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EPN433 - New CILON calculator from 1 April 2015

Audience:

This notice will be of particular interest to:

  • HR team; and
  • Pension leads

Action:

To:

  • Use the new online CILON tools to calculate compensation in lieu of notice (CILON) for individuals whose last day of service is after 31 March 2015;
  • Recalculate any CILON payments that you may have run previously using the old calculator if it is for an individual whose last day of service is after 31 March 2015; and
  • Note the calculator to be used (i.e. PCSPS or alpha) depends on what scheme the individual was in on their last day of service – even if they would have moved to alpha during their notice period.

Timing:

  • Immediate - the new calculators came into effect on 1 April 2015

Detail

  1. Where someone’s employment is terminated and the full notice period is not worked, compensation in lieu of notice (CILON) is payable on the unworked balance of the notice period.
  2. Previously, there has been a single calculator available on the Civil Service pensions website to enable you to calculate the amount of CILON to be paid, where applicable.  The introduction of alpha means that people leaving who are eligible for a CILON payment may be members of either PCSPS or alpha.
  3. With effect from 1 April 2015, there are now two CILON calculators:

    -   one for people who were active members of the PCSPS on their last day of service (this has been updated from the previous calculator to reflect new factors used to calculate the CILON amount); and

    -   a new calculator for people who were active members of alpha on their last day of service (www.civilservicepensionscheme.org.uk/employers/employers-calculator).
  4. The calculator you should use for a particular individual depends on which scheme they were an active member of on their last day of service - even if they would have moved to alpha during their notice period. For example, a member of the PCSPS who has Tapered Protection and whose tapered alpha enrolment date is 1 June 2015 leaves service on 1 May 2015 and is due CILON for 3 months’ notice, would have their CILON calculated using the new PCSPS CILON calculator, notwithstanding the fact that they would have transferred into alpha if they had actually worked their notice period.

    CILON payments already calculated using the previous CILON calculator
  5. If you have already calculated the CILON payment using the previous CILON calculator for a member of staff whose last day of service is after 31 March 2015, you will need to recalculate their CILON payment using the relevant new calculator.

Contact

If you have a question about the distribution of EPNs contact employerpensionnotice@cabinetoffice.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 MyCSP.