the underlying calculations.

As a result, many pensioners are unable to determine:

  • what part of the figures arises from their McCloud Remedy choice;
  • what part arises from correcting the Ill Health Underpin;
  • whether any historic overpayments have already been incorporated into the calculations; or
  • how the final figures have been reached.

For many members, the RSS simply presents the final answer without showing the working.

Can Members Make an Informed Choice?

This raises an obvious question.

The purpose of the RSS is to allow members to make an informed statutory election between the Legacy and Reformed schemes.

If members cannot understand how the figures have been calculated, can they genuinely make an informed choice?

IODPA believes that members should be provided with sufficient information to understand:

  • the methodology used;
  • the calculations performed; and
  • the basis upon which the figures within the RSS have been produced.

An Issue Requiring Clarification

At present, it is not clear to IODPA whether:

  • the McCloud Remedy calculations and the Ill Health Underpin recalculations have been treated as two distinct exercises; or
  • whether they have effectively been combined into a single financial exercise before the RSS is issued.

Similarly, it is not yet clear whether any historic overpayments have already been assumed to be recoverable before consideration has been given to the principles referred to in paragraph 33 of the NPCC Technical Guidance.

These are questions which require clarification rather than assumptions.

IODPA has therefore begun seeking further information regarding the methodology adopted in preparing these statements.

What Should Members Do?

Members should not ignore correspondence relating to their RSS.

However, equally, members should not feel pressured into making an election or agreeing to repayment arrangements before they understand how the figures have been derived.

If you have received an RSS which you do not understand, you should consider requesting:

  • the methodology used to prepare your statement;
  • the calculations supporting the figures shown;
  • an explanation of how the Ill Health Underpin recalculation has been incorporated into the RSS; and
  • clarification regarding any alleged historic overpayments.

Where appropriate, members may also wish to ask that the election period and any recovery action are suspended until sufficient information has been provided to enable an informed decision to be made.

How Can Members Help?

IODPA is attempting to establish whether the same methodology is being applied consistently across all police forces and pension administrators.

If you have received a Remedial Service Statement that includes an Ill Health Underpin recalculation, and both option 1 and option 2 are worse then your current position, we would be grateful if you would send us a copy together with any accompanying correspondence.

The more examples we receive, the better placed we will be to identify whether this is an isolated issue or whether there is a nationally consistent approach requiring clarification.

As always, IODPA will continue to keep members informed as further information becomes available.

Merseyside – Medical Retirement Officer

IODPA Admin Ill-health retirement, Review
Merseyside – Medical Retirement Officer

One of our members recently brought our attention to a job opportunity for Merseyside Police entitled ‘Medical Retirement Officer‘ which attracts a salary between £36,996 and £43,098.

This position was recently posted on their jobs portal (https://jobs.merseyside.police.uk/jobs/#en/sites/CX) a copy of which we have posted below.

There should be nothing unusual about a position such as this I hear you say, but the devil is in the detail.

The introduction says that the team you’ll be working with are a kind, ambitious and diverse team. That’s great to hear, when there is so little empathy and understanding over ill-health and injured officers, a kind person to help administer ill-health and injury pensions is in short supply.

Let’s have a look at some of the requirements from the job description.

To manage the investigation and process of police and staff retirement on the grounds of ill health.

Now that’s a strange requirement to manage the investigation? If an officer has suffered ill-health or an injury on duty, what sort of investigation do they anticipate is needed?

To ensure maximum savings to the force budget through the robust investigation of injury award applications, injury award reviews, medical appeals and reviewing permanently disabled officers who have been retained in service.

So we’ve only had to wait until the second paragraph for the force to show its hand. They are clearly not after an employee that will administer the Police Pension Regulations 2015 (PPR), or The Police (Injury Benefit) Regulations 2006 (PIBR) without fear or favour, they want someone to that will save the force as much money as they can regardless of the entitlement or consequences to their officers or pensioners.

Let’s break that sentence down into more detail.

the robust investigation of injury award applications

They require that applications be robustly investigated. What do they mean by investigated, and robustly at that? If an officer has suffered an injury whilst on duty, almost certainly the force would have been aware of it. The question of disability, permanency, whether it was ‘on duty’ and the level of disablement is a medical one and one which MUST be referred to the Selected Medical Practitioner (SMP).

the robust investigation of … injury award reviews

What part of injury reviews does Merseyside Police anticipate will require an investigation? The Medical Retirement Officer is NOT entitled to see any medical information that may be required by the SMP, so what are they investigating?

the robust investigation of … medical appeals

Again, there can only be limited involvement of the Medical Retirement Officer as they are not entitled to see any medical information supplied to the Police Medical Appeal Board (PMAB)

reviewing permanently disabled officers who have been retained in service

A disabled officer that’s been retained will have deemed to have been permanently disabled (until normal retirement age) by a SMP. What do Merseyside Police expect their Medical Retirement Officer to review?

Under the section entitled knowledge and experience –

Knowledge of the Police Pension Regulations and legal precedents are essential, along with associated Home Office guidance relating to issues of pension and injury award.

We’d certainly agree that such an applicant would need to have a good a knowledge of the regulations and case law, but we’re struggling to understand what Home Office guidance they are referring to considering that the Home Office withdrew their Police Medical Appeal Board guidance on 1st September 2022?

A good knowledge of investigative procedures and Force information / intelligence systems

Again, there is a requirement for an investigator and the use of force intelligence systems. What information is held on their force intelligence systems that relate their own officers or pensioners?

Knowledge and understanding of the Regulation of Investigatory Powers Act 2000 with regards to surveillance and investigation of officers and pensioners believed to be falsely claiming compensation.

So there we have it, this role entitled ‘Medical Retirement Officer’ is not really an administrative role, but one designed to spy and investigate it’s own staff and pensioners. It seems as though every injured officer should be aware that they may have someone reading all their social media posts, going through their rubbish, and filming them whilst out shopping!

Analytical skills are required in respect of the calculations of compensation for injury awards and the assessment of earnings capacity in line with Home office guidance.

Now we really have a problem, because the process of determining the loss of earning capacity under the PIBR is a medical one, not one that a civilian should be getting involved in and if they do, it is likely that they will be acting unlawfully in the process. They should play no part in any calculations that relate to injury pensions.

Ability to display tact, sensitivity, confidentiality and diplomacy with individuals who have genuine concerns for their futures, including financial concerns.

Again, we don’t fall out with this sentiment but read on…

A high level of persuasiveness, assertiveness and negotiating skills is required when dealing with matters relating to all aspects of ill-health retirement.

Hang on a minute, why would the role need a high level of persuasiveness? Who needs persuading? What do they need persuading about, not to make a claim, to drop their claim, to agree to a lessor claim?

Assertiveness

Is this another expression for brow-beating a vulnerable individual to agree to something?

Negotiating skills

What is that needs negotiating? The job description has already stated that the application needs to understand the PPR 2015 and the PIBR. There is no negotiating needed. All they need to do is to follow the legislation and current case law.

Decision making skills are required when entering into negotiations regarding continuance of medical appeals, reduction or increase of an officers injury benefit and making recommendations if a member of staff should be retired or not.

Wow! negotiations regarding continuance of medical appeals. This implies more and potentially unlawful pressure on individuals with protected characteristics to drop their medical appeal which they are entitled to do under the regulations

reduction or increase of an officers injury benefit

This requirement is also worrying. Regulation 37(1) of the PIBR determines whether a pensioner’s injury pension is increased or decreased, and this is after the medical determination of a SMP. It is not the role of a medical retirement officer to interfere in this process.

This job vacancy within Merseyside Police, causes us a great deal of concern on how this force will continue to deal with their injured officers and pensioners. We always knew that those leaving this force faced a difficult process due to the individuals involved previously. However, from this advertisement, it now becomes clear why these officers/ pensioners were treated as such. It was all in their job description!