UK - The Scottish government has confirmed it will pay an additional £20m (€23.4m) to fund the cost of backdating police pension commutation arrangements to 1 December 2006 following the results of a judicial review.

New commutation tables for the calculation of the lump sum that members of police and fire service schemes can receive, in return for giving up part of their pension, came into effect in July 2008 but was also applied retrospectively to members retiring after 1 October 2007.

However, because the new tables take into account increased life expectancy, which means higher payments and higher costs, there was confusion as to how the extra costs would be covered, as the UK government announced only services in England and Wales would receive additional funding.

In September 2008, the Scottish Executive confirmed it would pay £32m to backdate the changes to 1 October 2007, and said it would ensure the police and fire service boards would have enough resources to meet extra costs in 2008/09. (See earlier IPE article: Scotland to pay police and fire pensions' changes)

But in August 2008 the Police Federation of England and Wales launched a judicial review in to the date of the backdating of the changes, as the new commutation tables were initially proposed by the Government Actuary's Department (GAD) in December 2006.

The findings of the judicial review were published in March 2009 with the decision that the backdating of the new calculations should apply to members retiring on or after 1 December 2006.

Kenny MacAskill, justice secretary, confirmed the Scottish government would provide £20m on top of the £32.8m announced in September for 2008-09 costs and £22.3m for costs in 2009-10, as it is the "right and proper thing to do".

MacAskill said: "The Scottish government recognises the important role our police officers play in making our country safer and stronger. Unfortunately, the UK government is not prepared to meet the costs as they did south of the border. However, this government is not prepared to let these men and women who have served our communities lose out."

Calum Steele, general secretary of the Scottish Police Federation (SPF), said: "The slight delay was unfortunate but I understand the critical importance of addressing a funding question whose origins lie in 2006. HM Treasury should be providing funds for Scotland to meet these costs as it did for England and Wales."

Meanwhile, the Scottish government confirmed "further consideration" is being given to how the judicial review decision affects the fire service pension scheme, but suggested an announcement would be made "shortly", and once finalised the Executive would "provide the funding necessary to meet any agreed backdating for firefighter lump sums".

Scottish police pensions are managed individually by regional forces however the issue of a centralised scheme was raised in January 2008 after Grampian police force admitted a £1.1bn deficit had to be 50% funded from its overall policing budget. (See earlier IPE article: Police push for centralised scheme)

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