Change in Working Patterns
This guide provides information about how changes in working patterns, could impact your pension.
This guide provides information about how changes in working patterns, could impact your pension.
The impact on your pension will vary depending on what scheme you’re in.
Any change in working patterns or breaks in service need to be agreed with your
employer.
To enable you to understand how your pension may be affected by any change in working
pattern, you need to know how it is worked out.
Your classic pension = 1/80 x pensionable earnings x reckonable service
Your premium pension = 1/60 x final pensionable earnings x reckonable service
Your classic plus pension is worked out like classic for service up to 30 September 2002, and in premium for service from 1 October 2002, but using your final pensionable earnings in both parts of the calculation.
Your nuvos pension = 2.3% x your pensionable earnings each year up to 31 March, and is adjusted each year in line with rises in the cost of living.
Your alpha pension = 2.32% x your pensionable earnings each year up to 31 March, and is adjusted each year in line with rises in the cost of living.
Your employer puts money into your partnership pension account, and you can choose
whether you wish to contribute as well. If you do make any contributions, your employer will match your contributions up to an additional 3% of your pensionable earnings.
Contributions are invested for you by the provider. You can use the resulting pot to fund your retirement or to leave it to someone in the event of your death.
When you retire your options include:
If you choose to buy an annuity, the amount of your pension will depend on:
Part-time working is anything less than full time.
Working part time will reduce your pension by reducing your reckonable service.
Your pension is based on your reckonable service and your full-time equivalent pensionable earnings.
Emma is in premium. Her full time equivalent earnings are 27,000 a year and her full
time equivalent hours are 36.
Her part-time pensionable earnings (24 hours a week) are £18,000 a year (24/36ths of
£27,000).
If she works for 6 years, she will build up 24/36 x 6 = 4 years’ reckonable service. Her
pension would be worked out as her actual service (4 years) x 1/60 x her full-time
equivalent pensionable earnings (£27,000) = £1,800.
Tom is in classic and has worked full time (36 hours) for the last 15 years. His current full-time salary is £25,000. He now wants to work part-time doing 24 hours a week.
He has already built up 15 years’ reckonable service and after, for example, 3 years
working part-time, he would have built up another 24/36 x 3=2 years’ additional service,
bringing his total reckonable service to 17 years. His pensionable earnings are still
£25,000 (even though his actual part-time earnings are £16,666) so he could anticipate
a pension of 17/80 x £25,000 = £5,312.50 and a lump sum of 3 times his pension which
comes to £15,937.50.
You build up pension by adding 2.3% of your actual pensionable earnings from each scheme year to your nuvos pension. Your nuvos pension is adjusted in line with the cost of living each year. If your pay reduces as a result of working fewer hours, then the pension you earn will be reduced.
You build up pension by adding 2.32% of your actual pensionable earnings from each scheme year to your alpha pension. Your alpha pension is adjusted in line with the cost of living each year. If your pay reduces as a result of working fewer hours, then the pension you earn will be reduced.
In classic, you will receive an automatic lump sum. This is calculated as 3 x your pension, so if you reduce your reckonable service by working part-time it will reduce your pension and automatic lump sum.
In premium, nuvos and alpha, you can give up some of your pension to provide a lump sum. If you reduce your pension by working part time, it will reduce the maximum lump sum you can take (as it is a multiple of your pension).
In classic plus, you will receive an automatic lump sum (for service up to 30 September 2002). This is calculated as 3 x your pension, so if you reduce your reckonable service by working part-time it will reduce your automatic lump sum. No automatic lump sum is payable for service from 1 October 2002 onwards. However, you can choose to convert some of your pension into a lump sum. This is calculated as a multiple of your pension, so if you reduce your pension by working part time, it will reduce the amount of lump sum you can take.
If your employer agrees that you can temporarily reduce your working hours on medical
grounds and you are eligible to sick leave on full or reduced pay, your reckonable service will be worked out as if you had not reduced your hours. However, if you are not eligible to sick leave on full or reduced pay then only the actual hours worked would reckon for pension purposes.
Term time or seasonal working means working full or part-time hours, but for less than the full year.
Your pensionable earnings used to work out your pension are the full-time equivalent,
regardless of how many hours you work. Your reckonable service for classic, classic plus and premium is worked out by working out how many hours you work in a year.
Reckonable service = Total hours worked each year / 52.2 x Weekly full-time hours for your grade
You build up pension by adding 2.3% of your actual pensionable earnings from each scheme year to your nuvos pension, so if your pay reduces as a result of working fewer hours your pension will be reduced.
You build up pension by adding 2.32% of your actual pensionable earnings from each scheme year to your alpha pension, so if your pay reduces as a result of working fewer hours, your pension will be reduced.
Many Civil Service employers offer forms of flexible and shift working. This usually means that you work a fixed number of hours each week, but you can choose when you work these hours, within any limits set by your employer. If you work full-time hours, your pension will not be affected. If you work less than full-time hours, see ‘part-time working’ section 2.
Flexible working also covers compressed working. For example, some employers allow their staff to work full time-hours in either a four day week, or a nine day fortnight. Compressed working does not change your total working hours therefore your pension is not affected.
Each period of service will be worked out and added together to give your total pension. (These examples are based on a 36 hours week)
| Full-time working 10 years |
(10 x 1) | = | 10 years reckonable service |
| Part-time working 6 years working 20 hours a week |
(6 x 20/36) | = | 3.33 years reckonable service |
| Part-time working 3 years working 3 full days a week |
(3 x 3/5) | = | 1.8 years reckonable service |
| Full-time working 8 years |
(8 x 1) | = | 8 years reckonable service |
| Total | = | 23.13 years reckonable service |
You build up pension by adding 2.3% of your actual pensionable earnings from each scheme year to your nuvos pension, so if your pay reduces as a result of working fewer hours your pension will be reduced.
You build up pension by adding 2.32% of your actual pensionable earnings from each scheme year to your alpha pension, so if your pay reduces as a result of working fewer hours your pension will be reduced
If you take a career break (agreed with your employer), you will not build up any pension for the duration of your career break. As such, you will not have to pay pension contributions during that time.
If you return to work, you will return to whichever scheme you were a member of when you left in most cases. If you were due to transition to alpha, this will still take place. Depending on how long your career break is, you may wish to look at ways of boosting your pension to make up for the missed pension benefits. There is further information about ways to boost your pension on this website.
No.
Your employer will not make any contributions to your fund while you are on a career break.
As it is your investment fund, you can decide if you wish to make voluntary payments to
increase the value of your fund while you are on your career break.
If your additional leave is agreed as paid leave, your pensionable earnings during this leave period will be your normal rate of pay. You will continue to pay pension contributions during your absence; they will be worked out as a percentage of the actual pay you receive. This will be the normal contribution rate of whichever scheme you are a member. See the Civil Service Pensions website for current contribution rates.
Paid special leave counts towards your reckonable service for classic, classic plus and premium pensions. In most cases, unpaid special leave does not count towards reckonable service. However, in some cases unpaid special leave does count towards reckonable service.
In nuvos and alpha, if your special leave is paid, you will build up pension.
All paid maternity, paternity and adoption leave and any unpaid ordinary maternity and
paternity leave counts towards your pension.
Any unpaid additional maternity or adoption leave does not count towards your pension.
Parental leave allows parents to take time off to look after a child or make arrangements for the child’s welfare.
Parental leave is normally unpaid. If it is unpaid, it does not count towards your pension.
Time off for dependants
Time off for dependants allows employees to take a reasonable amount of time off work to
deal with certain unexpected or sudden emergencies and to make any necessary long term arrangements.
Unpaid time off for dependants does not count towards your pension
If you change your working pattern to work fewer hours, your pension will reduce. You may wish to consider ways of increasing the value of your pension benefits by:
You can find more information about these options on the Civil Service Pension website