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EPN398 - 2015 Pensions Changes - Options Exercise - Planning and Preparation

Audience:

This notice will be of interest to:

  • HR Managers; and
  • Pension Leads

Action:

To read the below guidance and take action to plan and prepare for the Options Exercise.

Timing:

Immediate

  1. This EPN outlines the key things Employers need to take into account when preparing for the Options Exercise.
  2. What is the Options Exercise?
    The Options Exercise is where members who are eligible for Tapered Enrolment are asked to make a decision about whether to move into alpha at their Tapered Enrolment end date, or on 1 April 2015. The choice will be explained in the members' Options Packs.
  3. What is Tapered Enrolment?
    'Tapered Enrolment' is a sliding scale where members who were between 10 years and 13.5 years from their Normal Pension age on 1 April 2012 will go into alpha at a date later than 1 April 2015. The length of time members stay in their existing scheme is variable and depends on their age but will be between 2 months and 6 years 10 months from 1 April 2015. The options exercise will give members the choice of retaining their tapered enrolment or moving to alpha on 1 April 2015.
  4. What will the Options Pack contain?
    The Options Pack will contain:

    -   A personalised Statement showing the member's estimated benefits at current Normal Pension Age and their alpha Normal Pension Age. The statement includes a reply slip and return envelope.

    -   A 'Your Choice' booklet to guide the member through the Options Statement and signpost them to more information and tools that will help the member to make an informed choice.
  5. Options Calculator and Video
    We will give members an Options Exercise calculator that allows them to estimate their personal projected pension benefits with or without Tapered Enrolment. The calculator also allows members to estimate what their benefits will be if they retire at a date different to their current or future Normal Pension Age. This estimate will show the difference between retaining tapered enrolment or moving to alpha on 1 April 2015.
  6. In addition to this we will publish a supporting video to explain the Options Exercise on our website.
  7. So members can access the calculator and video in the work place, your organisation may need to make IT changes. EPN395 tells you the system requirements.
  8. How are the Options Packs being distributed?
    We have confirmed with you how you would like your members to be sent their options pack. We will send them either direct to members or you will take delivery to distribute.
  9. Will you tell us who you are sending Options Packs to?
    Yes, in the week beginning 22 September 2014 we will tell you which of your members we will be sending a pack to. We will send this information to the 2015 pension lead in your organisation. This report will include name and national insurance number. We will send it to you by secure email. We are aware of special considerations for some employers for data transfer from lessons learned during the data cleanse exercise. But please contact us at 2015employers@cabinet-office.gsi.gov.uk if you have any concerns.
  10. Will you confirm the addresses the Options Packs are being sent to?
    No, you have been responsible for updating address details as part of the data cleanse exercise and the last interface.
  11. Should we verify what Options Packs you are distributing?
    Yes, when we give you the list of who the Options Packs are going to please check if:

    -   the member is still in employment;
    -   if the member has died between the last interface date and the Options Pack being distributed; or
    -   if you think we have missed someone who should be sent an Options Pack based on the Tapered Enrolment criteria.
  12. What is the Tapered Enrolment criteria?

    Age

    -   Between 10 and 13.5 years from NPA on 1 April 2012
    -   Remember members may have a personal NPA, which is greater or less than the NPA of the scheme that they are in. Employers should hold these records. MyCSP will not be able to tell you if a member has a personal NPA.

    Presence check
    A member must have been:

    -   present in the PCSPS or on a qualifying break on 31 March 2012;
    -   present in another Public Service Pension scheme or on a qualifying break on 31 March 2012;

    AND

    -   active in the PCSPS for at least one day between 15 August 2014 and 30 September 2015.

    If you find that you have any issues with distribution please tell 2015employers@cabinet-office.gsi.gov.uk.
  13. We have not collected records of Public Service history yet, how do we assess eligibility for the Options Exercise?
    We anticipate these will be exception cases. We have run an exercise to try to find members with previous Public Service who may be eligible for an Options Pack as they were present in another Public Service pension scheme. Please tell us and we will assess whether we should send them an Options Pack.
  14. Should we verify that the members have received the Options Packs?
    We do not require you to do this but we believe some employers are planning to do so.
  15. Should we check the contents of the Options Pack for accuracy?
    No, you must not open the Options Packs for quality checking. This information is personal to the member. If the member has any questions about the data in their Options Pack they should contact the member helpline given in the pack.
  16. Will we have to pay for the distribution of the Options Packs?
    We will pay for the Options Packs to be sent to the requested address. However, if you have opted to manage the distribution we are not responsible for any onwards distribution costs.
  17. Will you confirm what decision the member made?
    Yes, we will confirm member decisions the member made:

    Employers
    -   In January 2015 we tell you what decisions your members have made.
    -   This will include the members name, national insurance number and alpha enrolment date. This alpha enrolment date will either be 1 April 2015, or their Tapered Enrolment date.

    Members
    -   In January 2015, we will confirm to the member what decision they made.
  18. We are managing the distribution, what other things do we need to consider?
    Do you have a plan in place to distribute the Options Packs?

    Employers must distribute the Options Packs as quickly as possible, so members are not disadvantaged with the time they have to make their decision. You may wish to consider:

    -   Are you holding drop-in collections?
    -   Will you be sending the Options Packs in the internal mail? Is your internal mail secure?
    -   Will you be sending the Options Packs to members via recorded delivery after we have sent them to you?
    -   Can you be sure the Options Packs will arrive with the members as quickly as possible?
    -   Have you considered members who are on maternity leave, career breaks, secondment, working abroad or on long term sick etc?
    -   Have you told your post room of the delivery so you can obtain the Options Packs as quickly as possible and minimise any distribution issues?
    -   Will you ask for signatures? We will not be asking for evidence of this but some employers are planning to ask members to sign for their packs for an audit trail.
    -   Have you organised secure storage? The Options Packs contain sensitive information. You need to think about Options Packs ending up in the wrong hands.
  19. How do we manage any Options Packs that need to be returned?
    Please return Options Packs to St Ives who sent out the packs. The return address is on the reverse of each envelope. Please mark up the envelope of the Options Pack -

    - L = Left
    - R = Refused
    - D = Deceased
    - U = Unable to locate
    - N = New post within Civil Service. Indicate the new employer if known.

    It is important that you do not write over the envelope window.
  20. What do we need to communicate to members?
    Please signpost members to the member FAQs, Options Exercise Calculator and Options Exervise Video.

Contact

If you have a question about the distribution of EPNs or you need to receive them in a different format contact employerpensionnotice@cabinet-office.gsi.gov.uk.

You can find electronic copies of the Employer Pension Guide, all current EPNs and forms on our website.

This notice is for employers and should not be issued to scheme members.

If members have a question about their pension they can find information on this website or by contacting your Pension Service Centre.