Your responsibilities when staff join

Contents

4.1 Your responsibilities when staff join

Identifying eligibility to join the CSP arrangements
Who is eligible for a pension?
Definition of ‘employee’
'New entrants' and 'rejoiners'
No more than 28 days’ break between CSP employments
More than 28 days and under 6 months’ break between CSP employments
Breaks between CSP employments of more than 6 months but less than 5 years
Breaks between CSP employments of 5 years or more
Exceptions to new entrants and rejoiners
Helping you decide pension choices for new entrants and rejoiners
Actions once eligibility has been established
partnership rejoiners, rejoining within 28 days
Letter of appointment (LOA) text
Starter Packs
Ordering Starter Packs
Dealing with PensionChoices forms
Receiving PensionChoices forms after the 3 month decision period
At-a-glance Employer Actions tables
New entrants deciding not to join or deciding to opt out
Other things you need to know
Rejoiners who have an upper-tier ill health pension
Rejoiners who have had a break in service of 28 days or less
Compensation payments
Joining past service with new service
Pensioners re-employed immediately upon retirement
Transferring pension benefits into the CSP arrangements
Processing partnership applications

4.2 Your responsibilities when staff join partnership

Introduction
Employer actions
Actions for employer and payroll
Employers’ regulatory responsibility
Policy start dates
Cooling off’ period
Sporadic earnings
Extending the 3 month deadline for new entrants
Unscrambling
Contribution Equivalent Premium (CEP)
Employee leaves, having chosen partnership, before employer action is completed.
Member wishes to transfer other pension benefits into their partnership account
Ongoing payroll action

4.3 Your responsibilities when re-employing pensioners and CSP13

Introduction
Appointment actions
Completing the CSP13 (Estimate) and CSP13 forms
Ongoing action
Resignation
Capita (Pensioner Payroll) action

4.4 Your responsibilities under Automatic Enrolment

What do I need to do?
Additional Information Non-Civil Service employers
Employees with a Partnership Pension Account
Lifetime Allowance and Fixed Protection
Members with preserved awards
One-person schemes
Employees transferred in from another PCSPS employer
Revised OGD transfer form (OGDTF1)
Re-enrolment of people who opt out before age 22 and/or whilst earning below the specified minimum
Action at three year re-enrolment date (Anniversary date)
Revised opt out process
Additional information for employers to refer employees to following automatic enrolment
Letters and starter packs

Annexes

Annex 4A - Pension Choices table for Rejoiners from classic, classic plus or premium
Annex 4B - Text for letters of appointment
Annex 4C - New entrant and rejoiner processes
Annex 4D - Casuals/FTAs employed after 30 July 2007 and whose contracts are subsequently renewed
Annex 4E - Calculating partnership contributions
Annex 4F - Web based scheduling - Originally issued as EPN207
Annex 4G - Partial Retirement Guidance
Annex 4H - Partnership pension account status codes
CSP16 Form

Identifying eligibility to join the CSP arrangements

4.1.1 As a general rule, the majority of your employees will be eligible to join the Civil Service pension (CSP) arrangements. This section tells you about:

  • who is and isn’t eligible to join
  • the choices available to employees, according to their employment status, and
  • the actions you need to take and your duty of care when staff join your organisation.

4.1.2 This section does not cover compulsory transfers of staff as there are different eligibility rules concerning pension provision. If you are thinking of undertaking a compulsory transfer exercise, you must get in touch with your MyCSP Service Delivery Manager in the first instance. For further information on transfers please see section 12 of the EPG.

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Who is eligible for a pension?

4.1.3 The CSP arrangements are open to all employees of the Civil Service and organisations listed in Schedule 1 of the Superannuation Act 1972, with the following exceptions:

  • people engaged locally overseas
  • inward secondees from a non-CSP employer
  • people who belong to another registered pension scheme to which you (as employer) contribute
  • people whose terms of employment exclude them from membership of the scheme;

[Please note: for Civil Service employers, all appointments need not comply with the Civil Service Commission Recruitment Principles. See civilservicecommission.independent.gov.uk/civil-service-recruitment/]

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Definition of ‘employee’

4.1.4 By ‘employee’, we mean a person engaged on a contract of service. You should obtain your own legal advice to determine whether or not an individual is an ‘employee.’

4.1.5 Where someone is not an employee, for the avoidance of doubt you should specify in their contract that they are not covered by the pension arrangements.

4.1.6 You should note that just because someone is treated as an employee for tax and national insurance purposes it does not necessarily mean that they are employed on a contract of service and therefore entitled to a Civil Service pension.

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‘New entrants’ and ‘rejoiners’

4.1.7 We use the term ‘new entrant’ to define someone who is starting work for a CSP employer for the first time and, depending on their ‘employee status’, is eligible for a Civil Service pension. Whether the employee works full or part-time is immaterial.

4.1.8 We use the term ‘rejoiner’ to define someone who has been a member of the CSP arrangements before. This includes individuals:

  • joining your organisation (either with or without a preserved pension for earlier service), or
  • joining your organisation and who are receiving a Civil Service pension or have received some form of compensation from their previous CSP employer.

4.1.9 There is no minimum or maximum age for members joining the CSP arrangements. However, members of the PCSPS schemes must take their benefits before their 75th birthday. This does not apply to members of alpha.

4.1.10 New entrants with no recent public sector pension history (from 1 April 2015) have a choice of joining alpha or opening a partnership pension account. (See Section 3 for details on the schemes available). Members joining from a recent period of public sector employment may not be eligible for alpha: instead they may join nuvos or premium subject to their age (their years to their NPA) and their pension history.

4.1.11 Rejoiners may have different choices. These will depend on the:

  • the length of break since they were last employed by a CSP employer,
  • the reason they left, and
  • whether or not they are receiving their pension.

4.1.12 The general position is as follows. There are exceptions to new entrants and rejoiners but we will tell you about these later. (See table 1 and paragraph 4.1.53 onwards).

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Members eligibility for alpha

After 1 April 2015 most new entrants and rejoiners will be entered into alpha when they start.

However, some members will be eligible to join (or rejoin) the PCSPS, so a series of checks must be completed.

See 4.1.73 for more information.

There is more information available about eligibility, and enrolling members into alpha here.

No more than 28 days’ break between CSP employments

4.1.13 Rejoiners who have not taken their pension or received compensation and who have had a break in CSP employment of 28 days or less will return to the scheme they were in with their previous CSP employer. Members who have received compensation on leaving will have their compensation cancelled on rejoining and their service will be classed as continuous. The member must pay back the full amount of compensation. See further information on rejoiners in paragraph 4.1.53 onwards. If a member becomes eligible for alpha, they will be moved into that scheme.

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More than 28 days and under 6 months’ break between CSP employments

4.1.14 Most rejoiners who return after a break of 28 days or more but less than 6 months will be eligible to join either nuvos or partnership. However, those who resigned from their previous CSP employment or came to an end of a fixed term appointment, having qualified for a classic, classic plus or premium pension, and who are not yet receiving their pension, will have a choice of premium or partnership. They will not be able to join nuvos. If a member becomes eligible for alpha, they will be moved into that scheme.

4.1.15 Members rejoining during this period who left with a compensation payment will have to repay the lesser of (a) 6 months' worth of compensation and (b) the notional period of their compensation. If their pension is in payment abatement may apply. (see 4.1.53)

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Breaks between CSP employments of more than 6 months but less than 5 years

4.1.16 Most rejoiners who return after a break of 6 months but within 5 years will be eligible to join either nuvos or partnership. However, those who resigned from their previous CSP employment or whose fixed term appointment came to an end, having qualified for a classic, classic plus or premium pension, and who are not yet receiving their pension, will have a choice of premium or partnership. They will not be able to join nuvos. If a member becomes eligible for alpha, they will be moved into that scheme.

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Breaks between CSP employments of 5 years or more

4.1.17 This group of rejoiners have the option to join either nuvos or partnership. (In effect, you treat them as if they were new entrants). Annex 4A gives a summary of the choice(s) of scheme(s) available for rejoiners. Because the choices for rejoiners are not straightforward, we have developed a ‘Pensions Questionnaire' and a 'Joiner Calculator’ which you must use to help you identify the correct choices. We tell you more about this in paragraph 4.1.18 onwards. If a member becomes eligible for alpha, they will be moved into that scheme.

Using the Pension Questionnaire and Joiner Tool will help you to identify the scheme your new member of staff is eligible for.

This will involve you collecting information from your new employee about their public service pension scheme history, as this can affect their scheme eligibility. You can find more information in EPN397.

4.1.18 The following table lists the groups of employees who are not regarded as being either new entrants or rejoiners for pension purposes.

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Exceptions to new entrants and rejoiners

Staff on short term contracts who are given further contracts of work (and have not had a break in employment)

As there has not been a break in employment, these staff are not regarded as either new entrants or rejoiners for pension purposes. For guidance, please see Annex 4D

Members moving from one CSP employer to another without a break in service

An individual is not regarded as a new entrant or rejoiner if they move from one CSP employer to another CSP employer. These members will have already established their pension choice. They are not generally permitted to change their option purely as a result of moving from one CSP employer to another.

However, if the transferring employee is opted out of the Civil Service pension scheme, does not have an active Partnership account, and they join their new employer on or after its automatic enrolment staging date, the new employer must enrol the employee into the Civil Service pension scheme (see paragraph 4.4.13).

The exporting employer must tell you about the member’s pension details when they transfer the personnel details to you. It is your responsibility to ensure you have received this information. Annex 4B text C gives you a form of words to use in the letter of appointment. See Section 6.1 for how to deal with this type of staff move or ‘transfer’.

Staff on loan from another CSP employer

Staff on loan will have already established their pension choice and are not permitted to change their option purely as a result of working on loan for another CSP employer.

Staff returning from a career break

Staff returning from a career break will stay in the scheme that they were in before their break.

After 1 April 2015 the member may be enrolled into alpha when they rejoin, but this is dependent on their eligibility

Pensioners immediately re- employed upon retirement

See guidance under ‘Other things you need to know’, paragraph 4.1.53 onwards.

Staff who previously worked for the Northern Ireland Civil Service or a ‘by-analogy’ organisation

If you appoint someone from the Northern Ireland Civil Service or a ‘by-analogy’ organisation, they may be able to join the CSP scheme that mirrors their previous arrangement as long as they have not taken their pension and:

  • they apply to transfer all their benefits from the by-analogy scheme, and
  • they have not had a break of more than 28 days in service between the two employments. Where there is a break of more than 28 days, you must treat the employee as a new entrant.

Where you appoint someone from the Northern Ireland Civil Service or a ‘by-analogy’ organisation and they are receiving a pension from that employment, they will only have the choice between nuvos and partnership and from 1 April 2015, alpha and partnership.

Note this arrangement applies only to multi employee by-analogy organisations and not to ‘one man schemes’ set up especially for individual post holders.

A list of by–analogy and analogous schemes can be found here.

Staff returning from secondment

See Section 5 for information on the treatment of secondments.

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Helping you decide pension choices for new entrants and rejoiners

Please note: You must use the Pension Questionnaire and the Joiner Tool. It is an essential tool to help you deliver the correct choice of pension(s) to staff and, because of this, Cabinet Office, The Pension Schemes Executive is mandating its use by all employers who participate in the CSP arrangements.

Although from 1 April 2015 most new entrants will only have a choice of joining either alpha or partnership, the choices for rejoiners and those with recent public service pension history are not straightforward. The ‘Pensions Questionnaire' and the 'Joiner Tool’ will help you identify the correct choices.

This will involve using the Pension Questionnaire to collect information from your new employee about their public service pension scheme history, as this can affect their scheme eligibility.

See 4.1.73 for more details on public service pension history.

4.1.19 The questionnaire and the tool can be found here.

4.1.20 You must ensure that you collect information from your new employee about their public service pension scheme history, as this can affect their scheme eligibility. The questionnaire includes a section for your new employee to complete with this information.

4.1.21 Blank

4.1.22 Before issuing the questionnaire you should put your return address in the space provided to let the appointee know where to return the form. You can input this on the form before you print it off.

4.1.23 You must send the questionnaire with the ‘conditional offer’ letter to the appointee and include the text we have provided in Annex 4B, letter text K. The text asks the appointee to complete and return the questionnaire to you without delay; you must give them sufficient time to complete it and enter an appropriate date for return in the letter.

4.1.24 The tool will tell you:

  • which pension choice(s) a rejoiner has
  • which Starter Pack to order, and
  • which ‘Letter of Appointment’ (LOA) text to use.

The tool will also remind you about other actions (for example, abatement).

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Actions once eligibility has been established

‘Enrolling' people in to a pension scheme

4.1.25

  • If you have staged for automatic enrolment all employees should be enrolled in one of the Civil Service pension schemes when they start regardless of the length of their contract.
  • If you have not staged for automatic enrolment you will enrol all new entrants who are given contracts of 12 months or more into nuvos, or from 1 April 2015, alpha.
  • The tool will tell you which scheme to enrol each rejoiner into, according to their circumstances.

Please note: Section 4.4 of this guide gives more information about the employer’s responsibilities under automatic enrolment

4.1.26 Even where you do enrol people, you must tell them about the pension choices they have and send them the appropriate LOA text and order them a Starter Pack, if appropriate. (The tool will guide you on which text you use for rejoiners.)

4.1.27 You must give all new entrants and rejoiners 3 months from their start date to decide which scheme they wish to join. If they choose within the 3 months, you backdate their choice to their start date.

4.1.28 Where you have enrolled someone and they choose partnership on their Pension Choices form, as long as they have decided within 3 months of their start date, you must ‘unscramble’ contributions from the scheme they were enrolled into and put them into partnership. Section 4.2 tells you more about ‘unscrambling.’

4.1.29 If you have not staged for automatic enrolment you do not enrol new entrants with contracts of less than 12 months into a Civil Service pension scheme. They will have to choose to join a pension scheme. Since 1 April 2015, they have a choice of either alpha, or partnership. If they do choose to join within 3 months, contributions must be backdated to their start date.

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partnership rejoiners, rejoining within 28 days

4.1.30 Where a rejoiner was in partnership in their previous employment and joins your organisation within 28 days of leaving that employment, you must send them, at this stage, form CSP14. This form asks the rejoiner for their partnership pension account details and their authorisation so that you can contact their pension provider and re-open their account. We have provided a form of words for you to use in a covering letter, which you can find in Annex 4B, letter text J. (You will only need to do this if the rejoiner is coming from another CSP employer. If they worked for you before, you should already have these details.) The tool will prompt you.

4.1.31 You can find a copy of form CSP14 here.

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Letter of appointment (LOA) text

4.1.32 You should insert the appropriate text into your standard LOA to tell the appointee about their pension choices. We have provided standard texts in Annex 4B; these texts relate to each of the particular pension choice(s) each group of new entrants and rejoiners have. The tool will tell you which letter text to use. Where applicable, the text notifies those employees who have been enrolled into one of the pension schemes.

Please note: TheLOA texts have been amended to reflect automatic enrolment and the introduction of alpha. Some letters include a generic statement, but for some scenarios, a choice of text has been provided for use depending on whether an employer has staged for automatic enrolment or not. You must read the context and choose the appropriate statement to use to fit the scenario. You must also ensure that you enclose a copy of the automatic enrolment factsheet with each LOA. The factsheet can be found here.

4.1.33 You should send the LOA before the person starts work. If this is not possible, then you should include the appropriate text in the ‘start letter’ or similar communication that is sent to the appointee with details of their joining arrangements.

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Starter Packs

4.1.34 It is a statutory requirement that new entrants and rejoiners receive scheme information within two months of their start date. Cabinet Office requires you, as employer, to ensure that new staff receive scheme information much earlier. Please see paragraph 4.1.39 onwards.

4.1.35 There are 4 Starter Packs, each designed for the different categories of new entrants and rejoiners. (The tool will tell you which Starter Pack to order).

'alpha full' - for all new entrants eligible for alpha

  • Staging for automatic enrolment is not a factor. And all rejoiners except those who only have a choice between nuvos and partnership, or premium and partnership.

‘NE1’ – for all new entrants eligible for nuvos:

  • whose employer has staged for automatic enrolment; or
  • whose employer has not staged for automatic enrolment, and whose appointment is expected to last for 12 months or more. And all rejoiners except those who only have a choice between premium and partnership or alpha and partnership.

‘NE2’ – for new entrants whose employer has not staged for automatic enrolment, and whose appointment is expected to last less than 12 months and are eligible for nuvos

Please note: once a department has staged under automatic enrolment, it will no longer be necessary to order or issue starter pack NE2 for new starters joining on or after the staging date as all employees, including those employed for less than 12 months, will be automatically enrolled in a qualifying scheme.

‘RJP’ (premium) – for rejoiners who are eligible to join (or rejoin) premium. These will generally be people who left classic, classic plus or premium on resignation with more than 2 years’ service, having qualified for a pension and who return with a break of less than 5 years.

4.1.36 All packs contain:

  • An introductory letter with a personalised Pension Choices form attached. The letter tells all starters who are given pension choices that they have 3 months in which to decide which pension scheme they want to be in. The Pension Choices form also allows the new entrant/rejoiner to make a death benefit nomination;
  • Two leaflets supplied by the partnership pension account providers which provide background information and contact details for new entrants/rejoiners interested in this arrangement;
  • A Partner Declaration form for a partner’s pension.

4.1.37 NE1 and NE2 Starter Packs also contain a leaflet entitled 'nuvos or partnership: an overview'. alpha full contains 'alpha or partnership: an overview'.

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Ordering Starter Packs

4.1.38 All pensions material including the Starter Packs are distributed by the schemes print supplier.

4.1.39 When you issue the LOA (or earlier communication, as appropriate) you must, at the same time, ask the schemes print supplier to issue a Starter Pack.

4.1.40 The preferred method of ordering from the schemes print supplier is by email, using the DRF spreadsheet or the Dispatch Request Form. (There may be different versions of the form or spreadsheet, please ensure you use the correct version of the packs you are ordering). Both the DRF spreadsheet and form are available here.

These forms are amended from time to time in order to improve the effectiveness of scheme processes, so it is important that you always use the version on the website. Using out of date versions of the form could delay your order, as the schemes print supplier can only process the latest version of the DRF form and spreadsheet.

You should download the form and spreadsheet and send them as an attachment to an email. The schemes print supplier will then email you back with an immediate acknowledgement.

4.1.41 You may fax or post your orders only if you are unable to use email. The address for the schemes print supplier is:

St Ives Direct Ltd St Ives plc
1 Tudor Street
London
EC4Y 0AH

The envelope should be marked - For the attention of the MyCSP Team.

Fax: 0870 0131 694

Email: cspdorders@stivesdirect.com

4.1.42 Please note that the schemes print supplier will not acknowledge either faxed or posted orders.

4.1.43 It is your responsibility to make sure that each new entrant receives their Starter Pack within 1 week of issue of their LOA or start date, whichever is the earlier. Ideally you should ask new entrants at their induction if they have received their pension Starter Packs. This will prompt them to make their pension choice and will help you to identify anyone who has not received their pack.

4.1.44 Where a member has not received a pack, you should follow up the delivery with the schemes print supplier. You should not refer the member to the scheme print supplier in any instance.

It is your responsibility to follow up delivery of the pack, and if the member has a query about the pension arrangements you should direct them to the MyCSP helpline.

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Dealing with Pension Choices forms

4.1.45 The new entrants and rejoiners must complete and return the Pension Choices forms to you to ensure the correct deductions are made from your payroll. Please do not return the form to MyCSP, as they will not process them.

4.1.46 The forms are colour coded to help you recognise the actions you need to take according to new entrant or rejoiner status. Table 2 tells you about the colour coding and the actions to take when you receive these forms.

Table 2

Pension Choices formActions to take
alpha full (alpha) - white

Pass the form to MyCSP for action. You will have already enrolled the new entrant into alpha so there will be no further action for you.

If the new entrant chooses partnership, tell payroll to:

  • 'unscramble' alpha contributions (see Section 4.2 for details on 'unscrambling')
  • change the 'contracting-out' status (see Section 3.5 and 4.2 for further details)
  • send the Pension Choices form to MyCSP to tell them of the member's choice so that they can check that Compendia has been correctly noted.

Note 1: You take these actions only if you have received the Pension Choices forms within 3 months of the appointee's start date.

If the new entrant ticks partnership, follow instructions given in Section 4.2 and tell MyCSP so that they can note Compendia.

NE1 - green

If the new entrant ticks that they want to stay in nuvos, pass the form to your MyCSP for action. You will have already enrolled the new entrant into nuvos so there will be no further action for you.

If the new entrant chooses partnership, tell payroll to:

  • ‘unscramble’ nuvos contributions (see Section 4.2 for details on ‘unscrambling’)
  • change the ‘contracting-out’ status (see Section 3.5 and 4.2 for further details)
  • send the Pension Choices form to MyCSP to tell them of the member’s choice so that they can check that Compendia has been correctly noted.

Note 1: You take these actions only if you have received the Pension Choices forms within 3 months of the appointee’s start date.

If the new entrant ticks partnership, follow instructions given in Section 4.2 and tell MyCSP so that they can not Compendia.

NE2 - dark blue

If the new entrant ticks nuvos, tell payroll to:

  • put them in nuvos,
  • backdate entry to their start date (see note 2), and
  • start paying contributions (backdated to their start date)
  • send the Pension Choices form to MyCSP to tell them of the member's choice so that they can check that Compendia has been correctly noted.

If the new entrant ticks partnership, follow instructions given in Section 4.2 and tell MyCSP so that they can note Compendia.

Note 2: The new entrant must return their form within 3 months of their start date for you to backdate their choice.

As mentioned in para. 4.1.35, once a department has staged under automatic enrolment, it will no longer be necessary to order or issue starter pack NE2 for new starters joining on or after the staging date as all employees, including those employed for less than 12 months, will be automatically enrolled in a qualifying scheme.

RJP (premium) - red

You will have enrolled this group into premium. If the rejoiner ticks that they want to stay in premium, pass the form to MyCSP.

If the new entrant chooses partnership, tell payroll to:

  • ‘unscramble’ premium contributions (see Section 4.2 for details on ‘unscrambling’)
  • change the ‘contracting-out’ status (see Section 3.5 and 4.2 for further details)
  • send the Pension Choices form to MyCSP to tell them of the member's choice so that they can check that Compendia has been correctly noted.

Note1: You take these actions only if you have received the Pension Choices forms within 3 months of the appointee’s start date.

If the new entrant ticks partnership, follow instructions given in Section 4.2 and tell MyCSP so that they can note Compendia.

4.1.47 Where you have enrolled people into alpha, nuvos or premium, they may not always return their Pension Choices form. You should encourage them to do so as it includes their death benefit nomination and other important information.

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Receiving Pension Choices forms after the 3 month decision period

4.1.48 Where staff return their Pension Choices form after the 3 month decision period, you will need to take the following action according to whether or not you enrolled them into alpha, nuvos or premium:

  • if they were enrolled automatically and wish to stay in that scheme, then there is no further action for you (although in all cases you must keep the Pension Choices form on the member’s personnel file for future reference), and send a copy to MyCSP.
  • if they were enrolled but wish to join partnership, you must treat their choice as a request to ‘switch’ schemes. See Section 3 for information on switching. MyCSP may take this action forward for you, according to your agreement with them. (You must keep the Pension Choices form – see 1st bullet point above.)
  • if they were not enrolled, you must put the member into the scheme of their choice from the next available payday. (You must keep the Pension Choices form – see 1st bullet point above.)

4.1.49 Where you receive a Pension Choices form after the 3 month decision period, you must first consider the reasons why there has been a delay in the return of the form. If the delay is as a result of your actions you should consider backdating contributions (where appropriate) so that the member doesn’t lose out. You must get approval from Cabinet Office, The Pension Schemes Executive before you take any action. Email: TPSEemployers@cabinetoffice.gov.uk.

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At-a-glance Employer Actions tables

4.1.50 Annex 4C gives a series of tables which show, at a glance, the actions you need to take throughout the recruitment process.

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New entrants deciding not to join or deciding to opt out

4.1.51 A new entrant whose employer has not staged for automatic enrolment, and whose appointment is expected to last less than 12 months may decide that they do not wish to join any of the CSP arrangements. There is an explanation on the Pension Choices form of what they will be giving up if they decide not to join. There is also text about automatic enrolment.

Please note: the employer is now responsible for receiving and processing Opt Out forms. Please see section 5.9 for more information about this.

4.1.52 If a new entrant who has been enrolled in the CSP arrangements confirms that they wish to opt out, providing that they have indicated this within 3 months of being enrolled or being told that they have been enrolled (if later), they will be entitled to a refund to be processed as follows:

a. If you have not staged for automatic enrolment, you should take action to stop contributions. You should send a copy of the completed Opt Out form to MyCSP and wait for MyCSP to tell you to refund the employee though your payroll. If MyCSP tell you to refund, you must then tell your payroll to:

  • refund to the employee any alpha, nuvos or premium pension contributions they have paid, less income tax, and less the employee’s Contribution Equivalent Premium (CEP) for that period.
  • recover overpaid alpha, nuvos or premium scheme ASLCs from the Cabinet Office Civil Superannuation, and;
  • calculate the employer’s CEP and reinstate the employee into S2P from their first day by paying the employer’s and employee’s CEP to NICO this only applies for the period a member was contracted out of the S2P, contracting out will end in April 2016.

b. If you have staged for automatic enrolment, you should stop contributions and take the following actions:

  • If the new entrant has opted out within one month of being enrolled or being told that they have been enrolled (if later) you must tell your payroll to refund the employee as instructed in a) above. You do not need to wait for MyCSP to tell you to refund. You should then send a copy of the completed Opt Out form to MyCSP for them to take pension action.
  • If the new entrant has opted out after one month of being enrolled or being told they have been enrolled (if later), you should send a copy of the completed Opt Out form to MyCSP and wait for MyCSP to tell you if a refund is to be paid through payroll. If MyCSP tell you to refund the employee, you must tell your payroll to refund the employee as instructed in a) above.

The refund process outlined above is also set out and illustrated in flowcharts in Annex 5D of the Employer Pension Guide

Please note: The different approaches to handling refunds that must be taken depending on whether or not you have staged for automatic enrolment is to ensure that any new starters who may in fact be rejoiners with a previous preserved pension, are identified and that their contributions are dealt with appropriately under the relevant scheme or automatic enrolment rules. Rejoiners with a previous preserved pension in a Civil Service scheme do not receive a refund for any further pension contributions made under the current scheme rules. However, they can receive a refund if they opt out within one month of being re-enrolled or told they have been re- enrolled (if later), under automatic enrolment legislation.

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Other things you need to know

Rejoiner matters

Abatement

4.1.53 Abatement will apply where a rejoiner:

  • is receiving a Civil Service pension or has received a pension lump sum before the re-employment or
  • is receiving an annual compensation payment (ACP) or
  • has received a Compulsory Early Severance package that included a reserved rights pension

‘top-up’ payment (for this group only, abatement will not apply to those who are employed on or after 30 July 2007 in nuvos. A quarantine period will apply instead for these members).

The tool will tell you if you have to do this. For details on how abatement works, please see Section 4.3.

alpha pensions are not subject to abatement.

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Rejoiners who have an upper-tier ill health pension

4.1.54 If, exceptionally, you re-employ someone who has an upper-tier ill health pension, they are not eligible to rejoin the CSP arrangements. This is because an upper-tier ill health pension includes a service enhancement through to pension age. If, after review, the upper-tier top-up is withdrawn, the person can then rejoin the pension arrangements. The rejoiner will then be eligible to join either nuvos or partnership or after 1 April 2015, alpha.

Please note: if you have staged for automatic enrolment purposes, you must enrol the person into the Civil Service pension scheme, notwithstanding the general exclusion of people with an upper-tier ill health pension in payment. In such circumstances, the quarantine process set out in the following paragraphs should be followed.

Quarantine periods

4.1.55 Someone left with enhanced benefits:

  • on early retirement under compensation terms
  • on ill-health terms, or
  • with reserved rights under compulsory early severance, they may have had their period of pensionable service enhanced. On re-employment, you need to ensure they are prevented from paying pension contributions to build up any further pension until the period of enhancement (the “quarantine period”) has expired. You must tell any rejoiner in this position when their quarantine period will expire in their letter of appointment. The tool will tell you the correct letter text to use. You must ask MyCSP for the quarantine period end date. You must also tell your payroll the quarantine period end date, so that they know when to start deducting employee contributions and paying the full ASLC. (Please note; MyCSP should send you a reminder when the “quarantine end date” is approaching.)

4.1.56 You will be responsible for paying a mini-ASLC of 0.8% of the rejoiner’s pensionable earnings during the quarantine period to cover them for death in service.

4.1.57 Blank

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Rejoiners who have had a break in service of 28 days or less

4.1.58 Where people are re-employed within 28 days having left under compensation, this will be cancelled and they will have to repay any pension and/or compensation received. You must tell MyCSP so that they can take the necessary action.

4.1.59 Where a rejoiner who received an enhancement as part of an early or ill health retirement package decides to join partnership, they can make contributions (through payroll) to their account from their start date. You only pay a mini-ASLC of 0.8% during the enhancement (“quarantine”) period.

4.1.60 The Joiner Tool will guide you.

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Compensation payments

4.1.61 Blank

4.1.62 If the break is more than 28 days the member may have to repay some or all of their compensation. The Compensation lump sum will have to be repaid if the member rejoins within the lesser of i) 6 months or ii) the notional period of the compensation lump sum. If re-employment is at a lower salary an adjustment will be made to the amount of compensation that is repaid.

4.1.63 You must tell MyCSP that the member had received a payment. They will then calculate the amount due and advise you of the amount that you should tell the member must be repaid.

4.1.64 Abatement of salary may apply to anyone who is re-employed after receiving reserved rights under the pre 22 December 2010 reserved rights terms. If they are re-employed within 6 months of leaving a portion of the compensation payment will be repayable. For members who are re-employed a quarantine period will apply.

Abatement of salary will not apply to anyone who is re-employed after receiving a percentage of reserved rights under the new CSCS arrangements. If they are re-employed within 6 months of leaving, a portion of the compensation payment will be repayable.

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Joining past service with new service

4.1.65 A rejoiner who has a preserved classic, classic plus or premium pension in the CSP arrangements will, in certain circumstances, be able to join this up with their new service:

  • where the rejoiner has had a break of more than 28 days but less than 5 years and goes into premium, they will be able to link their two periods of service.
  • where the rejoiner is not eligible to go into premium and joins nuvos, they may choose to link their preserved service. This option will not be available to those who left with a compensation payment. The preserved service will be converted into final salary benefits similar to premium but with the service adjusted to reflect the later pension age in nuvos, and (if the preserved award was in classic or classic plus) differences in the benefits structure. When the member takes their nuvos pension benefits, the final salary element of their pension will be worked out on their final pensionable earnings at that time. Their new service will provide nuvos benefits built up each year – in other words, they will have a mix of final salary and nuvos benefits. MyCSP will handle any linking enquiries from rejoiners.
  • where the rejoiner is eligible for alpha, they do not choose to link their preserved service. This is an automatic process based on the length of the break in their scheme membership. Over 5 years is a 'disqualifying break', and the persons must remain separate, under 5 years is a 'qualifying break' and the pensions are linked automatically.

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Pensioners re-employed immediately upon retirement

4.1.66 If a member retires from CSP employment on or after pension age, or leaves on actuarially reduced, lower tier ill-health or approved early retirement before pension age, and you subsequently re-employ them after a break of 28 days, they will generally have the choice of nuvos or partnership, or after 1 April 2015, alpha.

4.1.67 These arrangements do not apply to those who are re-employed having left on upper tier ill health retirement.

4.1.68 In all cases where a pensioner is re-employed, their PCSPS pension will be abated (reduced or suspended) if their pension plus new annual rate of salary exceeds their pensionable earnings immediately before retiring. alpha pensions are not subject to abatement while in payment. See Section 4.3 for details of the action you need to take.

4.1.69 On final retirement, their pension will be calculated according to the relevant re-employment provisions in their pension scheme.

4.1.70 Blank

Please note that ‘partial retirement’ was introduced on 1 March 2008. Partial retirement has replaced the provisions for re-employment immediately after taking pension, (although formal retirement continues to exist for “Pre-Fresh Start” Prison Officers). See Annex 4G for guidance.

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Transferring pension benefits into the CSP arrangements

4.1.71 If you have a new entrant who wishes to transfer their benefits from a previous pension into the CSP arrangements, you should refer them to MyCSP.

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Processing partnership applications

4.1.72 Please see Section 4.2.

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Scheme Eligibility - Public service pension scheme history

4.1.73  It is your responsibility to find out if any of your existing staff, and new employees, have accrued pension rights in another public service pension scheme. We cannot tell you how you should go about this information gathering exercise. This is because all employers have different processes and different contractual relationships with their third party providers. However, we have provided you with a form which you can ask your employees to complete and use to work out if they have previous public service pension rights

4.1.74  If a person has service in a previous public service pension scheme it can affect their Civil Service pension rights in four ways:

If the individual qualified for Tapered Enrolment in their previous scheme they may qualify for Tapered Enrolment in the Civil Service scheme.

If the individual qualified for full protection in their former scheme they may qualify for full protection in the Civil Service scheme.

If they have preserved benefits in the Civil Service scheme and their break between the public service employments is 5 or less years then the deferred award will be cancelled. This means their total break between Civil Service pension employments could exceed five years.

If they have transferred their final salary rights to the Civil Service scheme after a break in service of five or less years then they retain the final salary link for those pension rights.

4.1.75  You need to find out if an individual has belonged to one of the following public service Pension schemes:

  • Judiciary
  • Local Government Pension Scheme
  • Teachers’ Pension Scheme
  • National Health Service Scheme
  • Fire and Rescue Workers’ Scheme
  • Police Forces’ Scheme
  • Armed Forces Scheme

4.1.76 You need to capture public service pension history for any joiners since 31 March 2007, as a qualifying break could not have started before that date. A qualifying break is a break that  was under five years and that could make an employee eligible for full or tapered protection.

4.1.77 It is employers’ responsibility to use the information to enrol their staff in the right scheme. Employers need to tell the scheme administrator (MyCSP) about an individual’s public service pension history so they can calculate benefits using the final salary link where appropriate.

4.1.78  You must have collected this information for your existing staff in service before 1 April 2015.

If someone had full protection or qualified for Tapered Enrolment in their previous scheme then this may mean they also qualify in the Civil Service scheme. You need to know so that you can make the right decision about whether or not to migrate the individual to the alpha scheme on 1 April 2015.

4.1.79  New joiners after 1 April 2015 will be requested to supply details of their public service pension scheme history on the Pensions Questionnaire. You must use this information in the Joiner Tool to ensure you enrol your staff into the correct scheme.

Scheme Eligibility - The presence test

4.1.80  Gathering a member’s public service pension scheme history (including their previous membership of the PCSPS) is used to determine their eligibility for alpha or to join one of the PCSPS schemes.

4.1.81  There are two dates when a member is checked against the ‘presence test’, 31 March 2012 and 31 March 2015.

4.1.82  On these dates they are checked to see if they were a member of a public service pension scheme, or on a qualifying break in membership.

For a break to be a ‘qualifying break’, a member must have pension benefits from their previous period of scheme membership (eg a preserved award) and have joined another public service pension scheme within five years.

4.1.83  Members fail the presence check (they were not present or on a qualifying break on both dates) can only be eligible for the alpha scheme unless they fall into one of the exception groups.

The Joiner Tool will identify the correct scheme to enrol new members into.

There is more information available about eligibility for alpha, public service history and the presence tests available here.

Your responsibilities when staff join partnership

Introduction

4.2.1 Section 3.2 of this guide tells you about the partnership pension account and how it works. Please read it before processing any partnership applications.

4.2.2 The new entrant Starter Pack tells new entrants who wish to open a partnership account to contact the partnership pension provider(s) directly for an application pack. The application pack will explain what the provider has to offer and contains the provider application form.

4.2.3 Annex 1D lists the helpline numbers for each of the providers, which are also available on the provider flyers included in the new entrant Starter Pack. Members are responsible for requesting information from the provider(s) directly. They can request packs from more than one provider but can only choose one.

4.2.4 New entrants complete the Pension Choices form and fill in their section of the chosen provider’s application form. They send both forms to you. If the new entrant applies for partnership within 3 months of the start of their employment they are entitled to have the employer contributions to partnership backdated to the first day of service.

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Employer actions

4.2.5 You are responsible for processing the forms. This means that the new entrant’s partnership pension account is not set up until you process the application form and send it to the provider.

The section below sets out the steps for you and your payroll to follow

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Actions for employer and payroll

Step 1

Check the Pension Choices form. This will show you that the new entrant has chosen partnership. It is important to check that the applicant has signed and dated the form and that they have entered the correct employer details.

If the new entrant has chosen partnership; have they sent you a provider application form?

If YES, please go to step 2.

If NO, please contact the new entrant and ask them to:

  • choose a provider and remind them to contact the chosen provider for a partnership application form
  • fill in the employee section of the provider application form
  • send the provider application form to you as soon as possible. (You may wish to remind the new entrant that if they make their pension choice within the first 3 months of employment you will backdate the employer age-related contributions to partnership to their first day of service.)

You should not take any further action until the new entrant has sent the provider application form to you.

Step 2

Check the provider application form to ensure that:

  • the new entrant has entered all of their personal details on the front page of the provider application form, and signed and dated the form
  • if they have chosen to split contributions between funds, the % splits add up to 100%
  • although the employee is not required to contribute anything, if they have chosen to contribute they have shown their contribution as a percentage to one decimal place.

If any information is wrong, you will need to return the form to the new entrant for amending, reminding them of the 3 month choice period. If the 3 month choice period lapses whilst you are sorting out enquiries, you should consider the circumstances as to whether or not you ‘unscramble’ nuvos contributions (see paragraph 4.2.17). It is reasonable to do so if the new entrant originally returned their form within the initial 3 months. However, you may decide against unscrambling if the new entrant has caused unreasonable delays.

Step 3

Complete the employer section on the provider application form.

  • Employer details: this should be the name of your department/body and not just ‘Civil Service’.
  • Partnership Numbers (payroll and employer codes): these codes help the pension providers to identify where the data has come from, so that they can resolve any problems quickly. Obtain your code before completing any partnership application forms. Basingstoke will give you the codes if you do not already have them. Contact SCU@mycsp.co.uk
  • First payday on which payments are to be deducted: this is the date your payroll will send the first partnership contributions to the chosen provider. Make sure that the providers receive all applications in good time before the first payment. This is important as it allows the provider to set up the member’s account before receiving the first payment. You may need to check with your payroll provider how long it will take them to set up the payment.
  • Where new entrants make their pension choice within the 3 months’ choice period, you should backdate their option to the first day of their service. You must enter the date that the first payment is due and not the date the new entrant started work with you. For example, if a new entrant started work on 1 September and made their choice at the beginning of October, the next payroll date is 31 October. You can write the entry as such: ‘31.10.07 backdated to 01.09.07’ or ‘October backdated to September’ or just October and a letter to confirm original start date.
  • Pensionable earnings: as a general rule, only permanent items of pay are pensionable. This will include any pensionable allowances but will not include payments such as overtime. The employee may, however, also have some non-cash pensionable earnings. For example, some people may receive 2% uniform allowance and others may have an allowance for accommodation. In these circumstances, you should also pay contributions based on the equivalent cash value of these non-cash pensionable earnings.
  • Age-related and matching payments: employer contributions are in two parts, age-related and matching.
  • You pay an age-related contribution for all partnership members whether or not the member contributes. The level of contribution depends on the employee’s age at the beginning of the current tax year (on 6 April last). The employer / ASLC contribution page sets out the percentage contribution. You must put the appropriate percentage on the provider application form and review the age contributions each year. You will need to revise the contributions when a member moves into a different age band.
  • The employer matching contribution depends on whether, and how much, the member chooses to pay to partnership as a regular contribution. You can find out how much the employee wants to contribute from the information they give in the employee section of the provider application form. If the new entrant has chosen to make an employee contribution, you will match this up to a maximum of 3% of the employee’s pensionable earnings. You will pay no more than 3% regardless of whether the new entrant pays more than that. You can make a higher contribution in exceptional circumstances provided that these are justified on a case by case basis as necessary for recruitment and retention purposes. You must report all cases to Cabinet Office, The Pension Schemes Executive, on TPSEemployers@cabinetoffice.gov.uk. You will need to ensure that your payroll provider and the pension provider are fully aware that non-standard contributions are to be paid.

Annex 4E provides examples and further information on how to calculate partnership contributions.

  • Payroll Reference Number: this is the employee’s payroll reference number.

Step 4

Send the application form to the provider. You should send applications in bulk each week to each provider. You must be sure that the member application form will reach the provider in good time for them to set up the account before payroll sends the first payment.

Step 5

Instruct your payroll to begin making deductions from the new entrant’s or rejoiner’s salary and to unscramble alpha, nuvos or premium contributions if necessary. (See paragraph 4.2.17). Your payroll provider must then send both the employer and employee contributions to the chosen provider. In addition to paying the age-related and matching contributions, you must also pay a mini ASLC of 0.8% of pensionable earnings to Cabinet Office Civil Superannuation to cover the cost of benefits due as a result of death in service or ill health retirement. Section 3.5 tells you more about this. It also gives you the deadlines you must meet for paying the contributions.

Your payroll must also send a schedule via the provider’s website which we call web based scheduling. Further guidance on web based scheduling can be found at annex 4F which was originally issued as EPN 207. This schedule contains data, such as member name and NI number, as well as amounts of employer and employee contributions. The provider needs this information in order to allocate the contributions and set up the account. To set up a web based scheduling account you will need to:

  • decide who in your organisation will have access to submit pension contribution schedules. They will, of course, need to have access to the Internet; and
  • request access to the providers’ web sites. You will need to contact each provider separately to request access to their websites.

Both provider web sites have been designed with ease of use in mind and, although different, their functionality is broadly similar.

You can use web based scheduling to automatically deduct the total contributions listed on the schedule from your payroll account. The money is not deducted until you submit your schedule. Alternatively you can use web based scheduling for the transmission of member information but carry on making your payments by BACS.

Provider contact details are shown in section 1 annex D.

Step 6

Send Pension Choices form to MyCSP. Do not send it to the provider. MyCSP will use this to update the member’s pension record and note the death benefit nomination.

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Employers’ regulatory responsibility

4.2.6 Because the partnership pension account is a stakeholder type pension, it is vital that you follow the correct procedures. The Financial Conduct Authority (FCA) and The Pensions Regulator regulate stakeholder pensions, which means that the pension providers have strict guidelines to adhere to. If you do not follow these procedures, the providers may report you to The Pensions Regulator. (For example, FCA rules do not allow providers to hold monies which they cannot apply to a member’s account for more than a few days.) The providers can only invest contributions if they have the corresponding application form and receive the schedule via web based scheduling. If they do not have all the necessary information, the providers will have to return any payment you may have sent. This means you will have to reverse the contributions and set them up for the following month.

4.2.7 Your payroll must send contributions to the provider as soon as possible after being deducted from an employee’s pay. This is so that the member does not suffer a loss of investment opportunity. There is a statutory deadline under the Welfare Reform and Pensions Act 1999, which requires the employee and employer contributions to be paid by the 19th of the month following the month in which they were deducted from the policyholder’s salary. You should, ideally, instruct your payroll to pay contributions within the shortest possible time.

4.2.8 The pension providers tell us of any employers who do not get payments and documentation to them within the statutory set time limits.

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Policy start dates

4.2.9 The chosen pension provider will send a policy schedule to the member when the application has been processed. The start date on the policy schedule is unlikely to be the date the new entrant took up employment with the Civil Service or the day they signed their application form. The providers allocate the policy start date as the month in which they receive and process the first contributions. This can include backdated contributions but the policy schedule itself will not be backdated.

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Cooling off period

4.2.10 After applying for partnership, the member has a 30 day ‘cooling off’ period in which to change their mind. The provider will write to you and refund both the employee and employer contributions if the member cancels their policy. You must arrange for the member to receive a refund of their contributions.

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Sporadic earnings

4.2.11 Some employees do not receive any pensionable earnings and are not paid through the payroll. This is particularly common with fee-paid staff who often invoice the employing department as and when they do work for them. If the fee-paid person meets the eligibility criteria for scheme membership you need to:

  • attach a note to the provider application form when you pass it to the provider to say that the policy should be treated on a single payment basis and
  • send a cheque covering the employee and employer contributions to the provider as and when the employee is paid, together with details of who the payment relates to.

4.2.12 Where the provider application form asks for details of the individual’s annual pensionable earnings you should estimate what their annual pensionable earnings will be. You should do this even where it is unclear what future work the individual might undertake.

4.2.13 The Pensions Regulator requirements mean that employers must tell the partnership provider if no contributions are to be paid in a particular month and the reason why. Where there are no pensionable earnings and therefore no contributions for a particular month if you are sending information via web based scheduling you must put 0.00 in the contribution rate and you may be asked to select a reason such as payment holiday.

For the manual schedule you can either:

  • mark the individual’s entry on the monthly data file with the status code of 0 (‘sporadic earnings’); or
  • mark the individual’s entry on the monthly data file (from payroll to the pension provider) with the status code of 3 (‘contribution holiday’).

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Extending the 3 month deadline for new entrants

4.2.14 Sometimes new entrants, through no fault of their own, do not receive their Starter Pack until some way into their first three months. In these circumstances, you should encourage individuals to return their Pension Choices form as soon as possible, but you should still allow them three months to make their choice if they need it. On receipt of the form, you should process it as quickly as possible, backdating employer partnership contributions to the first day of service.

4.2.15 In this situation, or if there is a delay in processing the partnership application form, you will need to tell the new entrant that you will backdate any employee contributions to their first day of service. Therefore, significant arrears could mean a big deduction from one month’s pay. See paragraph 4.2.17 onwards for ‘unscrambling’ actions.

4.2.16 A new entrant can vary their initial contributions to avoid significant arrears being deducted from one month’s pay. Individuals might, for example, choose not to make contributions for the months that are backdated, and only contribute for the future. They could do this by indicating a zero contribution on their provider application form and then opting for an increase by completing a contribution change form.

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Unscrambling

4.2.17 If a new entrant is enrolled into alpha, nuvos and they opt for partnership within three months of joining, you must fully backdate their choice of partnership to their first day of service.

4.2.18 This means that you (or your payroll) must:

  • refund to the employee any employee contributions paid in earlier months, less income tax, and less the employee’s Contribution Equivalent Premium (CEP). (See paragraph 4.2.19 for further information).
  • recover overpaid scheme ASLCs from Cabinet Office Civil Superannuation
  • pay a backdated mini-ASLC to Cabinet Office Civil Superannuation to cover death and ill-health benefits
  • work out the employer’s CEP and reinstate the employee into State Second Pension (S2P) from their first day by paying the employer’s and employee’s CEP to NICO for any service that was Contracted Out of the S2P.
  • work out employee and employer partnership pension contributions from the first day of service, and send these backdated contributions to the pension provider with the first payroll run following the member joining partnership.

The table below sets out the cash flows when you have to take unscrambling action.

Cashflows to unscramble contributions for new joiners and rejoiners
Paid toHow cost is metAction by
Refund of nuvos or premium contributions Employee (via payroll)

Offset against payments of premium employee contributions to Cabinet Office Civil Superannuation

Employer/payroll

Refund of ASLCs

Employer

Offset against payments of ASLCs to Cabinet Office Civil Superannuation

Employer/payroll
mini-ASLC

Cabinet Office Civil Superannuation

Employer Employer/payroll
Employee’sCEP NICO

Employee (via payroll)

Payroll
Employer’sCEP NICO Employer Payroll

Backdated employee’s partnership contributions

Pension provider

Employee (via payroll)

Payroll

Backdated employer’s partnership contributions

Pension provider

Employer (via payroll)

Payroll

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Contribution Equivalent Premium (CEP)

4.2.19 Part of the unscrambling process is the payment of a CEP to National Insurance Contributions Office (NICO). alpha, nuvos and premium scheme members are contracted out of S2P. Paying a CEP buys them back into S2P for the period they were defaulted into alpha, nuvos or premium. Contracting Out of the S2P will cease in April 2016.

4.2.20 To understand how to calculate a CEP, please see the guidance available at www.hmrc.gov.uk

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Employee leaves, having chosen partnership, before employer action is completed.

4.2.21 If an employee applies for partnership but leaves before you have completed your action, you must honour the agreement and pay any outstanding contributions for the period the account runs from and to. In cases where someone has left your employment and has been taken off your payroll before you have had time to set up their account, your payroll must:

  • action the account with the application form and pay the age -related contribution,
  • ask the member to pay their contribution direct to the pension provider, and
  • check with the provider that the member has done so.

Your payroll must also find out the amount the member has paid so that they (payroll) can pay any outstanding matching contributions.

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Member wishes to transfer other pension benefits into their partnership account

4.2.22 If a member chooses partnership and wishes to transfer any other pension benefits they may have into it, they must request this by attaching a covering note to the partnership pension provider application form. Alternatively, they can contact the new provider directly. Annex 1D gives the contact details of the partnership providers.

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Ongoing payroll action

4.2.23 Your payroll must send a completed schedule via web based scheduling to the member’s pension provider every time they, (your payroll) pays over contributions.

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Your responsibilities when re-employing pensioners and CSP13

Introduction

4.3.1 Pensioners who receive a pension under the CSP arrangements and who are re-employed by a CSP employer may not earn more, by way of re-employed salary and pension, than they were earning before they retired. Where re-employed salary and pension exceed previous salary, the excess is deducted from their pension. This is known as ‘abatement’. Abatement may apply to members opting for partial retirement. See annex 4G which was originally issued as EPN199 for further information. alpha pensions in payment are not subject to any abatement.

4.3.2 For the purposes of abatement, an annual compensation payment (ACP) is treated in the same way as a pension. All references to pensions or pensioners below also include members with ACPs.

4.3.3 Abatement, where applicable, only operates for the duration of the re- employment.

4.3.4 Members who are over age 75 are not affected by abatement.

4.3.5 Abatement of salary rather than pension can apply to those re-employed after having received a compensation payment under a Compulsory Early Severance (CES) package that included a reserved rights ‘top-up’ payment. This is because the ‘top-up’ payment includes an element of pension. Please see paragraph 4.3.15 for information on how to deal with this group. This does not apply to members who return after 30 July 2007 and join nuvos/alpha they may be subject to a quarantine period.

4.3.6 Abatement applies whether or not the employment is pensionable. This does not apply, however, if a pensioner works less than a total of 15 days in any 91-day period.

4.3.7 You must use the Pensions Questionnaire in your recruitment process to determine eligibility for the pension arrangements (see Section 4.1). The information collected enables you to identify individuals who have a pension or ACP in payment from an employment covered by the CSP arrangements before they are appointed. The Joiner Tool will identify the correct choice of pension(s) available to them.

4.3.8 If you are recruiting an individual who received compensation as a result of the termination of previous employment covered by the CSP arrangements (for example as a result of compulsory early retirement), then their compensation could be affected. Again, the Pension Questionnaire will collect this information and the Joiner Tool will identify the correct choice of pension(s). If the member returns within 28 days then the early retirement award is cancelled and the compensation payment must be repaid.

4.3.9 People who retired or left with a compensation payment/pension were told, as part of their pension notification, that if they become re-employed in employment covered by the CSP arrangements they must tell the new employer about their previous service because of possible abatement. They are also responsible for telling MyCSP, that they are taking up the new employment. However, you have a responsibility to notify the member about possible abatement where they tell you they are receiving a pension and you have the responsibility to tell MyCSP that the pensioner has started work with you. The Joiner Tool will prompt you to take abatement action, where appropriate.

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Appointment actions

4.3.10 You must tell pensioners who are being offered re-employment about the effect of the re-employment provisions of the CSP arrangements on their pension, including abatement, before they take up the new post. We have produced a leaflet on abatement which you should give to any pensioner who is receiving a pension under the CSP arrangements and who is applying for re-employment. The leaflet can be downloaded from our website under Publications: What is abatement?

4.3.11 When offering a post to a CSP pensioner, you should obtain an abatement estimate from MyCSP, using form CSP13 (Estimate). The information from MyCSP will help the pensioner to make an informed choice whether or not to accept the post.

Both CSP13 (Estimate) and CSP13 forms can be found here.

4.3.12 Once the pensioner has accepted the post, you must tell MyCSP using form CSP13.

Important note

You must carry out CSP13 (Estimate) procedure without delay as you must tell the member whether or not their pension (or pay if they have CES Reserved Rights (Also see 4.3.8)) is going to be affected before they decide to accept the post. Not to do so could result in the member accepting the post where they may not have done had they been given the information at the outset.

Equally, you must carry out the CSP13 procedure without delay as there is a potential for large arrears of pension (or salary) abatement being deducted from one month’s pension or salary.

4.3.13 You should email or fax the CSP13 (Estimate) and CSP13 forms to MyCSP:

Email: contactcentre@mycsp.co.uk or contactcentre@mycsp.gse.gov.uk

Fax: 0151 227 1469

MyCSP will send an acknowledgement to let you know they have actioned the form.

4.3.14 However, in the case of those re-employed after receiving CES reserved rights you should obtain an estimate from MyCSP (also see 4.3.8). If the individual accepts the post, you must tell MyCSP. MyCSP will tell you whether or not the member’s pay is affected or they are subject to a quarantine period and you must pass this information to your payroll so that they can impose the necessary deductions from pay.

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Completing the CSP13 (Estimate) and CSP13 forms

4.3.15 To complete the CSP13 (Estimate), you will need to find out the pensionable pay that the pensioner was receiving in their last 12 months of employment before they retired. This is known as the salary of reference. The salary of reference is basic pay plus, where applicable, London Weighting, London allowance, and any other pay additions payable to those who work in a particular place or area. You should not include other allowances, whether pensionable or not. You must ask the pensioner’s former employer for the details of the salary.

4.3.16 Where the former employer is no longer in existence, you will need to get this information from the employer who has taken on responsibility for handling the former employer’s residual affairs.

4.3.17 If you cannot find which employer has taken responsibility, you should write to the Administration Team (Re-employment) at MyCSP for the name of the employer handling the residual affairs.

4.3.18 If the member has been re-employed more than once then the salary of reference is the salary on the last day of service before the member originally retired.

4.3.19 As soon as the pensioner acknowledges that they understand and accept the terms of abatement you must complete box A of the CSP13. You will need to replicate the information used to complete the CSP13 (Estimate).

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Ongoing action

4.3.20 Once the level of abatement (or earnings margin) has been calculated for a re-employed pensioner, it will not normally change during the course of the re-employment, other than an annual increase in line with inflation. The normal annual increase in the person’s re-employed salary will not result in a recalculation of abatement.

4.3.21 However, you will need to complete box B or C of form CSP13 and send it to MyCSP if the person:

  • is promoted or demoted; or
  • increases or decreases their conditioned hours; or
  • benefits from a retrospective pay award that alters either their salary of reference or their salary at the beginning of re-employment; or
  • is fee-paid and there is a change in the rate of fee being paid (other than a general increase);
  • has their pay reduced as a result of long term sick leave

Note: If the member’s pay has substantially increased or decreased for any other reason than shown above you must complete a new CSP13 and send it to MyCSP.

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Resignation

4.3.22 You must complete box D of form CSP13 to notify MyCSP. On resignation, you need to take prompt action to ensure that the abated pension is reinstated as soon as possible after the termination of employment date. You must ensure that you notify MyCSP as soon as you know the termination of employment date.

4.3.23 You will need to consider how you ensure that a CSP13 is completed for every change of circumstance. We suggest that you include a prompt for HR staff on their Staff Advice Notices/Change of Circumstances forms.

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MyCSP action

4.3.24 On receipt of the CSP13 (Estimate) MyCSP will calculate any abatement due as a result of taking up the post offered. They will advise you and the pensioner of the details within five working days of receiving the CSP13 (Estimate).

4.3.25 On receipt of the CSP13 on appointment, MyCSP formally assess whether abatement should apply and write again to the pensioner with the details. They will copy the letter to you within five working days of receiving the CSP13 so that you know it has been done. They will also assess any changes to terms of employment notified by further CSP13s and advise the member of any consequences to their pension.

4.3.27 On receipt of the CSP13 on resignation, MyCSP will reinstate the pension in payment from the resignation date and confirm their action to the pensioner within five working days of receiving the CSP13.

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4.4 Your responsibilities under Automatic Enrolment

(This chapter incorporates guidance previously issued in EPN 343)

Introduction

4.4.1 The Pensions Act 2011 places a requirement on all employers to identify workers who earn over the automatic enrolment earnings trigger, are aged 22 or over, and under State Pension age to be automatically enrolled into a qualifying workplace pension scheme. This includes temporary workers.

4.4.2 Automatic enrolment is being introduced over a period of several years, starting from autumn 2012. Each employer has a date on which they have to begin the process of automatic enrolment. This is referred to as the ‘staging date’. The Pensions Regulator (TPR) will write to the Permanent Secretary (or equivalent) of each employer approximately 12 months prior to their staging date to advise them to prepare for automatic enrolment. TPR will also send out a reminder approximately three months before the employer’s staging date.

4.4.3 The Civil Service already enrols the majority of new entrants into a qualifying pension scheme, and the Minister for the Cabinet Office (MCO) has decided that this will continue irrespective of the wider eligibility criteria in the legislation. This decision has been extended to cover the automatic enrolment of all civil servants not currently in a qualifying pension scheme at the departments’ staging date and at the anniversary date (see following paragraph).

4.4.4 Workers can choose to opt out of the scheme once they have been automatically enrolled. However, under automatic enrolment legislation, departments must re-enrol all workers who are not currently in a pension scheme three years after the initial staging date and at every three year interval following this. This is known as the ‘anniversary date’. Those who have opted out of the Civil Service pension arrangements (CS pension arrangements) must be re-enrolled in the section of the scheme that they would have been in if they had not opted out. Initially, this will be the section that they previously opted out of. However, from 1 April 2015 a alpha is introduced, and the section/scheme an optant out should be enrolled into when they re-enrolled will depend on whether they are fully protected (they will return to their previous scheme), have tapered protection (opting in before or after their tapered enrolment date will see them join their old scheme or alpha respectively), ot have no protection (they will join alpha). MyCSP will be able to assist you in identifying which section of the CSP arrangements to re-enrol optants out into.

Please note: if an employee has opted out within the 12 months prior to the employer’s ‘anniversary date’, they should not normally be re-enrolled until the next ‘anniversary date’.

Once an employer has staged for automatic enrolment, the legislation allows for a member of that organisation to opt back into a scheme once in any 12 month period.

4.4.5 Most Civil Service Departments are signed up to receive CS Employee Policy’s Services. This includes a full suite of supporting products, face-to-face workshops approximately 12 months prior to staging, and six and three months telekits prior to staging. These are at no additional cost to those signed up and CS Employee Policy will contact you to invite you to these events. However, if you have any queries about CS Employee Policy or their services please e-mail: CONTACT.US@CSEMPLOYEEPOLICY.GSI.GOV.UK

4.4.6 MyCSP also offers employers a range of additional services in relation to automatic enrolment, including a suite of Compendia reports and training courses. Please contact your MyCSP Service Delivery Manager for further details.

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What do I need to do?

4.4.7 Employers will need to take the following actions:

  • Enrol all employees not in a qualifying pension scheme into the Civil Service Pension (CSP) scheme from their staging date. (Note: Employees who are members of partnership do not need to be enrolled into the CSP scheme).
  • Enrol all new entrants into the CSP scheme.
  • Enrol other government department (OGD) transferees (but not those on loan) into the CSP scheme if not already a member (or in partnership).
  • Monitor workers who opt out of the pension scheme to re-enrol if they achieve eligibility under automatic enrolment legislation.
  • Re-enrol all workers not in a Civil Service Pension scheme at the three year re-enrolment date and every three years thereafter.
  • Retain specific records to ensure compliance with automatic enrolment legislation.

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Additional Information Non-Civil Service employers

4.4.8 Employers who participate in the CSP arrangements by virtue of being listed in Schedule 1 of the Superannuation Act 1972 (known as Schedule 1 bodies), are not covered by the MCO’s direction referred to in paragraph 4.4.3, above. They may, however, choose to adopt this policy for their own employees.

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Employees with a Partnership Pension Account

4.4.9 Employees who have opted out of the CSP arrangements and opened a partnership pension account instead, do not need to be automatically enrolled into the PCSPS or alpha. This is because partnership is a ‘qualifying scheme’ as defined under the automatic enrolment legislation.

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Lifetime Allowance and Fixed Protection

4.4.10 EPN326 provided information about changes to the Lifetime Allowance and the implications of applying for fixed protection. To retain fixed protection in a defined benefit scheme, such as the CSP, the individual cannot accrue any further benefit. Consequently, the vast majority of those who have applied for fixed protection will have opted out of the CSP. When such people are automatically enrolled or re-enrolled into the scheme, they will have to opt out of the scheme again within one month of being enrolled, or (if later) within one month of their employer telling them that they have been automatically enrolled. Otherwise, they will build up benefits and may lose their fixed protection.

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Members with preserved awards

4.4.11 People who have opted out and have preserved benefits in the CSP must also opt out within one month of being automatically enrolled, or (if later) within one month of their employer telling them that they have been automatically enrolled if they do not wish to build up further benefits in the scheme. This is because there is no minimum qualifying service required for those who already have preserved benefits in the scheme.

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One-person schemes

4.4.12 People who are pensionable in one-person pension arrangements (often operating by-analogy to the CSP arrangements) do not need to be auto-enrolled into the CSP. This is because they are already in a qualifying pension scheme.

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Employees transferred in from another PCSPS employer

4.4.13 If an employee transfers from one CSP employer to another, and they are in the CSP or partnership, their membership of that scheme will continue unchanged. However, if they have previously opted out of the CSP and not joined partnership, the new employer must automatically enrol them into the section of the CSP they previously opted out of. (This does not apply if the person is only on loan from their parent employer.)

4.4.14 Therefore, it is essential that the transferring employer advises the new employer which section of the CSP the individual opted out of previously. In the absence of this information, they should advise what date the individual commenced Civil Service (or Schedule 1) employment, and the date they opted out of the scheme.

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Revised OGD transfer form (OGDTF1)

4.4.15 In order to ensure compliance with automatic enrolment legislation, when an employee transfers between departments, the importing department must ensure that the worker is in a qualifying pension scheme from the first day of employment in the importing department, if they are not already in one.

4.4.16 To help with this, the form employers complete when transferring employees to another employer covered by the Civil Service pension arrangements has been revised. This form can be found in Annex 6B of the Employer’s Pension Guide.

4.4.17 The revised form (OGDTF1) is designed to facilitate the necessary change to current practices. OGDTF1 form is not intended to go via MyCSP but should instead be sent directly from exporting to importing department. The CSP Trans 1 form remains unaffected and should continue to be sent to MyCSP.

4.4.18 Departments should consider their internal security procedures when sharing personal information with other departments, and ensure that the employee has given their permission for this data to be shared.

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Re-enrolment of people who opt out before age 22 and/or whilst earning below the specified minimum

4.4.19 If an employee opts out of the CSP after being automatically enrolled on their department’s staging date, whilst below age 22 and earning less than the specified minimum, they must be automatically re-enrolled once both these criteria are met.

  • If an employee opts out of the CSP (and does not join partnership) below age 22, their employer must automatically enrol them into the CSP once they reach age 22 – irrespective of when they last opted out.
  • Similarly if someone opts out (and does not join partnership) whilst earning less than the specified minimum, they must be automatically re-enrolled if their earnings rise up to or above that minimum.

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Action at three year re-enrolment date (Anniversary date)

4.4.20 All employees who have opted out of the CSP, and have not joined an alternative qualifying scheme, must be re-enrolled by the employer periodically. The default position is that re-enrolment will take place on the third anniversary of the employer’s staging date. However, employers do have some flexibility as to their exact re-enrolment date (further information is available from The Pensions Regulator’s website).

4.4.21 After the introduction of alpha on 1 April 2015, a member should be enrolled into the scheme they are eligible to join on the stagin date. Most members will likely be enrolled into the new scheme, alpha.

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Revised opt out process

4.4.22 To ensure that the opting out process can be managed and monitored and any automatic enrolment obligations met, a revised single opt out process has been introduced, whether or not the employing department has staged.

4.4.23 The employer is now responsible for taking appropriate and timely action to process requests from members to opt out of the CSP, before passing information to MyCSP to update their records. The single opt out process applies regardless of whether or not a department has staged under automatic enrolment, or which scheme the member wishes to opt out of, or their reason for opting out. Please see section 5.9 for more information about opting out process. Annex 5D sets out the refund process and includes illustrative flowcharts.

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Additional information for employers to refer employees to following automatic enrolment

Forms and publications

4.4.24 In addition to the obligation employers have to inform employees about automatic enrolment and the date on which employees have been or will be automatically enrolled, employers should also let members know what other actions they might need to take. Employers should tell employees automatically enrolled that may need to complete:

  • A death benefit nomination form;
  • A partner declaration form (if required);

4.4.25 The forms can be found here

4.4.26 There is an automatic enrolment factsheet for members under publications on the Civil Service pension website that gives an overview of automatic enrolment and what it means in the Civil Service.

4.4.27 More information about the Civil Service pension arrangements, such as copies of the main scheme booklets, overview booklets and other publications about can also be found on the Civil Service website.

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Letters and starter packs

4.4.28 The model appointment letter texts provided in Annex 4B of the Employer Pension Guide have been amended to reflect automatic enrolment. Some letters include a standard generic statement, but for some scenarios, a choice of text has been provided for use depending on whether an employer has staged or not. In these cases, the employer must read the context and choose the appropriate statement to use to fit their situation.

4.4.29 The contents of the starter packs that employers order from the schemes print suppliers have been updated in preparation for automatic enrolment. Generic statements about automatic enrolment are included in the main scheme booklets. The Pension Choices forms NE1, NE2 and RJP were replaced with effect from 15 October with revised versions that include text about automatic enrolment.

Please note: the revised Pension Choices form NE1 no longer give new starters an immediate choice not to join a pension scheme. Employees who do not wish to join or want to opt out will have to complete an Opt Out form and follow the process set out in section 5.9 of the Employer Pension Guide.

4.4.30 Prior to staging under automatic enrolment legislation, departments will continue to order and issue starter packs (and Pension Choices forms) alpha full, NE1, NE2 or RJP as appropriate.

4.4.31 Once a department has staged under automatic enrolment, it will no longer be necessary to order or issue starter pack NE2 for new starters joining on or after the staging date as all employees, including those employed for less than 12 months, will be automatically enrolled in a qualifying scheme.

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