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EPN 470 - Civil Service Compensation Scheme (CSCS) changes

Audience:

  • Pensions Leads and HR Managers
  • Internal Communicatios Managers

Action:

  • To note the changes to the Civil Service Compensation scheme that was laid in Parliament on 8th November and will come into effect from 9th November 2016

Timing:

  • Immediate

Detail:

1)  A new Civil Service Compensation Scheme has been introduced with effect from today, 9th November 2016 - An amendment scheme was laid before parliament on 8th November.

2)  The key features of the changes to the CSCS terms are as follows;

  • the standard tariff for calculating exit payments to be three weeks’ per year of service;
  • Voluntary Exit (VE) capped at 18 months’ salary; Voluntary Redundancy capped at 18 months; Compulsory Redundancy capped at 9 months;
  • to maintain flexibility in Voluntary Exit terms to offer between statutory terms and the standard tariff;
  • to allow employer-funded top-up to pension from age 55 and for this to track 10 years behind state pension age;
  • to offer a partial buy-out  option for employees above minimum pension age where the cash-value of the exit payment is insufficient to fully buy out the actuarial reduction;
  • Compulsory Redundancy notice periods to be 3 months for new starters only; and
  • to protect the lower paid, the minimum salary used for calculating exit payments (the ‘lower paid underpin’) to increase to £24,500.

The impact on existing and upcoming exit schemes

3)  With effect from today, Wednesday 9th November, Cabinet Office can accept applications for exit schemes under new CSCS terms and will endeavour to do so as quickly as possible. Application forms for the CSCS terms can be found within section 6 of the Employer Pension Guide.  Employers should continue to contact redundancyschemes@cabinetoffice.gov.uk to request approval of business cases;

4)  Staff should not now be leaving on the previous (2010) CSCS terms unless they;

     a)  have already formally signed the agreement to leave and will exit the organisation before the end of December (for voluntary terms) or March (for compulsory terms), or;

     b)  have already received specific approval from the Cabinet Office.

Further Information

5)  The website is currently being updated with revised employer guidance/support materials including;

     a)    Annex 6f of the Employer Pension Guide

     b)    Updated Exit Scheme calculators

     c)    Updated What to Expect Guide

6)  The partial buyout calculator is currently in development along with a ‘what to expect’ guide. A further EPN will be sent out in due course to update you on the progress.

7.  If you have any questions please contact Sally.Rowles@cabinetoffice.gov.uk or redundancyschemes@cabinetoffice.gov.uk