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EPN438 - Civil Service Compensation Scheme - Changes to Controls

Audience:

This notice will be of interest to:

  • any staff connected with managing early exit exercises

Action: To

  • note the changes in the controls process for exits;
  • ensure the use of the new forms and guidance.

Timing:

  • Immediate

Detail

  1. Changes in the controls process for all exit schemes

    The Minister for the Cabinet Office (MCO) has decided to make two further changes to the Civil Service Compensation Scheme (CSCS) controls process. Firstly the MCO will personally consider business cases for large exit schemes. A large scheme is defined as a planned exit of 20 or more staff. Secondly, for all schemes employers must consider people against at least three broad criteria; value for money, cost and the retention of key skills. This EPN sets out the detail on these changes and also introduces revised application forms. These changes take place with immediate effect.
  2. Criteria for approving exits

    There has been general concern that in the past Employers have not always properly considered the full implications on their business of their exit schemes. Due to these concerns the MCO is keen that Employers can demonstrate they have considered at least three broad criteria when choosing staff to exit their organisation. It continues to be the case that Employers can determine the exit criteria but the Minister expects that all business cases they send to the Cabinet Office for approval should demonstrate how they are applying three broad criteria. 

    These are:

    Cost – how much does the exit cost?  Lower costs exits should be preferred over those with a more significant expenditure attached.

    Value for money – is making a paid exit the most cost effective way of resolving the issue?  Is this case the most efficient use of tax payer money?  Will the exit allow savings to be made in a reasonable time scale? Does offering employer top up or standard tariff for Voluntary Exit offer best value for money?

    Retention of key skills – does this person have skills/abilities/knowledge the Employer’s business need over the coming months and years?
  3. This revised guidance on exit controls will be incorporated in Chapter 6 of the Employer Pension Guide (EPG Chapter 6).
  4. Scrutiny of exit schemes

    Employers will be aware that all schemes (except in especially agreed circumstance) need Cabinet Office approval before they are run and this remains the case. Employers can now expect greater scrutiny on any planned exits of 20 or more staff. These business cases will be scrutinised by the MCO against the three broad criteria described above.
  5. The general process for making applications remains unchanged. Applications for all schemes and high value exit cases should continue to be sent to redundancyschemes@cabinetoffice.gov.uk. There are new forms, which are at annexes A and B of this EPN. There is guidance on how to complete the forms at annex C. Cases sent on incorrect forms will be returned for re-submission on the correct form. Cabinet Office is committed to turning round applications as efficiently as possible, and the MCO has made it clear that there must be a smooth process in place so as not to delay approval of exit schemes. However, it is likely that the MCO’s involvement will slightly extend the process but we will do everything we can to smooth the passage of applications.

Contacts

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.