Your responsibilities when staff leave before pension age

Contents

6.1 General

Staff leaving before the Scheme pension age
Staff transferring to another employer who is part of the CSP arrangements
Bulk transfers of staff from your employment
Recovering debts from awards
Suggested form of acknowledgement
Duty of care when processing estimates and awards
Financial accountability
Delayed payments caused by industrial action
Recovering the cost of compensation payments
Forfeiting benefits
Who makes the decision on whether a member has forfeited their benefits?

6.2 Resignation or dismissal from the Civil Service

Resignation from the Civil Service
Member leaving with less than 2 years’ service
Paying a preserved award early
Enhanced benefits for members who resign
MyCSP action
Table 2 - Standard action for resignation and dismissal for partnership
Dismissal - being dismissed due to inefficiency

6.3 Early departure and ill health

Civil Service Compensation Scheme (CSCS)
Fixed term appointments
Early departure
Paying CSCS benefits while an appeal against refusal to grant Ill Health Retirement is in progress
Voluntary Exit and Voluntary Redundancy
Compulsory Redundancy
Fixed term appointments
Early Termination of a Fixed Term Contract
Injury Benefit
Redundancy following a TUPE transfer
Staff who had opted out of a previous employer’s pension scheme
Staff who are not eligible to join the CSP arrangements
Re-employment – potential effects on pension and CSCS benefits

6.4 Death of a Civil Servant

Death in service
Steps to follow for partnership members
Death of a classic, classic plus, premium or nuvos member before pension age who has left your employment

6.1 General

Staff leaving before the Scheme pension age

6.1.1 Staff may leave the Civil Service before the scheme pension age (classic, classic plus and premium age 60, nuvos age 65, in alpha this is the later of age 65 or the member's State Pension age) and receive pension and/or compensation payments under the CSP arrangements. You can find information on how to treat staff who are retiring at or after the scheme pension age in Section 7.

6.1.2 We explain below the various different categories of early departure. When the member is entitled to receive benefits payable under the Civil Service Compensation Scheme (CSCS), you will be responsible for meeting the costs of these benefits.

6.1.3 Staff leave the CSP arrangements before the scheme pension age for one of 3 main reasons:

  • Resignation or dismissal - See 6.2
  • Early departure, including ill health retirement - See 6.3
  • Death - See 6.4

6.1.4 You must inform MyCSP of any resignations or terminations of employment at the earliest opportunity, particularly on the death of a member.

6.1.5 A member who leaves with less than 2 years’ service cannot have a preserved award unless:

  • they have transferred benefits into the CSP arrangements from a personal pension scheme or other non-occupational pension arrangement, or
  • they have previous service within the CSP arrangements which qualified for a preserved award, see part 4, chapter I, section 71 of the Pensions Act 1993.

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Staff transferring to another employer who is part of the CSP arrangements

6.1.6 A member transferring between employers who are both covered by the CSP arrangements will remain in the same scheme as long as the break between employments is 28 days or less. MyCSP will set up the member’s record with information given to them by the previous employer’s MyCSP Pension Service Centre.

6.1.7 It is important that the member’s continuity of service is maintained. As long as the break between employments does not exceed 28 days, the 2 periods of employment will be treated as continuous for pension and compensation. The break will be treated as unpaid leave.

6.1.8 When you transfer a member to another employer covered by the CSP arrangements, you should complete form CSP TRANS 1 (at Annex 6A). Send the form to MyCSP who will then transfer the member’s Compendia record and any other relevant paper or electronic records to the new employer’s MyCSP Pension Service Centre.

6.1.9 You should also complete OGDTF1 (at Annex 6B) or a similar template, and send it to the member’s new employer to advise them which part of the scheme – classic, classic plus, premium, nuvos, alpha or partnership - the member belongs to, their contribution rates for partnership if applicable, and details of any added years, AVCs, added pension or EPA. This information enables the new employer to take the correct action.

6.1.10 When MyCSP receives the CSP TRANS 1 from you, they must transfer the member’s Compendia record and all relevant paper or electronic pension records to the right team within 2 months of the transfer date. MyCSP will maintain the PenServer records until that team confirms that the transfer of records has succeeded.

6.1.11 MyCSP may have to examine the member’s HR file so that they can cleanse the Compendia record. Depending on the timing of notification, you may have already sent the HR file to the new employer. You will need to ensure that you have a contact at the new employer so that you can tie up such loose ends without delay.

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Bulk transfers of staff from your employment

6.1.12 A bulk transfer is an arrangement whereby special transfer terms are negotiated to allow pension scheme members to transfer their pension benefits to their new employer’s pension scheme to receive benefits of equivalent value. It often follows from a TUPE transfer or a machinery of Government change.

It covers accrued pension benefits of all the staff that chose to transfer past service to the new pension scheme.

6.1.13 Section 12 gives you detailed guidance on what to do if you are considering a compulsory transfer of staff.

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Recovering debts from awards

6.1.14 There are certain circumstances where you may recover a debt from an award to a member who is leaving early. The Treasury’s document, “Managing Public Money,” (www.gov.uk/government/publications/managing-public-money) explains how and when to recover overpayments. The debt you propose to set off must be legally recoverable, and you may wish to check this with your legal adviser before taking any action. You must explore all other routes to recover the debt before approaching the Cabinet Office, The Pension Schemes Executive.

6.1.15 You must consult Cabinet Office, The Pension Schemes Executive at an early stage. They will give you written authority if they think it appropriate for you to recover the debt from the member’s award. You will then need to liaise closely with MyCSP to ensure the correct action is taken.

6.1.16 Cabinet Office, The Pension Schemes Executive will only give authority to you to exercise set off of a debt where you send them an application accompanied by either:

  • an acknowledgement, signed and dated by the employee of the existence and exact amount of the debt (that is, the amount to be set off against a CSP or CSCS benefit), or
  • a copy of an enforceable order of a County Court or other appropriate court, or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.

6.1.17 You must take care to ensure that any acknowledgement of the debt by the debtor does not constitute a charge or assignment of benefit, which is unlawful under section 5(1) of the Superannuation Act 1972. This states: ‘(1) Any assignment (or, in Scotland, assignation) of or charge on, and any agreement to assign or charge, any benefit payable under a scheme made under section 1 of this Act will be void’.

6.1.18 This also applies where you seek to set off an overpayment of CSCS benefits while an appeal against refusal to grant ill health retirement is in progress (see paragraph 6.3.11 for details).

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Suggested form of acknowledgement

6.1.19 The suggested form of acknowledgement is as follows:

I [member’s name] hereby acknowledge that as at (date) I owe [name of department/organisation] the sum of £ [amount] in respect of [nature of debt].

Signed [member’s signature] Date [date of signing]

6.1.20 Once Cabinet Office, The Pension Schemes Executive, have given you written authority to set off the debt, you will need to copy this to MyCSP will issue the member with a certificate showing the amount of the set off and its effect on benefits under the scheme.

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Duty of care when processing estimates and awards

6.1.21 You have a duty of care in ensuring that your staff who are members of the CSP arrangements receive accurate estimates of pension benefits.

6.1.22 You must have robust procedures in place between yourself; your payroll and MyCSP for transmitting data accurately (see Section 8 for more guidance). You must build in appropriate deadlines for the individual stages of each process to avoid delaying any resulting award. You need to consider the length of time it takes to communicate with the member regarding their leaving options. If you are offering early severance or retirement, for example, you will need to supply the member with an estimate of their pension benefits. Section 6.3 refers.

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Financial accountability

6.1.23 You are responsible for paying for any errors and omissions if:

  • you fail to recover overpayments of benefits
  • you have caused a delay in the paying of pension lump sums
  • you gave incorrect estimate details (and the member committed themselves to financial undertakings on the strength of that information).

6.1.24 If a member claims you have caused undue stress and inconvenience because you or MyCSP have delayed the paying of benefits, you may have to consider discretionary compensation. You will find more guidance by visiting www.gov.uk/government/publications/managing-public-money.

6.1.25 You do not normally have to consider such compensation so long as MyCSP pays the lump sum within one month of the member’s last day of service. However, even though the member may receive their lump sum within this time, you may still have to make a payment if you led the member to expect the lump sum on a certain date.

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Delayed payments caused by industrial action

6.1.26 You do not have to consider paying compensation if the payment of the lump sum is delayed by industrial action. An example of this is where you or MyCSP received information from a member late and it was the direct result of a postal strike.

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Recovering the cost of compensation payments

6.1.27 You cannot recover the cost of compensation payments from Civil Superannuation. But if you have to pay compensation for reasons of policy - for example, when an allowance becomes pensionable retrospectively and a revised award is made - you can charge the payments to Civil Superannuation. Please contact MyCSP for advice.

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Forfeiting benefits

6.1.28 In exceptional circumstances, members forfeit their rights to benefits under the CSP arrangements. They automatically forfeit their benefits if convicted of treason. The Minister for the Civil Service may decide to withhold a member’s benefits, either completely or partly, if they are convicted of:

  • offences under the Official Secrets Act 1911; or
  • an offence connected to the civil servant’s employment that a government Minister certifies as gravely injurious to the State or liable to lead to serious loss of confidence in the public service.

6.1.29 You must not take any action without Cabinet Office, The Pension Schemes Executive’s advice.

6.1.30 Where a potential beneficiary is being investigated and, or has been, arrested for such a crime, any pension or benefit payment should be temporarily suspended until either a conviction has been made, the investigation/prosecution is dropped, or there is an acquittal – in which case the benefits may then be paid. You must inform MyCSP at the earliest opportunity to withhold payment.

6.1.31 Forfeiture may also apply where a member has a monetary obligation arising from a criminal or negligent act in connection with their employment.

6.1.32 Anyone who is convicted of the manslaughter or murder of a scheme member cannot receive any benefits from the scheme as a result of the death. You must contact Cabinet Office, The Pension Schemes Executive at an early stage; we will advise you on the process and will take things forward on your behalf.

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Who makes the decision on whether a member has forfeited their benefits?

6.1.33 The Minister for the Civil Service reserves this function. In practice, Cabinet Office will liaise with the Minister’s office and then let you know the outcome.

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6.2 Resignation or dismissal from the Civil Service

Resignation from the Civil Service

6.2.1 Members who resign with 2 or more years’ qualifying service will continue to have benefits in the CSP arrangements, unless they transfer them to another pension scheme. These benefits are preserved until the member reaches the scheme's Normal Pension Age (NPA). Consequently we usually refer to them as ‘preserved benefits’. They are increased in line with the rise in prices.

6.2.2 We use the term ‘deferred member’ for staff who leave with preserved benefits.

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Member leaving with less than 2 years’ service

6.2.3 Blank

6.2.4 When a member leaves within their first 3 months of service they receive an automatic refund of their contributions (via payroll). If they stay over 3 months but under 2 years they can choose to have a refund of their contributions or to transfer out their accrued pension.

6.2.5 If the member chooses to have a refund of their contributions, MyCSP must put them back in to the State Second Pension. To do this, MyCSP calculates a Contributions Equivalent Premium (CEP). The CEP represents the difference in employer and employee National Insurance contributions that would have been payable if their pension scheme had not been contracted-out. Once MyCSP has calculated the CEP, they notify Capita Hartshead who will pay the CEP from Civil Superannuation. The deduction for NI will change after April 2016, when contracting-out ends.

6.2.6 MyCSP will reimburse the member the amount of contributions they have paid, less tax and the employee element of the CEP.

6.2.7 You cannot be reimbursed for employer contributions (ASLCs).

6.2.8 MyCSP should send all notices of contracted-out employment to NICO within six months of an employee leaving contracted-out employment. However, if MyCSP sends the notice of termination and the CEP after six months, NICO will accept the CEP provided the member has not reached state pension age. If a CEP is not paid, the member has a right to a pension under the CSP arrangements. If no CEP notification has been made to NICO and the preserved pension comes into payment at or after pension age the scheme are liable for any GMP payments.

6.2.9 These arrangements only apply to people who leave your employment. They do not apply to people who you have automatically entered into nuvos / alpha when they join you and who then opt for a partnership pension account within 3 months of starting work. In these cases, you will need to pay a CEP as part of the unscrambling process described in Section 4.2. As you will have already recovered from us all employer contributions (ASLCs) initially paid to the Civil Superannuation for these staff, we will not reimburse the CEP to you.

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Paying a preserved award early

6.2.10 Members who joined the CSP arrangements on or before 5 April 2006 can receive their preserved award before reaching pension age if they are:

  • 50 or over and choose an early payment (actuarially reduced) award; or
  • classic member, in ill health and would have been eligible for medical retirement if they had remained in the Civil Service; or
  • classic member, 50 or over and can demonstrate compelling personal reasons for early payment. The Cabinet Office, The Pension Schemes Executive, may bring a preserved award into payment on an unreduced basis where the member, who is over their minimum pension age, has personal circumstances that prevent them from working. This would not generally include ill health as other rules apply in that circumstance. MyCSP will be able to give further advice.

6.2.11 Members who joined the CSP arrangements on or after 6 April 2006 can receive their preserved award before reaching pension age if they are:

  • 55 or over and choose an actuarially reduced award; or
  • classic member, in ill health and would have been eligible for medical retirement if they had remained in the Civil Service; or
  • classic member, 50 or over and can demonstrate compelling personal reasons for early payment. Cabinet Office, The Pension Schemes Executive, may bring a preserved award into payment on an unreduced basis where the member, who is over their minimum pension age, has personal circumstances that prevent them from working. This would not generally include ill health as other rules apply in that circumstance. MyCSP will be able to give further advice.

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Enhanced benefits for members who resign

6.2.12 You have discretion to offer active members enhanced preserved pension benefits or enhanced pension transfer terms if they resign and their resignation is desirable for management reasons.

6.2.13 You can enhance active members pension benefits or transfer terms by granting them added years’ service or added pension, for which you will have to pay.

6.2.14 MyCSP can advise you of the cost of providing additional service for a particular member. You must ask Cabinet Office The Pension Schemes Executive, to agree to what you are proposing before you make any formal offer to the member. Section 3.4 of the EPG gives more advice on reserved decisions.

Table 1 -Standard action for resignation and dismissal for members in classic, classic plus, premium, nuvos and alpha.

As soon as you learn about a resignation or dismissal, pass the details to MyCSP for appropriate award action (see ‘note’ below)

Tell MyCSP about any members who wish to take or are offered their preserved award early.

Notify your payroll that the member’s service is ending.

  • Records: Keep any records that can affect the member’s pension. You should agree with MyCSP how these records are to be stored.
  • Information: Make a note on the record of any booklets that you provided when service ended, and the date they were supplied.

Note: An ‘award’ for someone resigning with preserved benefits is simply notification of the benefits that they will receive when they eventually retire.

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MyCSP action

6.2.15 MyCSP will, among other things, give members information about:

  • their pension and when it becomes payable
  • the effects of re-employment before their pension age
  • options for transferring their benefits out of the CSP arrangements.

6.2.16 MyCSP will also give information to members leaving with preserved awards on:

  • how and when to claim their award
  • their CSAVCS arrangements, where applicable
  • pensions increase and how it applies to preserved pensions
  • any conditions that apply to the award
  • the allocation arrangements

6.2.17 MyCSP will also provide copies of any relevant scheme booklets or leaflets on yours or the member’s request.

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Table 2 - Standard action for resignation and dismissal for partnership

As soon as you learn of a resignation or dismissal, pass the details to the relevant provider using the partnership change of circumstance form. (According to your agreed processes with your payroll, they can do this on your behalf).

Tell your payroll to stop paying contributions.

Tell MyCSP (via your payroll, according to your agreed processes) so that the Compendia record can be updated.

  • Records: Keep any records that can affect the members’ pensions.
  • Information: Make a note on the record of any booklets that you provided when service ended, and the date they were supplied.
  • Provider action: The provider will write to the member with a leavers pack detailing the arrangements.

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Dismissal on grounds of efficiency

6.2.18 For pension purposes, employees who are dismissed are usually treated as if they had resigned. You can, if you wish, also pay them a lump sum compensation payment as long as they have at least one year’s service. You will meet the cost of the compensation payment.

6.2.19 Blank

6.2.20 Blank

6.2.21 Blank

6.2.22 Blank

6.2.23 Blank

6.2.24 MyCSP, on your request, will calculate the maximum compensation payable on dismissal on the grounds of efficiency (the tariff is the same as for Voluntary Redundancy). You then need to decide how much of this compensation calculation, if any, you want to pay, by following the guidance attached to EPN 471.

6.2.25 If you are dismissing a member on efficiency grounds caused by medical reasons, you must first consider them for ill-health retirement (see Section 6.3 for details).

6.2.26 Blank

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Civil Service Compensation Scheme (CSCS)

6.3.1 The CSCS allows you to pay compensation to members who leave on early departure terms. It is a statutory scheme and gives you authority as an employer to compensate members for losing their job.

6.3.2 CSCS benefits are also payable to optants out of classic, classic plus, premium, nuvos and alpha and those with a partnership pension account.

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Fixed term appointments

6.3.3 See 6.3.14.

CSCS benefits for members who have transferred service in from a ‘By analogy’ scheme

6.3.4 Service transferred in from a ‘By analogy’ scheme, which is one that has the same rules as the CSP arrangements, can only count towards the member’s CSCS benefits, if Cabinet Office approval is given.

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Early departure

6.3.5 There are three categories of early departure. Before you can launch any scheme you will need approval from Cabinet Office. You will need to complete the relevant template at Annex 6C and forward to redundancyschemes@cabinetoffice.gov.uk

See Annex 6F for detailed information about VE, VR and CR.

6.3.6 The categories are:

  • Voluntary Exit (VE) – This can be offered where you wish to reduce staff numbers by offering an early exit scheme or an early exit package to an individual. There is no compulsion on individuals to accept the offer. There is a standard tariff of 1 month’s pay per year of service up to a maximum of 21 months’ pay for those under scheme pension age. Employers may offer less than the standard tariff subject to limits. Tapering of compensation will apply where the member is close to scheme pension age. For those over scheme pension age there is a maximum of 6 months' pay.

    For members who have moved into alpha from one of the other schemes on or after 1 April 2015, the compensation is tapered in relation to their Normal Pension Age (NPA) in alpha. You can waive the 2 year qualifying period or reduce it.
  • Voluntary Redundancy (VR) – These terms must be offered where the employer has begun formal consultation with the Unions about possible redundancies. VR must be offered to all staff at risk of redundancy under that consultation. There is no compulsion on members to apply for VR at this stage but they must be made aware they could be made compulsory redundant (CR) at a later stage. If a member applies but does not initially meet your criteria for release, they cannot be subject to CR terms at a later stage of the redundancy exercise. Members in this position will be entitled to the VR terms. There is a standard tariff of 1 month’s pay per year of service up to a maximum of 21 months’ pay for those under scheme pension age. Tapering of compensation will apply where the member is close to scheme pension age. For members over scheme pension age there is a maximum of 6 months’ pay. You can waive the 2 year qualifying period or reduce it.

    For members who moved into alpha from one of the other schemes on or after 1 April 2015, the compensation is tapered in relation to their Normal Pension Age (NPA) in alpha.
  • Compulsory Redundancy (CR) – Before redundancy notices can be issued you will need to have gone through the Cabinet Office Protocol on redundancy (2016 Protocol – Civil Service Redundancy Principles) or a similar process. The VR scheme already offered must be linked to the CR scheme, covering the same staff. Any member of staff who was turned down for VR and is later selected for CR under the linked scheme must receive VR terms. This protection does not extend to other CR schemes unless the individual has volunteered for the relevant preceding VR scheme. There is a standard tariff of 1 month’s pay per year of service up to a maximum of 12 months’ pay for those under scheme pension age. Tapering of compensation will apply where the member is close to scheme pension age. For those over scheme pension age there is a maximum of 6 months' pay.

    For members who moved into alpha from one of the other schemes on or after 1 April 2015, the compensation is tapered in relation to their Normal Pension Age (NPA) in alpha.
  • Ill health retirement (IHR) – you can grant members of any age ill health retirement if the scheme medical adviser, HML, believes their breakdown in health is likely to be permanent and prevent them from carrying out their work. The Ill Health Retirement Procedural Guidance for Employers (which is in Annex 6J), provides further information. Under alpha, premium, nuvos and classic plus there are two tiers of benefit payable depending upon whether the member cannot do their own job or cannot work again in any capacity.

Please note: if a member is due to be moved into alpha while they are in the process of an IHR application (or an appeal against a decision to turn down their application) you must not move the member until you are aware of the final decision. They must have exhausted all their options to appeal.

6.3.7 Where the member does not meet the Ill Health Retirement criteria you may consider dismissing them on the grounds of efficiency (See the Civil Service Management Code). The following paragraphs, tell you of the steps to take to guard against the possibility of overpaying CSCS benefits to a member whose has appealed against your decision not to give them ill health retirement.

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Paying CSCS benefits while an appeal against refusal to grant Ill Health Retirement is in progress

6.3.8 You may decide to terminate someone’s employment in circumstances where they will receive immediate payment of CSCS benefits and you know that they have appealed against your decision not to give them ill-health retirement. If you do, you should pay part of the CSCS lump sum equal to the lump sum that they would receive on Ill Health Retirement. Before doing so, you should obtain a written acknowledgement from the member. Paragraph 6.3.11 refers. Tell MyCSP that the member has an ill health retirement appeal outstanding.

6.3.9 Should the appeal fail, you can pay the balance of the CSCS lump sum. You will not have to pay interest as this is a discretionary payment.

6.3.10 If the member’s appeal succeeds, write to TPSE for approval to set off the CSCS benefits against their ill-health retirement benefits. Include a copy of the member’s acknowledgement of the debt.

6.3.11 Suggested form of acknowledgement

I, [member’s name], hereby acknowledge that, should I be granted Ill Health Retirement, I will owe [name of department/organisation] £[amount] which is equal to the sum of Civil Service Compensation Scheme benefits I have/will have received in respect of the termination of my employment.

Signed [member’s signature] Date [date of signing]

Table 1 below gives guidance on the actions that need to be taken when carrying out an Exit Scheme. There is a ready reckoner at Annex 6G which shows the estimated costs of Voluntary Exit, Voluntary Redundancy and Compulsory Redundancy both the compensation lump sum and the cost of buying out the reduction for earlier payment.

Table 1 CSCS – Step by step for Employers

In all cases:

Employers need to consider the terms they wish to offer their staff. There is an employer calculator to help you to estimate costs. You also need to determine the sift criteria to use and ensure that all member data is current and correct.

Obtain Cabinet Office approval to run an Early Exit Scheme (see Annex 6C for the appropriate application form). You should send your requests to redundancyschemes@cabinetoffice.gov.uk

If your scheme is approved you will be given a Scheme Identifier which you will need to give to your MyCSP Service Delivery Manager.

Contact your MyCSP Service Delivery Manager to advise them you have authority to run an Early Exit Scheme and arrange to discuss numbers involved and agree timelines and handling arrangements. Once agreed you will be asked to sign a ‘Work Request Form’ that your MyCSP Service Delivery Manager will complete with you.

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Voluntary Exit and Voluntary Redundancy

1. You will need to obtain the relevant scheme guidance and information from the Civil Service Pensions website. Some materials such as calculators for employees to use are not on the website – you should contact MyCSP for these.

2. There is a Step-by-Step guide for members which you can use as the basis for your own guidance. This can be found at Annex 6E.

3. Ask staff for expressions of interest from your employees. You must:

  • tell them how to apply, and how the process will work (see step by step guide) with return and contact details;
  • give them a deadline date;
  • make available (e.g. on your intranet):
    • the appropriate employee compensation calculator for the scheme you are offering;
    • Compensation Scheme Information Form (CSCS1);
    • Voluntary Exit / Voluntary Redundancy Scheme guide (as appropriate);
    • Other materials as required from the Civil Service Pensions website.

4. You must make the appropriate employee compensation calculator available for your staff to use. Employees will need to have details of their current service and pay. In most cases, pension scheme members will be able to identify their current service from their Annual Benefit Statement (ABS). If an ABS has not been issued, you may have to deal with enquiries from the employees. If however, you publish your benefit statements online, you will need to advise employees how to access them.

5. Note: the Annual Benefit Statement service figure will not be relevant if the scheme member has transferred in or aggregated any service, or if they are buying added years or added pension. The ABS includes all service qualifying for a pension, but the compensation payment is based only on current service as defined in section 5.d of Annex 6F.

6. If the employee is interested they must complete a Compensation Scheme Information Form (CSCS1) which supports their expression of interest in the scheme and asks them for pension information. This information will enable MyCSP to include appropriate information in their quote.

7. Employees must return the CSCS1 forms to you (the employer) by the required deadline.

8. After the deadline you will need to consider all the applications and decide who meets your sift criteria as appropriate.

9. Send the CSCS1 forms that have passed your sift to MyCSP with a master list of the employees selected. You should have agreed with your MyCSP Service Delivery Manager how this is to be done, and the timescales for processing.

10. You will need to tell any applicants who have not been selected they will not receive a quote.

11. You will receive quotes and costs from MyCSP for all the employees selected.

12. The quotes will include a covering letter, information to support the employee’s circumstances, a statement of the compensation benefits, and any relevant pension’s information. Information will be provided for those who have reached minimum pension age regarding taking reduced pension benefits or buying out the reduction. The employee will have some choices to make, on how they wish their benefits to be paid by completing a Compensation Choice Form

13. You must send the quotation, Compensation Declaration Form and Options form to the employees concerned. Again employees must return the completed forms to you (the employer) by the required deadline.

14. Once all the forms have been received from the employees, you may need to do another sift if your offer is oversubscribed. You also need to remove those that have declined or those that you cannot afford. You must tell these employees that they have not been successful and destroy all paperwork when the exercise is complete.

15. You must send the remaining Compensation Declaration Form and options form to MyCSP by the agreed deadline, for processing - again using the method agreed with your MyCSP Service Delivery Manager.

16. MyCSP will send you a bill when the payments have been processed.

17. You may receive revised costs following any revision of pension and compensation payments.

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Compulsory Redundancy

1. You cannot give notice of Compulsory Redundancy unless you have already offered the person Voluntary Redundancy.

2. Depending on the numbers involved, you may wish to arrange with your MyCSP Service Delivery Manager that you check those employees’ data to make sure that it is as accurate as possible, and then arrange to issue quotes with the notice of Compulsory Redundancy so that staff have the information immediately.

3. If there are issues with your data, or if the numbers involved are too great, you will need to tell the staff who are to leave and ask them to complete the Compensation Scheme Information Form (CSCS1) to enable MyCSP to produce the compensation payment quote

4. You will need to obtain the Compulsory Redundancy scheme guidance. There is also a step–by-step guide (at Annex 6E) which is customised to reflect your own arrangements, contact points and deadlines (the Step–by-Step is only appropriate if you are not issuing immediate quotes which explain the process to the employee)

5. You must:

  • tell them how the process will work (see step–by-step guide) with return and contact details
  • give them a deadline date
  • make available (e.g. on your intranet):
  • the Compulsory compensation scheme employee calculator (for information) (optional depending on agreed arrangements)
  • Compensation Scheme Information Form (CSCS1)
  • Compulsory Redundancy Scheme guide
  • Other materials as required from the Civil Service Pensions website

6. If you are unable to issue quotes immediately with the notice of Compulsory Redundancy, you could make the Compulsory Redundancy employee calculator available for your staff to use. Employees will need to have details of their current service and pay. In most cases, pension scheme members will be able to identify their current service from their Annual Benefit Statement (ABS). If an ABS has not been issued, you may have to deal with enquiries from the employees. If however, you publish your benefit statements online, you will need to advise employees how to access them.

7. Note: the Annual Benefit Statement service figure will not be relevant if the scheme member has transferred in or aggregated any service, or if they are buying added years or added pension. The ABS includes all service qualifying for a pension, but the compensation payment is based only on current service.

8. If immediate quotes are not issued: The employees must complete the CSCS1 form and return them to yourselves (the employer. If you do not receive them you should continue with the redundancy

9. When all CSCS1 forms have been returned you will need to forward them to MyCSP with a master list of the employees selected. You should have already agreed how these are to be sent with your MyCSP Service Delivery Manager.

10. You will then receive quotes, Compensation Declaration Form, option forms and costs from MyCSP.

11. You must then send the quote, Compensation Declaration Form and Options form to the employees. Again the employee must send the completed forms to you (the employer) by the agreed deadline. If they refuse you should continue with the process and pay a lump sum compensation payment with preserved award.

12. Once you have received all the forms from the employees, you must send the Compensation Declaration Form and the options forms to MyCSP for processing, again using the method agreed with your MyCSP Service Delivery Manager

13. MyCSP will send you a bill when the payments have been processed.

14. You may receive revised costs following any revision of pension and compensation payments.

MyCSP action

6.3.12 MyCSP will, on your instruction, give members information on:

  • their pension, including taking it early
  • buying added pension
  • the effects of re-employment with an employer who participates in the CSP arrangements
  • transfer arrangements (members lose the right to transfer their benefits once they come into payment)
  • benefit payment procedures and voluntary deductions from pensions
  • taxation of pension benefits
  • the allocation arrangements (classic members who are not being medically retired only).

6.3.13 MyCSP will confirm with the member that their death benefit nomination is up to date.

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Fixed term appointments

What happens at the end of a Fixed Term Contract?

6.3.14 A fixed term employee whose contract is terminated on the expiry date on the grounds of redundancy may be entitled to compensation under the scheme. The expiry of a fixed term appointment is not automatically a dismissal on the grounds of redundancy and you should consider taking legal advice on this point. Where the termination is on the grounds of redundancy, TPSE, Cabinet Office approval for making a payment is not required, and nor are you required to follow the procedures set out in the Cabinet Office Protocol for handling surplus staff situations. In addition, the requirement to offer Voluntary Redundancy before making an employee Compulsorily Redundant does not apply where a fixed term appointment is terminated on its expiry date. As a matter of good practice you should advise the employee when nearing the end of their contract that it will not be extended

6.3.15 As long as the fixed term employee has at least 2 years qualifying service and is being dismissed for redundancy, they will receive the same compulsory compensation terms as a permanent member. You should notify MyCSP in the normal way asking for Compulsory Redundancy terms and giving a Scheme Reference number CR (name of employer e.g. DWP) FTAE (CR DWP FTAE). No compensation is payable for contracts under 2 years.

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Early Termination of a Fixed Term Contract

6.3.16 If you propose to terminate a fixed term contract early for redundancy, you must, first make an offer to that employee for a departure using Voluntary Redundancy terms (including the giving of 3 months notice). You will not require Cabinet Office approval and should notify MyCSP in the normal way asking for Voluntary Redundancy terms and giving a Scheme Reference number of VR (name of employer e.g. MOD) FTAM (VR MOD FTAM). Where such offer is not accepted, you can go straight to Compulsory Redundancy without seeking Cabinet Office approval. You should notify MyCSP in the normal way giving a scheme reference number CR (name of employer) FTAM (CR MOD FTAM).

6.3.17 If the employee’s contract stipulates a notice period for early termination, they will receive the same Compulsory Redundancy terms under the new CSCS arrangements as a permanent member, with the appropriate notice period stipulated in the contract.

6.3.18 If the employee’s contract does not stipulate a notice period for early termination they should receive the better of the Compulsory Redundancy terms under section 12 of the CSCS or section 8 of the CSCS (the compensation payment under section 8 will be calculated by Government Actuary’s Department (GAD).

6.3.19 Those on a fixed term appointment can be considered for early departure under a departmental wide Voluntary Exit or Voluntary Redundancy scheme. If accepted they must be treated the same as permanent members and the normal terms will apply. Approval from TPSE, Cabinet Office will be required for the scheme, if approved, the scheme will be given a scheme reference number, this number should be used for permanent and fixed terms employees when requesting quotes from MyCSP.

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Injury Benefit

6.3.20 A person who has suffered an injury that qualifies under the Civil Service Injury Benefit Scheme who then leaves on Voluntary Exit, Voluntary Redundancy or Compulsory Redundancy is entitled to ask for injury benefit.

This applies to those who leave before their pension age and those leaving at or after their pension age. The usual process for determining injury benefit entitlement applies. Employers need to ask MyCSP to ask the Scheme Medical Adviser to assess the extent to which the person’s injury has impaired their earning capacity and whether apportionment is appropriate.

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Redundancy following a TUPE transfer

If you have any questions about TUPE and the CSCS, please email cspsemployerenquiries@cabinetoffice.gov.uk with “CSCS and TUPE” in the title.

6.3.21 Under review

6.3.22 Under review

6.3.23 Under review

6.3.24 Under review

6.3.25 Under review

6.3.26 Under review

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Staff who had opted out of a previous employer’s pension scheme

6.3.27 Under review

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Staff who are not eligible to join the CSP arrangements

6.3.28 Under review

6.3.29 Under review

6.3.30 Under review

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Re-employment – potential effects on pension and CSCS benefits

6.3.31 Rejoining the CSP arrangements may affect a member in a number of ways if they had previously left with an award. Your recruitment process must identify individuals who are receiving or have received their benefits from an employment covered by the CSP arrangements before they are appointed using the Pensions Questionnaire and Joiner Tool. (available on the Employer section of the website)

6.4 Death in service

6.4.1 As soon as you learn of a death in service, you must contact your payroll and MyCSP immediately and tell them of the death. (For partnership members, please follow the steps in paragraph 6.4.5.) MyCSP needs to know information such as next of kin and the name of the personal representative (this is a person who produces a Grant of Probate of Will or Letters of Administration or, in Scotland, Confirmation of Executor). MyCSP will ask you for any information they may need. We advise your HR contact who deal with such sensitive issues to contact MyCSP to find out:

  • what information they usually require, and
  • their process for handling matters concerning the deceased’s pension benefits.

This will then help the Welfare Officer explain the role of MyCSP to the next of kin/personal representative.

6.4.2 You will need to get evidence of the death, such as the death certificate. If no death certificate is available, you must make your own checks. This is to make sure that the death has taken place. You may check, for example, by getting evidence from the coroner or police that they are satisfied that the person has died.

6.4.3 MyCSP pay the death benefit immediately where there is proof of death and a valid nomination form. Where there is no valid nomination, they will pay the death benefit to the personal representative.

6.4.4 As well as the death benefit, MyCSP may pay family benefits to the legal widow or widower, civil partner, children and other dependants of the member.

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Steps to follow for partnership members

6.4.5 You must tell your payroll of the death as soon as possible. Your payroll must then complete a partnership ‘change of circumstances’ form immediately and send it to the appropriate pension provider. You must also tell MyCSP of the death as soon as possible so that they can work out any benefits for the member’s dependants.

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Death of a classic, classic plus, premium, nuvos or alpha member before pension age who has left your employment

6.4.6 If a classic, classic plus, premium, nuvos or alpha member has left your employment and dies before they reach pension age, MyCSP works out and pays the death benefits. The benefits are based on the member’s award at the time that they left your employment. MyCSP pays the death benefit lump sum to the nominee or the legal representative, as appropriate. They will also pay any pensions that may be due to surviving dependants.

6.4.7 If you receive any calls regarding a deferred member’s death benefits, you should refer the caller to MyCSP.

6.4.8 If the member was in either classic or classic plus and not married when they left your employment and remained unmarried until they died, a refund of family benefits contributions may be payable. This type of refund is commonly known as a WPS refund. It does not form part of the death benefit. The representative of the deceased member must apply for it separately, in writing, to MyCSP. You must pass any written applications that you receive to MyCSP.

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