Defined Benefit Part

This section explains the benefits payable from the Defined Benefit Part of the Plan that are different from those of the Defined Contribution Part and applies only to participants of the Defined Benefit Part. It should be read in conjunction with Common Features, which describes the features common to both the Defined Benefit Part and the Defined Contribution Part.

Contributions

Whilst an active participant of the Plan, contributions of six percent of your Pensionable Earnings will be deducted from your salary or wages and will be credited to your Participant Contribution Account. The balance in this account will also increase with the addition of Credited Interest each year. Note that Pensionable Earnings is defined as the sum of your monthly basic salary or wage, plus any monthly acting or duty allowances you may receive. The entire remainder of the cost of the Plan will be met by contributions from your employer. At no time will the level of contributions paid into the Plan on your behalf by your employer be less than the contributions you pay yourself.

Accrued Benefit

Your Accrued Benefit is a monthly pension based upon your time in the Plan (Pensionable Service) and your Final Average Pensionable Earnings at the time of the calculation. The formula for calculating your Accrued Benefit is:

Final Average Pensionable Earnings x number of months of Pensionable Service x Accrual Rate

Your Final Average Pensionable Earnings is calculated as your final month's basic salary or wage, plus the average of your last thirty-six months' acting or duty allowances, plus, if you are employed as a police officer, your final month's housing allowance. Your Accrual Rate is 1/600 if you joined the Plan on or before 10 July 1980 or 1/720 if you joined the Plan after that date.

The above formula is restricted to provide a maximum pension of two-thirds of the highest Pensionable Earnings earned by you during any month, but as long as you have at least ten years of qualifying service you will always receive a minimum pension of not less than $400 per month upon retirement.

Example: If your Final Average Pensionable Earnings were $2,000 per month, you had thirty years' Pensionable Service in the Plan and you joined the Plan on or before 10 July 1980, then your Accrued Benefit would be calculated as:

$2,000 multiplied by 360 multiplied by 1/600 = $1,200 per month.

Benefits if you Leave Early

If you leave the Plan early for any other reason (for example if you leave to go to another job) then you will be entitled to a deferred pension, payable when you reach Normal Retirement Age. Your deferred pension will be calculated as your Accrued Benefit based on your Pensionable Service and Final Average Pensionable Earnings at the date you leave employment.

In this event, you will have the following three options:

  • You may wait until you reach your Normal Retirement Age of 60 to receive your full deferred pension with no reduction.
  • If you have more than ten years of qualifying service, you may choose to receive your deferred pension at any time after reaching age 50. However, your pension would then be reduced to allow for the longer period of time over which you are expected to receive it. Note that this reduction will be calculated in accordance with Plan actuarial tables and these reductions may differ from the reductions shown for participants retiring early directly from service; or
  • You may transfer your benefits to the Defined Contribution Part of the Plan or to any other approved plan.

Transfer Value

If you elect to transfer your benefits out of the Defined Benefit Part of the Plan, a Transfer Value will be paid into the Defined Contribution Part or to another approved plan, whichever you choose. This Transfer Value is the lump sum value, calculated in accordance with Plan actuarial tables, of the deferred benefits which would otherwise be paid to you from the Plan, subject to being at least as much as the balance in your Participant Contribution Account. However, some restrictions apply if you want to transfer the value of your benefits out of the Plan altogether.

If the Transfer Value is more than twice the balance in your Participant Contribution Account then the amount transferred to your new approved plan will be restricted to twice this balance. The remainder of the Transfer Value will be credited to an Employer Contribution Account in your name, under the Defined Contribution Part of the Plan.

Example: If your Accrued Benefit at age 40 was $750 and your Participant Contribution Account was $10,000 then when you reach your Normal Retirement Age of 60 you will receive a pension of$750 per month. Your Transfer Value payable at age 40 might be calculated as:

$750 multiplied by 30 = $22,500.

This example assumes that the actuarial factor used to calculate the Transfer Value for a deferred participant aged 40 is 30 in accordance with Plan actuarial tables. You could choose to transfer the entire Transfer Value of $22,500 into the Defined Contribution Part. However, since the Transfer Value is more than twice the amount of your Participant Contribution Account then you could transfer only $20,000 (which equals twice your Participant Contribution Account of$10,000) into another approved plan, with the balance of$2,500 (which equals $22,500 minus $20,000) transferred into the Defined Contribution Part.

Benefits on your Retirement

You can retire from the Plan and start to receive your pension in any of the following situations:

  • When you reach your Normal Retirement Age, age 60. This is called Normal Retirement;

  • When you reach age 50, as long as you have at least ten years of Qualifying Service. This is called Early Retirement;

  • If you become permanently disabled, as certified by the Chief Medical officer, regardless of your age. This is called Disability Retirement; or
    If your office is abolished or if your department is reorganised and you are removed from office, regardless of your age. This is called Special Retirement.

Normal Retirement

Your Normal Retirement benefit is a pension equal to your Accrued Benefit based on all of your Pensionable Service in the Plan and your Final Average Pensionable Earnings at your Normal Retirement Date.

Early Retirement

Your Early Retirement benefit is calculated in a similar way to your Normal Retirement benefit. However, it is based on your Pensionable Service and Final Average Pensionable Earnings up through your actual date of Early Retirement and it will be further reduced if you choose to retire before you reach age 55. This reduction will be calculated in line with the table set out below:

Age Reduction
50 30%
51 24%
52 18%
53 12%
54 6%
55 No reduction

Example: If your Accrued Benefit at age 52 is $1,000 per month and, having at least ten years of Qualifying Service in the Plan you then choose to retire early, your Early Retirement benefit would be calculated as:

$1,000 multiplied by (100% - 18%) = $820 per month.

Disability Retirement

Your Disability Retirement benefit is calculated in a similar way to your Normal Retirement benefit. However, it is based on your Pensionable Service and Final Average Pensionable Earnings up through the actual date of your Disability Retirement although it will never be further reduced, regardless of how young you are when you retire. An additional pension is payable in the event of a Duty-Related Disability – see Common Features.

Special Retirement

Your Special Retirement benefit is calculated in a similar way to your Normal Retirement benefit. However, certain adjustments may apply depending on the exact circumstances of your Special Retirement although the benefit will never be less than will the Early Retirement Benefit available to you at that age, if any.

Other Features

At retirement you will have the option to commute up to 25% of your pension for a lump sum. In addition, your remaining pension will increase each year depending on the level of inflation over the previous year. See Common Features for more information on these features.

Benefits if you Die

Death in Service

Should you die whilst an active participant in the Plan, then a monthly pension equal to one-half of your Accrued Benefit will be paid to your surviving spouse. This pension will continue for the remainder of your spouse's life. If your spouse is younger than age 60 at the time of your death and is more than ten years younger than you, then your spouse's pension will be reduced. This reduction is equal to 0.5% for each complete year that your spouse is more than ten years younger that you are.

In addition to the pension payable to your surviving spouse, pensions equal to one-half of your Accrued Benefit will be equally divided among all your dependent children. (A dependent child is any child under the age of 18, or under age 23 if still in full-time education, or a child that is mentally or physically incapable of employment as certified by the Chief Medical Officer.) If you die leaving dependent children but no surviving spouse, then your dependent children will receive, in addition, the pension that would have been payable to your spouse, shared equally among them.

If the total lump sum value, calculated in accordance with Plan actuarial tables, of the pensions payable to your surviving spouse and dependent children is less than a minimum amount, then the balance will be paid as a lump sum to your designated beneficiary. This minimum amount is the larger of twelve times your Final Average Pensionable Earnings and the balance of your Participant Contribution Account at your death.

An additional pension is payable in the event of a Duty-Related Death – see Common Features.

Death after Retirement

If you die after you have retired and are receiving a pension, a monthly pension equal to one-half of the actual pension being paid to you at the time of your death will continue to be paid to your surviving spouse. This pension will continue for the remainder of your spouse's life. If your spouse is younger than age 60 at the time of your death and is more than ten years younger than you, then your spouse's pension will be reduced as described above.

In addition to the pension payable to your surviving spouse, a pension equal to one-half of the pension you were receiving at the time of your death will be equally divided among your dependent children. If you die leaving dependent children but no surviving spouse, then your dependent children will receive, in addition, the pension that would have been payable to your spouse, shared equally among them.

Option to Transfer to the Defined Contribution Part

At any time, a participant of the Defined Benefit Part may elect to transfer to the Defined Contribution Part. If this election is made, then a Transfer Value will be calculated as described above and the full amount of this Transfer Value will be paid into an account in the Defined Contribution Part. However, it is not possible to transfer back to the Defined Benefit Part from the Defined Contribution Part.