Civil Service pension arrangements

3.1 Introduction

Introduction

3.1.1   The Civil Service Pension (CSP) arrangements are made up of a number of different schemes, including some where the member contributes to their own investment fund. Table 1 gives an overview of the arrangements.

You can find further details in sections 3.2 (‘Overview of schemes’), 3.3 (‘Other Schemes’) and 3.4 (‘Scheme Flexibilities’).

Table 1 – The CSP arrangements

alpha

A Defined Benefit scheme (Career Average - CARE). Pension builds up at 2.32% of actual pensionable earnings each scheme year. Introduced 1 April 2015. Most new entrants after that date will join this scheme.

nuvos

A Defined Benefit scheme (Career Average - CARE). Pension builds up at 2.3% of pensionable earnings each scheme year. Introduced 30 July 2007. Closed to new entrants from 31 March 2015 except those with a recent public sector pension, see section 4 (‘Your responsibilities when staff join’) for more details.

premium

A Defined Benefit pension scheme based on final salary.

Introduced 1 October 2002. Now closed to new entrants.

partnership

A Defined Contribution (‘money purchase’) pension.

classic

A Defined Benefit scheme based on final salary. It was open to Civil Servants from 1972 – 2002. The name classic came into effect 1 October 2002. Now closed to new entrants.

classic plus

A Defined Benefit pension scheme based on final salary. It was available from 1 October 2002 for staff in post on 30 September 2002. Now closed to new entrants.

The Civil Service Supplementary   (Earnings Cap) Scheme

This provides benefits on pensionable earnings above the earnings cap.

Closed to new members from 6 April   2006.

Designated stakeholder pension   scheme

A Defined Contribution (money   purchase) arrangement, offered as a way for staff to boost their retirement income, regardless of whether they already belong to one of the Defined Benefit schemes or partnership. Closed to new entrants from 1 June 2018 and to existing members from 1 September 2018.

Section 3.3 (‘Other Schemes’) gives   further details.

Table 2 – Other schemes managed by the Scheme Manager (Cabinet Office)

The Civil Service Additional Voluntary Contributions Scheme (CSAVCS)

A money purchase arrangement for Civil Service pension scheme members to provide an additional pension, where contributions are paid to one of a panel of approved pension providers for investment in a fund or selection of funds. Available to classic, classic plus, premium, nuvos and alpha members. Closed to new entrants from 1 September 2018.

Section 3.3 (‘Other Scheme’) gives   further details.

Additional Voluntary Contribution (AVC) Scheme

A money purchase arrangement for Civil Service pension scheme members to provide an additional pension, where contributions are paid to an approved pension provider for investment in a fund or selection of funds. Available to classic, classic plus, premium, nuvos and alpha members from 1 September 2018.

Section 3.3 (‘Other Schemes’) gives   further details.

The Civil Service Compensation Scheme (CSCS)

The scheme providing compensation benefits for civil servants who leave employment because of voluntary exit, voluntary redundancy or compulsory redundancy. The scheme also provides compensation for dismissal on the grounds of efficiency, where compensation can be paid at an employer’s discretion.

Sections 3.3 (‘Other Schemes’) and 6.3 (‘Early departure and ill health) give further details.

The Civil Service Injury Benefit Scheme (CSIBS)

The scheme providing Injury Benefit for a qualifying injury during the course of official duties which then impairs earning capacity.

Section 5 (‘Your responsibilities when staff are in service’) gives further details.

The Partnership Pension Account Ill-Health   Benefits Arrangements

Provides a lump sum to those who retire for ill health reasons and hold a partnership pension account.

The Partnership Death Benefit Arrangements

Provides a lump sum death benefit to the dependants of those who have died in service with a partnership pension account.

3.2 Overview of schemes

Introduction

3.2.1 The following tables give a brief overview of the pension schemes covered by the CSP arrangements. For more in-depth information, please refer to the scheme publications which are available in the Members section of the website.

alpha contributions and benefits

alpha is a Defined Benefit scheme (Career Average - CARE). Benefits are calculated using a proportion of pay earned in each scheme year of active service (a scheme year runs from the 1 April to 31 March).

New entrants can join alpha or open a partnership pension account (see table 4), subject to their eligibility.

Contributions

  • Members contribute a percentage of their pensionable earnings. 
  • Members receive tax relief on contributions subject to HMRC limits. 
  • You pay a monthly contribution (ASLC) to the Cabinet Office Civil Superannuation Vote for each member. It is the equivalent of the employer's contribution to a funded scheme. 
  • Members may buy added pension or contribute to a money-purchase top-up arrangement – see section 5 (‘Your responsibilities when staff are in service’). 
  • The extra pension can be bought either through regular payments or by lump sum. 
  • Members can contribute toward an EPA pension account (see section 5 (‘Your responsibilities when staff are in service’)).

Benefits

  • Not based on final salary

The pension builds up at 2.32% of pensionable earnings each scheme year. The pension will be adjusted in line with inflation every scheme year and when it is in payment, as advised by HM Treasury.

  • Members can exchange some of their pension for a tax-free lump sum on retirement. For each £1 of annual pension given up, the member will receive £12 of lump sum. There are restrictions, set by HM Revenue and Customs, on the total amount of the lump sum. 
  • Ill-health retirement benefits. 
  • Lump sum death benefits. 
  • Family benefits for members' dependants. 
  • Payments to unmarried partners are available, subject to qualifying conditions. The booklet ‘Pensions for partners’ gives more information. 
  • Members are not restricted by the earnings cap.

Membership

New entrants and most rejoiners in post on or after 1 April 2015 are eligible to join alpha, depending on their employment status.

Staff in post before 1 April 2015 may be able to join alpha but this is subject to several eligibility criteria.

See section 4 (‘Your responsibilities when staff join’) for eligibility information.

Pension age and taking benefits

The alpha Normal Pension Age (NPA) is the later of either the members State Pension Age (SPA), or age 65. If a member’s SPA changes, this will have an effect on the alpha NPA.

Members can claim their benefits earlier, subject to an early payment (actuarial) reduction.

Members who do not retire at their NPA may continue to build up their pension in the normal way. They will receive an age addition (an extra amount of pension) for each year, or part year that they do not take their pension after their NPA.

Members do not have to take their pension by age 75.

Switching from alpha to partnership and vice versa

Switching can occur at any point, but only once during a 12 month period. This can be done by completing the switch form which must be sent to your HR department two months before the switch date.

nuvos contributions and benefits

nuvos is a Defined Benefit scheme (Career Average - CARE). Benefits are calculated using a proportion of pay earned in each scheme year of active service (a scheme year runs from 1 April to 31 March). Members can join nuvos or open a partnership pension account (see table 4), subject to their eligibility. nuvos was closed to new entrants from 1 April 2015.

Contributions

  • Members contribute a percentage of their pensionable earnings. 
  • Members receive tax relief on contributions subject to HMRC limits. 
  • You pay a monthly contribution (ASLC) to the Cabinet Office Civil Superannuation Vote for each member. It is the equivalent of the employer’s contribution to a funded scheme. 
  • Members may buy added pension or contribute to a money-purchase top-up arrangement. They can buy amounts of extra pension either through regular payments or by lump sum (see section 5 (‘Your responsibilities when staff are in service’)).

Benefits

  • Not based on final salary.

The pension builds up at 2.3% of pensionable earnings each scheme year.

The pension being built up will be adjusted in line with inflation at the end of every scheme year, and when it is in payment, as advised by HM Treasury.

  • Members can exchange some of their pension for a tax-free lump sum on retirement. For each £1 of annual pension given up, the member will receive £12 of lump sum. There are restrictions, set by HM Revenue and Customs, on the total amount of the lump sum. 
  • Ill-health retirement benefits. 
  • Lump sum death benefits. 
  • Family benefits for members’ dependants. 
  • Payments to unmarried partners are available, subject to qualifying conditions. The booklet ‘Pensions for partners’ gives more information. 
  • Are not restricted by the earning cap.

Membership

After 30 July 2007 new entrants to the CSP arrangements were able to join nuvos, subject to eligibility. nuvos was closed to new entrants from 1 April 2015. nuvos is still available for some rejoiners, subject to their eligibility. New entrants and most rejoiners in post on or after 30 July 2007 were eligible to join nuvos, depending on their employment status. Staff in post before 30 July 2007 could not join nuvos.

See section 4 (‘Your responsibilities when staff join’) for eligibility.

Pension age and taking benefits

The current nuvos pension age is 65. However members can claim their benefits earlier, subject to an early payment (actuarial) reduction.

Members who do not retire at 65 may continue to build up their pension to age 75 in the normal way, subject to scheme limits. They will receive an age addition (an extra amount of pension) for each year or part year that they do not take their pension after pension age. The member and you will continue to contribute towards their nuvos pension in the normal way up to the member’s 75th birthday (see Section 7 (Members reaching age 75 (classic, classic plus, premium or nuvos)).

Switching from nuvos to partnership and vice versa

Switching can occur at any point, but only once during a 12 month period. This can be done by completing the switch form which must be sent to your HR department two months before the switch date.

premium contributions and benefits

premium is a Defined Benefit scheme, with benefits based on final salary.

Contributions

  • Members contribute a percentage of their pensionable earnings.
  • Members receive tax relief on contributions subject to HMRC limits.
  • You make a monthly contribution (ASLC) to the Cabinet Office Civil Superannuation Vote for each member. It is the equivalent of the employer’s contribution to a funded scheme.
  • Members may buy added pension or contribute to a money-purchase top-up arrangement. They can buy amounts of extra pension either through regular payments or by lump sum (see section 5 (‘Your responsibilities when staff are in service’)).

Benefits

  • A pension based on 1/60th of final pensionable earnings for each year of reckonable service.
  • Members can exchange some of their pension for a tax-free lump sum on retirement. For each £1 of annual pension given up, the member will receive £12 of lump sum. There are restrictions, set by HM Revenue and Customs, on the total amount of the lump sum.
  • The annual pension will be index linked. 
  • Ill-health retirement benefits. 
  • Lump sum death benefits. 
  • Family benefits for members’ dependants.  
  • Payments to unmarried partners are available, subject to qualifying conditions. The booklet ‘Pensions for partners’ gives more information.

Membership

Most staff in post on 30 September 2002 were eligible to transfer to premium from their existing scheme. After 1 October 2002, new entrants to the CSP arrangements were able to join premium, subject to eligibility. premium was closed to new entrants from 30 July 2007, although it is still available for some rejoiners (subject to their eligibility).

See section 4 (‘Your responsibilities when staff join’) for eligibility.

Pension age

The current premium pension age is 60. However, members can draw their benefits earlier, subject to an early payment (actuarial) reduction.

If members choose to work past age 60, they can build up pension benefits to the age of 75*. You and the member will continue to contribute towards their premium pension in the normal way up to the member’s 75th birthday (see Section 7 (Members reaching age 75 (classic, classic plus, premium or nuvos)).

*Subject to the maximum number of years’ service. See section 3.5 (‘Paying for Civil Service pensions’) for details.

Switching from premium to partnership and vice versa

Switching can occur at any point, but only once during a 12 month period. This can be done by completing the switch form which must be sent to your HR department two months before the switch date.

partnership contributions and benefits

The partnership pension account is a Defined Contribution pension scheme. Employer and, if applicable, employee contributions are invested in a savings plan that is designed to help the member build up a pension pot which they can use to take an income and lump sums. When an employee applies for partnership, they invest their contributions with the provider appointed by the Scheme Manager (Cabinet Office). The current partnership provider is:

  • Legal & General

For information on contributions and benefits, see the table below.

Contributions

  • The member decides how much they want to pay. They do not have to make any contributions. 
  • Employer contributions are based on pay before tax. Employee contributions are taken from net pay but the pension provider claims back tax on employee’s contributions which are then paid into their partnership account. You pay contributions as a percentage of the   member’s pensionable earnings. The percentage varies according to the member’s age. 
  • You will match any contributions that the member makes, up to a maximum of 3% of pensionable earnings. 
  • You also pay a mini ASLC (currently 0.5%) to pay for ill health and death benefits.

Benefits

The benefits are not predictable in the way that alphanuvos, premium, classic and classic plus benefits are.

The amount of retirement income will depend on several things. They are:

  • the amount of money that both you and the member have contributed; 
  • the investment returns on the contributions; and 
  • how they choose to claim their fund. They can select to buy an annuity, or take up to their full fund as a lump sum payment. 
  • if they choose to buy an annuity, the annuity rate which is used to convert the fund into a monthly income when the member retires and the type of annuity they choose; and 
  • if they choose to take a lump sum and the amount that they decide to take.
  • The 2014 Budget introduced more flexibility into the ways a member can access their partnership benefits, including the option to take all of their fund as a cash lump sum, and lexible draw down options. Members may have to transfer their fund to another scheme/provider to use some of the options available. 
  • Lump sum ill-health retirement benefits. 
  • Lump sum death benefits.

Membership

Available to all members eligible for membership of the CSP arrangements.

See section 4 (‘Your responsibilities when staff join’) for eligibility. 

When benefits become payable

Members do not have to retire in order to take their benefits. They can take their benefits from age 55.

Switching from partnership   to alpha and vice versa

Members who are eligible to join either partnership or alpha may switch between the two pension arrangements (irrespective of which one they choose to join first). Switching can occur at any point, but only once during a 12 month period. Members will need to complete the switch form and send it to their HR department two months before the switch date.

Switching from partnership   to nuvos and vice versa

Members who are eligible to join either partnership or nuvos may switch between the two pension arrangements (irrespective of which one they choose to join first). Switching can occur at any point, but only once during a 12 month period. Members will need to complete the switch form and send it to their HR department two months before the switch date.

Switching from partnership   to premium and vice versa

Members who are eligible to join either partnership or premium may switch between the two pension arrangements (irrespective of which one they choose to join first). Switching can occur at any point, but only once during a 12 month period. Members will need to complete the switch form and send it to their HR department two months before the switch date.

Switching from partnership   to classic or classic plus and vice versa

From 1 April 2018, partnership was expanded to all active members of the CSP arrangements, including those who joined before 2002. Therefore, members of classic or classic plus may switch to partnership and vice versa. Switching can occur at any point, but only once during a 12 month period. Members will need to complete the switch form and send it to their HR department two months before the switch date.

classic contributions and benefits

classic is a Defined Benefit scheme, with benefits based on final salary.

Contributions

  • Members contribute a percentage of pay towards a widow’s/widower’s/surviving civil partner’s pension, as well as   towards their own pension. 
  • Members receive tax relief on contributions subject to HMRC limits. 
  • You make a monthly contribution (ASLC) to the Cabinet Office Civil Superannuation Vote for each member. It is the equivalent of the employer’s contribution to a funded scheme. 
  • Members may buy added pension or contribute to a money-purchase top-up arrangement. They can buy amounts of extra pension either through regular payments or by lump sum (see section 5 (‘Your responsibilities when staff are in service’)).

 

 

 

 

 

 

 

Benefits

  • A retirement pension based on 1/80th of final pensionable earnings for each year of reckonable service and a lump sum equivalent to 3/80ths of final pensionable earnings for each year of reckonable service. 
  • As above, members will receive an automatic lump sum on retirement. They can exchange some or all of their lump sum for additional pension for themselves, or for themselves and their   widow/widower/surviving civil partner. They can also choose to take a higher lump sum, giving up £1 of annual pension for every £12 of lump sum. There are restrictions, set by HM Revenue and Customs, on the total amount of the lump sum. Taking a higher lump sum, however, will impact on the ‘death after retirement’ guarantee. 
  • The pension will be index linked annually. 
  • Ill-health retirement benefits. 
  • Lump sum death benefits. 
  • Family benefits for members’ dependants.

Membership

Most staff in post before 1 October 2002 were eligible for membership. From 1 October 2002 classic became a closed scheme and no new members could join. Some rejoiners may be able to join classic subject to their eligibility.

See section 4 (‘Your responsibilities when staff join’) for eligibility.

Members in post on 30 September 2002 could choose whether to stay in classic or transfer to classic plus or premium.

Pension age

The current classic pension age is 60. However, members can draw their benefits earlier, subject to an early payment (actuarial) reduction.

If members choose to work past age 60, they can build up pension benefits to the age of 75*. You and the member will continue to contribute towards their classic pension in the normal way up to the member’s 75th birthday (see Section 7 (Members reaching age 75 (classic, classic plus, premium or nuvos)).

*Subject to the maximum number of years’ service. See section 3.5 (‘Paying for Civil Service pensions’) for details.

Switching from  classic to partnership and vice versa

Switching can occur at any point, but only once during a 12 month period. Members will need to complete the switch form and send it to their HR department two months before the switch date.

classic plus contributions and benefits

classic plus is a Defined Benefit scheme, with benefits based on final salary combining elements from the classic and premium schemes. Under this option, service up to 30 September 2002 is calculated like classic (subject to minor changes). Service from 1 October 2002 is calculated like premium.

Contributions

  • Members contribute a percentage of their pensionable earnings. For service up to 30 September 2002, this contribution was specifically for a widow’s/widower’s/surviving civil partner’s pension. From 1 October 2002, the contribution is towards all scheme benefits. 
  • Members receive tax relief on contributions subject to HMRC limits. 
  • You make a monthly contribution (ASLC) to the Cabinet Office Civil Superannuation Vote for each member. 
  • Members may buy added pension or contribute to a money-purchase top-up arrangement. They can buy amounts of extra pension either through regular payments or by lump sum (See section 5 (‘Your responsibilities when staff are in service’)).

Benefits

  • A pension based on 1/60th of final pensionable earnings for each year of reckonable service from 1 October 2002. Plus a pension based on 1/80th of final pensionable earnings for service up to 30 September 2002. 
  • Members will receive a lump sum of 3/80th of their final pensionable earnings for each year of reckonable service up to   30 September 2002. They can also choose to take a higher lump sum, giving up £1 of annual pension for every £12 of lump sum. There are restrictions, set by HM Revenue and Customs, on the total amount of the lump sum. Taking a higher lump sum will impact on the ‘death after retirement’ guarantee. 
  • The pension will be index linked annually. 
  • Ill-health retirement benefits. 
  • Lump sum death benefits. 
  • Family benefits for members’ dependants. 
  • Payments to unmarried partners, subject to qualifying conditions, are available for service from 1 October 2002. The booklet ‘Pensions for partners’ gives more information.

Membership

Most civil servants in post on 30 September 2002 were eligible to join classic plus. From 1 October 2002 classic plus became a closed scheme and no new members could join.

Pension age

The current classic plus pension age is 60. However, members can draw their benefits earlier, subject to an early payment (actuarial) reduction.

If members choose to work past age 60, they can build up pension benefits to the age of 75*. They and you will continue to contribute towards their classic plus pension in the normal way.

*Subject to the maximum number of years’ service. See section 3.5 (‘Paying for Civil Service pensions’) for details.

Switching from  classic plus to partnership and vice versa

Switching can occur at any point, but only once during a 12 month period. Members will need to complete the switch form and send it to their HR department two months before the switch date.

3.3 Other schemes included in the Civil Service Pension arrangements

The Civil Service Additional Voluntary Contribution Scheme (CSAVCS)

3.3.1 The CSAVCS allowed members of classic, classic plus, premium, nuvos and alpha to contribute to an investment scheme with a financial institution to provide additional retirement benefits.

3.3.2 The statutory CSAVCS was closed to new members with effect from 31 August 2018. The providers were:

  • Scottish Widows
  • Standard Life

Please note: Members with Equitable Life who are eligible for Protected Life Cover or guaranteed benefits from a with-profits fund investment can continue to contribute. 

Members who benefit from guarantees or special terms, or who opt-out of the CSAVCS transfer exercise, will be allowed to retain their existing pension pot within the scheme. They cannot contribute to the scheme (unless they are a member of Equitable Life).

3.3.3 The CSAVCS offers flexibility for the member to:

  • select the level of Additional Voluntary Contributions (AVCs) paid (Equitable Life members only),
  • determine which of the additional benefits they want and which investment methods, and
  • decide how they want to access their CSAVC fund.

3.3.4   CSAVCS contributions receive tax relief, subject to HMRC limits.

3.3.5 The Scheme Administrator (MyCSP) will be able to provide you with more detailed information on the CSAVCS. The publication ‘The Civil Service Additional Voluntary Contribution Scheme’ is available here

Additional Voluntary Contribution (AVC) Scheme

3.3.6 From 1 September 2018 members of classic, classic plus, premium, nuvos and alpha were able to make additional voluntary contributions through a new arrangement with Legal & General.

Further information is located in the Legal and General CSAVCS Frequently Asked Questions section which can be found here.

A CSAVC application form is available here.

The Legal & General Micro-site provides further details:

www.legalandgeneral.com/workplacebenefitsResp/csp/csavc/

If you receive a request from a staff member to join the AVC scheme and you do not currently participate in the AVC section, you will need to submit a request to participate immediately. The procedure can be found on the DC Procedure Library at:

www.civilservicepensionscheme.org.uk/employers/defined-contribution/

The Civil Service Compensation Scheme (CSCS)

3.3.7 The CSCS provides compensation for civil servants whose employment is terminated under the following categories:

  • Voluntary Exit (VE) 
  • Voluntary Redundancy (VR) 
  • Compulsory Redundancy (CR) 
  • Efficiency Dismissal

3.3.8 The CSCS covers most employees, including those who have opted out of the CSP arrangements.

3.3.9 It also provides compensation for civil servants on fixed-term appointments in certain circumstances.

3.3.10 As the employer, you must meet the full costs of benefits paid under the CSCS (including early payment of pensions).

See section 6.3 (‘Early departure and ill health’) for more information about the categories of early departure and when they can be used.

The Civil Service Injury Benefit Scheme (CSIBS)

3.3.11 Injury Benefit is paid to civil servants who suffer a 'qualifying injury' while on duty, which reduces their earning capacity.

3.3.12 The CSIBS covers all civil servants, including employees who are not in the CSP arrangements.

3.3.13  As an employer, you must meet the full costs of any injury that occurs after 1 April 1998.

See section 5 (‘Your responsibilities when staff are in service’) for more information on the CSIBS.

The Partnership Death Benefits Arrangements

3.3.14 The Partnership Pension Death Benefits Arrangements provides lump sum death benefits to the dependants of those with a partnership pension account.

These benefits are provided under Schedule 4 of the Public Service (Civil Servants and Others) Pensions (Amendment) Regulations 2014.

The Partnership Pension Account Ill-Health Benefits Arrangements

3.3.15 The Partnership Pension Account Ill-Health Benefits Arrangements provide a lump sum to those with a partnership pension account if they are retired on ill-health grounds.

These benefits are provided under Schedule 3 of the Public Service (Civil Servants and Others) Pensions (Amendment) Regulations 2014.

Designated stakeholder pension scheme

3.3.16 Prior to 1 June 2018, staff who were not eligible to join the CSP arrangements could open a designated stakeholder pension account. This was also open as a ‘top up’ to members belonging to one of the main CSP arrangements.

3.3.17 The stakeholder pension scheme was closed to new members with effect from 1 June 2018 and to existing members from 1 September 2018.

3.3.18 Members now have the option to join the AVC scheme and have the option to transfer their existing standalone benefits to that scheme.

3.3.19 Blank

3.3.20 Blank

Stakeholder

3.3.21 Blank

3.4 Scheme Flexibilities - Reserved decisions to be referred to the Scheme Manager

Introduction

3.4.1 The range of pension flexibilities are summarised in
the tables below. If you want to use any of these, you should contact the Scheme Manager (Cabinet Office):

premium

Rule

Description

A.1(4)

Agree pension age other than 60.

The Scheme Manager would normally exercise this discretion where a group of staff were being transferred into the Civil Service or schedule 1 body. The discretion would be exercised in conjunction with rule F.13. The purpose of exercising the discretion is to ensure transferring staff have comparable pension rights when they join the Civil Service.

The Scheme Manager could exercise discretion where an employer wanted to recruit someone with specialist skills. However, an employer would have to make a very robust business case for the Scheme Manager to agree a pension age lower than 60.

A.2(2)(b), A.2(3)(a), A.3(1)

Remuneration counting as pensionable:

  • Employers need approval from the Scheme Manager for a new permanent allowance to be treated as pensionable. 
  • Bonuses and allowances not paid on a permanent basis can only be treated as pensionable if the employer gets approval from the Scheme Manager. 
  • Where a person is on an unpaid absence, in some circumstances their pension benefits are calculated by using assumed pay. Assumed pay normally replicates the pension they received before they started their unpaid absence. The Scheme Manager may increase the amount of pay if the employer gives good reasons for doing so.

A.3(2)(e)

Unpaid leave counting as reckonable.

The employer may ask the Scheme Manager to count as reckonable a period of unpaid leave. The Scheme Manager would only agree to the absence reckoning in exceptional circumstances.

B.1(5)(d)

Exceptionally allow premium membership.

The Scheme Manager may agree to a person joining premium. This discretion would normally be exercised as part of a bulk transfer of staff and where TUPE terms apply.

However, there may be some rare circumstances for example on re-employment where the Scheme Manager may exercise the discretion on an individual basis. Employers would need to make a robust business case as this would be exceptional treatment.

B.1A(2)(a)

Allow former by analogy staff to join premium.

Where a person leaves an analogous scheme and joins the Civil Service within 28 days, the Scheme Manager may agree that the person joins premium.

B.5(5) and B.5(5A)

Opting back in, effective date.

Where a person who has had a partnership account decides to become an active member, their option is effective from the first day of the first pay period after the period of two months beginning with the date on which the option is exercised. Where a person who had not had a partnership pension account decides to become an active member, their option is effective from the first day of the first pay period after the date on which the option is exercised. However, in exceptional circumstances the Scheme Manager may allow such options to become effective earlier.

Please note: the effective date where a person who had a partnership pension account decides to become an active member of premium, was amended with effect from January 2018 (as detailed in EPN518). The premium rules, as stated, will be updated to reflect this change at a future date.

B.6(3) and B.6(4)

Opting out effective date.

Where an active member decides to opt out of the scheme, their option is effective from the first day of the first pay period after the date on which the option is exercised. Where an active member decides to join a partnership pension account, their option is effective from the first day of the first pay period after the period of two months beginning with the date on which the option is exercised. However, in exceptional circumstances the Scheme Manager may allow such options to become effective earlier.

Please note: the effective date where an active member decides to join partnership, was amended with effect from January 2018 (as detailed in EPN518). The premium rules, as stated, will be updated to reflect this change at a future date.

C.2A(2)(a)

Employer contributions.

An employer can ask the Scheme Manager to allow them to pay the member’s contributions. This would be for example where the Scheme Manager has agreed that an unpaid absence may reckon, see rule A.3 (2) (e).

C.11(1), (2) and C.11(2A)

Employer buying added years on behalf of a member.

There may be exceptional circumstances where an employer may wish to buy added years (reckonable service) for a member. Employers will need to make a business case to the Scheme Manager. If the Scheme Manager agrees the proposal, they will also decide the cost of the added years.

C.1.5(1), (3)(a)

Employer wishes to buy added pension for a member.

A third party may wish to buy added pension for a member.

This is normally where the member has given time to Voluntary Service Overseas. In return, that organisation buys added pension for the member.

D.3(3)(d)(ii) and M.1(1)(a)

Determining if a scheme is analogous.

This is for the purpose of rule B.1A (2) (a) above.

D.7A(1)

Exceptional treatment for those whose pay has been reduced due to restructuring.

Members whose pay has reduced may have their pension calculated in a way that gives their accrued pension rights some protection. It is for the Scheme Manager to decide if the circumstances of the pay restructuring merit this treatment.

E.1(3)

Withhold adult dependants’ pension where there is a death bed marriage.

The Scheme Manager may decide not to pay an adult dependants pension if the couple married less than six months before the member’s death.

F.13 and F.14

Special terms for compulsory transfer of employment

The Scheme Manager may vary the application of the scheme rules where a group of staff are being bulk transferred into the Civil Service or schedule 1 body. This is to ensure that the scheme offers comparable terms to the sending scheme. Normally the Actuaries involved in the transfer terms will identify which areas require a Scheme Manager decision.

H.5

Disapply abatement.

The pension of a member who is re-employed in the scheme is normally subject to abatement. In exceptional circumstances, the Scheme Manager may decide that abatement will not apply or apply to a lesser extent. The rule specifically refers to ‘special circumstance’ so an employer would have to make a robust business case.

J.3

Forfeiture.

  • Where a member has been convicted of offences under the Official Secrets Act that results in imprisonment of 10 or more years, the Minister may withhold pension benefits. 
  • If the Minister decides that a member has committed an offence connected to their employment which has been gravely injurious to the State or resulted in a loss of confidence in the public service, their pension benefits can be withheld. The Scheme Manager decides the extent to which the member’s benefits are forfeit. 
  • A proportion of the member’s benefits may be withheld where they have a monetary obligation to their employer. This monetary obligation must be the result of their criminal,   negligent or fraudulent act or omission.

classic

Rule

Description

1.6aa

Fluctuating emoluments.

Bonuses and allowances not paid on a permanent basis can only be treated as pensionable if the employer has approval from the Scheme Manager.

2.10(ii) and (iv)

Reckoning of reserved forces service and voluntary public service.

The Scheme Manager may agree unpaid absence for one of these purposes will reckon.

2.24

Grant of added years by employer.

There may be exceptional circumstances where an employer wishes to buy added years of reckonable service for a member. Employers will need to make a business case to the Scheme Manager. If the Scheme Manager agrees the proposal, they will also decide the cost of the added years.

3.15

Early payment of pension in compelling personal circumstances.

The Scheme Manager may bring a preserved award into payment on an unreduced basis where the member, who is over their minimum pension age, has personal circumstances that prevent them from working. This would not generally include ill health as other rules apply in that circumstance.

3.24e

Exceptional treatment for those whose pay has been reduced due to restructuring.

Members whose pay has reduced may have their pension calculated in a way that gives their accrued pension rights some protection. It is for the Scheme Manager to decide if the circumstances of the pay restructuring merit this treatment.

3.26a

Disapply abatement.

The pension of a member who is re-employed in the scheme is normally subject to abatement. In exceptional circumstances, the Scheme Manager may decide that abatement will not apply or apply to a lesser extent. The rule specifically refers to ‘special   circumstance’ so an employer would have to make a robust business case.

6.35 and 6.35za

Special terms for compulsory transfer of employment.

The Scheme Manager may vary the application of the scheme rules where a group of staff are being bulk transferred into the Civil Service or schedule 1 body. This is to ensure that the scheme offers comparable terms to the sending scheme. Normally, the Actuaries involved in the transfer terms will identify areas that require a Scheme Manager decision.

8.2

Forfeiture

  • Where a member has been convicted of offences under the Official Secrets Act that results in imprisonment of 10 or more years, the Minister may withhold pension benefits. 
  • If the Minister decides that a member has committed an offence connected to their employment which has been gravely injurious to the State or resulted in a loss of confidence in the public service, their pension benefits can be withheld. The Scheme Manager decides the extent to which the member’s benefits are forfeit. 
  • A proportion of the member’s benefits may be withheld where they have a monetary obligation to their employer. This monetary obligation must be the result of their criminal, negligent or fraudulent act or omission.

14.6(1)

Allow employer or third party to buy member added pension.

This is similar to employers buying added years, rule 2.24.

14.6(5)

To decide what third parties are allowed to buy added pension.

A third party may wish to buy added pension for a member. This is normally where the member has given time to Voluntary Service Overseas. In return that organisation buys added pension for the member.

Appendix 1

Pensionable allowances.

Employers need approval from the Scheme Manager for a new permanent allowance to be treated as pensionable.

nuvos

Rule

Description

A.2(2)(b), (3)(a), (4)(b) and (5)(b)

Remuneration counting as pensionable:

  • Employers need approval from the Scheme Manager for a new permanent allowance to be treated as pensionable. 
  •  onuses and allowances not paid on a permanent basis can only be treated as pensionable if the employer has approval from the Scheme Manager. 
  • The Scheme Manager can also agree the value of other payments that may be regarded as pensionable.

A.3(1) and A.3(2)(g)

Assumed earnings.

Where a person is on an unpaid absence, in some circumstances, their pension benefits are calculated by using assumed pay. Assumed pay normally replicates the pension they received before they started their unpaid absence. The Scheme Manager may increase the amount of pay if the employer gives good reasons for doing so.

A.11(2)

Disapply earnings cap.

The amount of final pensionable earnings used to calculate any linked final salary benefits is restricted to a permitted maximum. The Scheme Manager may allow the permitted maximum to be disregarded in exceptional circumstances.

B.4(2)

Extend time limit to backdate opting out.

Where a member intends to opt out within three months, the Scheme Manager may extend the time limit in exceptional circumstances.

B.6(5) and B.6(6)

Opting back in, effective date.

Where a person who has had a partnership account decides to become an active member, their option is effective from the first day of the first pay period after the period of two months beginning with the date on which the option is exercised. Where a person who had not had a partnership pension account decides to become an active member, their option is effective from the first day of the first pay period after the date on which the option is exercised. However, in exceptional circumstances the Scheme Manager may allow such options to become effective earlier.

Please note: the effective date where a person who had a partnership pension account decides to become an active member of nuvos, was   amended with effect from January 2018 (as detailed in EPN518). The nuvos rules, as stated, will be updated to reflect this change at a future date.

B.7(3) and B.7(4)

Opting out effective date.

Where an active member decides to opt out of the scheme, their option is effective from the first day of the first pay period after the date on which the option is exercised. Where an active member decides to join a partnership pension account, their option is effective from the first day of the first pay period after the period of two months beginning with the date on which the option is exercised. However, in exceptional circumstances the Scheme Manager may allow such options to become effective earlier.

Please note: the effective date where an active member decides to join partnership, was amended with effect from January 2018 (as detailed in EPN518). The nuvos rules, as stated, will be updated to reflect this change at a future date.

D.8(1)

Allow an employer or third party to by added pension on behalf of the member.

There may be exceptional circumstances where an employer may wish to buy added pension for a member. Employers will need to make a business case to the Scheme Manager. If the Scheme Manager agrees the proposal, they will also decide the cost of the added pension. A third party may wish to buy added pension for a member.

D.8(7)

Decide what third parties may buy added pension.

This is normally where the member has given time to Voluntary Service Overseas. In return, that organisation buys added pension for the member. However, the Scheme Manager decides whether another organisation can buy added pension for a member.

F.1(7)

Withhold adult dependant pensions, where there is a death bed marriage.

The Scheme Manager may decide not to pay an adult dependants pension if the couple married less than six months before the member’s death.

G.13 and G.14

Special terms for compulsory transfer of employment.

The Scheme Manager may vary the application of the scheme rules where a group of staff are being bulk transferred into the Civil Service or schedule 1 body. This is to ensure that the scheme offers comparable terms to the sending scheme. Normally, the Actuaries involved in the transfer terms will identify which areas require a Scheme Manager decision.

J.5

Disapply abatement

The pension of a member who is re-employed in the scheme is normally subject to abatement. In exceptional circumstances, the Scheme Manager may decide that abatement will not apply or apply to a lesser extent. The rule specifically refers to ‘special circumstance’ so an employer would have to make a robust business case.

K.2

Forfeiture.

  • Where a member has been convicted of offences under the Official Secrets Act that results in imprisonment of 10 or more years, the Minister may withhold pension benefits. 
  • If the Minister decides that a member has committed an offence connected to their employment which has been gravely injurious to the State or resulted in a loss of confidence in the public service, their pension benefits can be withheld. The Scheme Manager decides the extent to which the member’s benefits are forfeit.
  • A proportion of the member’s benefits may be withheld where they have a monetary obligation to their employer. This monetary obligation must be the result of their criminal, egligent or fraudulent act or omission.

alpha

Rule (Regulation)

Description

21(1)(a)(ii) and 21(2)(b)

Opting back in, effective date.

Where a person who has had a partnership account decides to become an active member, their option is effective from the first day of the first pay period after the period of two months beginning with the date on which the option is exercised. Where a person who had not had a partnership pension account decides to become an active member, their option is effective from the first day of the first pay period after the date on which the option is exercised. However, in exceptional circumstances the Scheme Manager may allow such options to become effective earlier.

24(1)(a) and 24(1)(b)

Opting out before the end of one month, extending the deadline.

A person who opts out of the scheme within one month of their start date or their automatic enrolment date is taken to have never been in the scheme. In exceptional circumstances the Scheme Manager may extend the one month deadline.

25(2)(b) and 25(3)(b)

Opting out after one month, effective date.

Where an active member decides to opt out of the scheme, their option is effective from the first day of the first pay period after the date on which the option is exercised. Where an active member decides to join a partnership pension account, their option is effective from the first day of the first pay period after the period of two months beginning with the date on which   the option is exercised. However, in exceptional circumstances the Scheme Manager may allow such options to become effective earlier.

26(2)(b), 26(3) and 26(4)

Remuneration counting as pensionable:

  • Employers need approval from the   Scheme Manager for a new permanent allowance to be treated as pensionable. 
  • Bonuses and allowances not paid on a permanent basis can only be treated as pensionable if the employer has approval from the Scheme Manager. 
  • The Scheme Manager can also agree the value of other payments that may be regarded as pensionable.

27(2)(b) and 27(3)(e)

Assumed earnings.

Where a person is on an unpaid absence, in some circumstances, their pension benefits are calculated by using assumed pay. Assumed pay normally replicates the pension they received before they started their unpaid absence. The Scheme Manager may increase the amount of pay if the employer gives good reasons for doing so.

107(4)

Withhold adult dependant pensions, where there is a death bed marriage.

The Scheme Manager may decide not to pay an adult dependants pension if the couple married less than six months before the member’s death.

136(2)(b)

Employer contributions.

An employer can ask the Scheme Manager to allow them to pay the member’s contributions. This would be for example where the Scheme Manager has agreed that an unpaid absence may reckon, see 27(3)(e).

156 and 157

Special terms for compulsory transfer of employment.

The Scheme Manager may vary the application of the scheme rules where a group of staff are being bulk transferred into the Civil Service or schedule 1 body. This is to ensure that the scheme offers comparable terms to the sending scheme. Normally, the Actuaries involved in the transfer terms will identify which areas require a Scheme Manager decision.

165 and 167

Forfeiture.

  • Where a member has been convicted of offences under the Official Secrets Act that results in imprisonment of 10 or more years, the Minister may withhold pension benefits. 
  • If the Minister decides that a member has committed an offence connected to their employment which has been gravely injurious to the State or resulted in a loss of confidence in the public service, their pension benefits can be withheld. The Scheme Manager decides the extent to which the member’s benefits are forfeit. 
  • A proportion of the member’s benefits may be withheld where they have a monetary obligation to their employer. This monetary obligation must be the result of their criminal, negligent or fraudulent act or omission.

Schedule 1, Part 1, Paragraph 1

Decide what third parties may buy added pension.

This is normally where the member has given time to Voluntary Service Overseas. In return, that organisation buys added pension for the member. However, the Scheme Manager decides whether another organisation can buy added pension for a member.

Schedule 1, Part 2,Chapter 1, Paragraph 8(1)

Allow an employer or third party to by added pension on behalf of the member.

There may be exceptional circumstances where an employer may wish to buy added pension for a member. Employers will need to make a business case to the Scheme Manager. If the Scheme Manager agrees the proposal, they will also decide the cost of the added pension. A third party may wish to buy added pension for a member.

Schedule 1, Part 4, Chapter 2, Paragraphs 39(5), 40(4) and Chapter 3, 44(4)

EEPA

A member whose EEPA option ceases (either through the member ceasing pensionable service, the member cancelling the option or at the member’s request during a period of assumed pay) may not resume periodical payments without the approval of the Scheme Manager.

Please Note: for a member who ceases pensionable service, they must first re-enter pensionable service for their option to resume. Scheme Manager approval is only required if the gap in pensionable service is more than five years.

3.5 Paying for Civil Service pensions

How do you pay for pensions?

3.5.1 Pension provision forms a significant part of the total reward package you offer your employees. When you are pay bargaining, you will need to consider the affordability of contributions you pay towards your employees’ pensions.

3.5.2 Depending on the particular schemes members choose, they also bear a share of pension costs by making a contribution from their pay.

3.5.3 You must give your payroll the information in this particular section so that they can correctly calculate the contributions for each of the schemes.

Table 1 gives an overview of what you must pay as an employer, and also the percentage of contribution the member makes.

Table 1 - Paying for Civil Service pensions

Pension Arrangement

Employer contribution?

Employee contribution?

Where do you pay the contributions?

When?

alpha

Yes

(see ‘alpha, nuvos, premium, classic and classic plus schemes’, paragraph 3.5.4 onwards)

Yes

A percentage of alpha pensionable earnings

See Employee contribution rates

Cabinet Office Civil Superannuation Vote

As soon as possible after pay day and before 19th day of the month following the payment run

nuvos

Yes

(see ‘alpha, nuvos, premium, classic and classic plus schemes’ paragraph 3.5.4 onwards)

Yes

A percentage of nuvos pensionable earnings

See Employee contribution rates

Cabinet Office Civil Superannuation   Vote

As soon as possible after pay day and before 19th day of the month following the payment run

premium

Yes

(see ‘alpha, nuvos, premium, classic and classic plus schemes’, paragraph 3.5.4 onwards)

Yes

A percentage of premium pensionable earnings

See Employee contribution rates

Cabinet Office Civil Superannuation   Vote

As soon as possible after pay day and before 19th day of the month following the   payment run

classic

Yes

(see ‘alpha, nuvos, premium, classic and classic plus schemes’, paragraph 3.5.4 onwards)

Yes

A percentage of classic pensionable earnings

See Employee contribution rates

Cabinet Office Civil Superannuation   Vote

As soon as possible after pay day and before 19th day of the month following the payment run

classic plus

Yes

(see ‘alpha, nuvos, premium, classic and classic plus schemes’, paragraph 3.5.4 onwards)

A percentage of classic plus pensionable earnings

See Employee contribution rates

Cabinet Office Civil Superannuation   Vote

As soon as possible after pay day   and before 19th day of the month following the payment run

partnership

Yes (see ‘partnership pension accounts’,paragraph 3.5.12 onwards and Employer contribution rates)

Yes, but only if they choose to make a contribution

1) Main employee and employer   contributions go to the pension provider

2) A mini ASLC of 0.5% of   pensionable earnings for risk benefits goes to the Cabinet Office Civil   Superannuation Vote

1) As soon as possible after pay day and before 22nd  day (or 19th day if paid by cheque) of the month following the payment run

2) As soon as possible after pay day and before 19th day of the month following the payment run

Added pension

No, but there are exceptional circumstances where you can buy added pension for an employee (you must contact the Scheme Manager before doing so)

Yes, age related – see section 5 (‘Your responsibilities when staff are in service’) on added pension

Cabinet Office Civil Superannuation   Vote

As soon as possible after pay day and before 19th day of the month following the payment run

AVCS

No

Yes, see section 3.3 (The Civil Service   Additional Voluntary Contribution Scheme (CSAVCS))

To the pension provider

As soon as possible after pay day and before 22nd  day (or 19th day if paid by cheque) following the payment run

Supplementary (Earnings Cap) Scheme

Yes – as advised by the Scheme   Manager

Yes

A percentage of pensionable earnings over the earnings cap without tax relief

Cabinet Office Civil Superannuation   Vote

As soon as possible after pay day and before 19th day of the month following the payment run

Civil Service Injury Benefit Scheme   (CSIBS)

You pay for the costs of injuries that happened after 1 April 1998

No

No contributions

Benefits are paid from Cabinet Office Civil Superannuation Vote and recovered from employers.

When benefits are due

Civil Service Compensation Scheme   (CSCS)

Yes, you are responsible for paying the full cost of compensation for early leavers

No

No contributions

Any lump sum compensation payment will be paid directly from your payroll

Any cost for the buy-out of an early payment reduction or the purchase of added pension is paid out from the   Cabinet Office Civil Superannuation Vote but the amount is recovered from employers  each month by the Scheme Administrator

When benefits are due

See section 6 (‘Your   responsibilities when staff leave before the pension age’)

alpha, nuvos, premium, classic and classic plus schemes

3.5.4 The contributions you pay for members in these schemes are collectively known as Accruing Superannuation Liability Charges (ASLC). The Scheme Manager sets the ASLC rates based on advice from the Scheme Actuary. You pay a percentage based on the pay band the member falls into. The Scheme Actuary reviews the pay bands each year. We will tell you in an Employer Pension Notice (EPN) the salary bands and ASLC rates that will apply from the following April. Contribution percentages (usually) change less frequently.

Standard ASLC rates

Non-Standard ASLC rates

3.5.6 In some circumstances you may want to offer individual pension arrangements for a special or senior appointment. You must get approval from the Scheme Manager on all non-standard arrangements. You must consult the Scheme Manager in advance so that they can assess the extra costs and agree an ASLC percentage.

Calculating the ASLC

Step1 Calculate permanent pensionable earnings.

A member’s permanent pensionable earnings are their basic salary and any other pensionable emoluments. An emolument is any form of remuneration (allowances and bonuses) paid to an employee in addition to basic salary.

This includes non-cash pensionable benefits such as uniform allowances. You should ignore any reduction in pay that results from a salary sacrifice arrangement.

If the member works part time, you need to identify the correct ASLC salary band by calculating the full-time equivalent salary to ensure the correct percentage contribution is used.

You only pay contributions up to the earnings cap, (please note the earnings cap does not apply to nuvos or alpha).

Step 2 Look up the percentage rate.

You should use the permanent pensionable earnings you have calculated in step 1 to decide which percentage rate applies to the member. The percentage rates that apply to each pay band can be found on the Employer Contribution Rates page.

Step 3 Calculate actual pensionable earnings.

You should calculate the actual pensionable earnings that you will be paying the member for the month. Please note that for this step, you should use the actual rate of pay for a member who works part time, not the full time equivalent. If the member’s earnings are restricted by the earnings cap, then you should only use pensionable earnings up to the earnings cap.

Step 4 Apply the percentage.

The ASLC you should pay for the member is the percentage from step 2 applied to the earnings figure from step 3.

Example

A member works part time on half the normal conditioned hours and earns £12,000 a year. This month they will receive a pensionable bonus* of £100.

Their permanent pensionable earnings are £24,000 (FTE).

The relevant percentage rate (2018-2019 ASLC rates) is 20.9%.

Their actual pensionable earnings for this month are £1,000 basic pay plus a bonus of £100. The total is therefore £1,100.

Therefore, the ASLC you should pay is 20.9% of £1,100, which is £229.90.

*Bonuses are generally non-pensionable. If you wish to make a bonus pensionable you must seek authorisation from the Scheme Manager first. See section 10 (‘Pensionable Earnings’) for further information.

3.5.7   You must pay the ASLCs once the month’s calculations have been completed, together with the appropriate employees’ contributions, including added pension, to Cabinet Office Civil Superannuation Vote. For methods of payment and where to send them, see Annex 3A (‘How do you pay over ASLCs?).

3.5.8   You must also send the Scheme Manager a breakdown report of the pension contributions when you pay them. A template of the report is in Annex 3B (‘Breakdown of the Monthly Pension Contributions’). You must email the report to the Scheme Manager at  csvote@cabinetoffice.gov.uk . Do not send supporting documentation. The Scheme Manager only requires the Annex 3B report.

When service only covers part of the month

3.5.9 If service begins or ends with part of a month, your payroll must calculate the ASLC using the percentage rate for the relevant full-time salary band for a whole month and apply that to the actual amount of pensionable earnings.

Pay arrears and calculating the ASLC

3.5.10 Pay arrears do not take a member into a higher salary band for the purpose of determining which ASLC percentage rate applies, unless the new annual full time salary takes them into a higher band.

Pay arrears would, however, affect the level of actual pensionable earnings to which the correct percentage is applied.

Calculating the ASLC where member is paid other than monthly

3.5.11 When a member is paid other than monthly - for example, every week - the ASLC calculation must be done at the end of each month and include figures from all pay dates for that member that fall in that month.

partnership pension accounts – Employer contributions

3.5.12 Employer contributions to partnership pension accounts come in three parts:

  • You pay an age-related contribution, based on the employee’s age at the beginning of the current tax year (6 April last). You pay this regardless of whether or not the employee chooses to contribute. See the Employer Contributions Rates for the age-related contribution rates. 
  • You match the employee’s gross contribution up to a maximum of 3%. 
  • You must also pay a mini ASLC of 0.5% of pensionable earnings to cover the cost of risk benefits as a result of death-in-service or ill health retirement. You pay this mini ASLC to Cabinet Office Civil Superannuation Vote by using any one of the methods detailed in Annex 3A. You must also complete the ‘partnership’ box on the breakdown report (see Annex 3B) and send it to the Scheme Manager as soon as you make the payment.

3.5.13 In some cases, you may want to pay a higher contribution than the standard age-related rate. You can do this as long as you can justify that it is necessary to recruit or keep the member. You must report these cases to the Scheme Manager.

3.5.14 partnership contribution percentages could change in the future.

3.5.15 You calculate the age-related contributions using gross pay. You must take care when working out matching contributions, as the aim is to match on a gross basis. This means that the amount the employee pays to the provider and your matching contributions are not in fact the same.

3.5.16 You only pay matching contributions to match the employee’s regular contributions. If an employee decides to make a one-off lump sum contribution, you will not have to pay a matching contribution. An employee can make an additional lump sum payment through payroll or directly to the provider.

partnership pension accounts – Employee contributions

3.5.17 Employee contributions are worked out before the deduction of basic rate tax is taken from the employee’s pay. This applies whatever the tax status of the employee.

partnership pension accounts – Ongoing payroll action

3.5.18 Your payroll must follow the Legal & General ‘Manage Submissions Interface Guide’ issued in EPN533 for ongoing action.

Paying contributions and the scheme limits

Effect on classic members

3.5.19 The limit to reckonable service under classic is 45 years in total. Prior to 1 March 2008, the limits were:

  • 40 years by the scheme pension age (age 60 for most members), or 
  • if a member was re-employed after the scheme pension age, re-employed reckonable service was limited to 5 years (45 years in total).

Although the service limit for all was increased to 45 years from 1 March 2008, service accrued before 1 March 2008 remained limited as described in the above two bullets.

3.5.20   Members of classic must contribute a percentage of their pay towards the cost of providing benefits for their widow, widower or surviving civil partner after their death (the Widow(er)s’ Pension Scheme (WPS)). In addition they will pay a percentage of their pensionable earnings towards their personal benefits.

If a member completes 45 years’ service, they will continue to pay the WPS contribution at a rate of 1.5% until they leave service or reach age 75, whichever is earlier. The employer contributions must also continue to be paid. However, the contributions that the member pays in addition to the 1.5% WPS contributions will cease when the service limit is reached. You will need to liaise with the Scheme Administrator (MyCSP) to confirm how they will inform you of those members who are approaching the service limit to ensure that you cease their additional contributions at the right time.

Effect on classic plus & premium members

3.5.21   The reckonable service limit in classic plus and premium is also 45 years (prior to 1 March 2008 the limit was 40 years). Member contributions should stop when the member reaches the 45 year service limit. Employer contributions should continue to be paid. You will need to liaise with the Scheme Administrator to confirm how they will inform you of those members who are approaching the service limit to ensure that you cease their contributions at the right time.

Effect on partnership members

3.5.22 Member contributions should cease at age 75; however employer contributions should continue to be paid.

Effect on nuvos and alpha members

3.5.23 Reckonable service is not applicable to alpha or nuvos. A nuvos member’s pension will be restricted to 75% of their final pay. This limit does not apply to alpha.

Effect on contributions when a member is on secondment

3.5.24 You must clarify and agree with the member and with the borrowing employer which pension scheme the member belongs to before secondment begins. Section 5.5 (‘Secondment’) gives information on the things you need to consider when allowing someone to go on secondment. Table 2 below gives an overview of what payment arrangements are needed depending on the type of secondment.

3.5.25 The borrowing employer normally pays the ASLC or employer contributions if the member is in partnership. However, according to the agreement, the member (or the member and the employer borrowing them) can pay it instead. The member must pay through the employer.

Table 2 - Member stays in the CSP arrangements during secondment

alpha, nuvos, classic, classic plus and premium

Member

Payments

The member remains in the CSP arrangements and continues to receive a salary from their employing department.

You must continue to pay an ASLC   and the member’s contributions to Cabinet Office Civil Superannuation Vote as normal.

The member remains in the CSP arrangements and receives a salary from the employer borrowing them.

You must pass the ASLC payments   that you receive from the borrowing employer and the member’s pension contributions to Cabinet Office Civil Superannuation Vote.

partnership

Member

Payments

The member wishes to remain in partnership irrespective of whether you or the borrowing employer pays the salary.

You continue to pay over   contributions to the provider. You also continue to pay the mini ASLC. Your employer contributions will be based on the member’s notional Civil Service salary.

The member is paid by the borrowing employer and wishes to join their pension scheme whilst on secondment (they cannot join the borrowing employer’s scheme and continue to be in partnership).

The member has the options of:

  • Having their partnership account put on hold for the duration of their secondment. You must let the provider know via the interface (see ‘Manage Submissions Interface Guide’ issued in EPN533) 
  • Closing their account and transferring their fund to the borrowing employer’s pension scheme.

National Insurance and pensions

3.5.26 The level of National Insurance employers and employees pay depends on how much the employee earns. You can find further information on the rates you need to apply by visiting www.hmrc.gov.uk.

3.5.27   Blank

3.5.28   Blank

Changes to the Civil Service pensions’ structure

3.5.29 The Scheme Manager is responsible on behalf of the Civil Service Minister, for making any changes to the benefit structure of each of the schemes. If the Scheme Manager makes any improvements to the benefit structure, they have to consider the impact on you the employer.

3.5.30 The Scheme Manager will meet with a representative body of employing departments to consider any significant changes in our scheme structure. Major changes are discussed with the Cabinet Secretary and representative Permanent Secretaries. Under the Superannuation Act 1972, we must consult with the Trade Union about any proposed changes.

3.5.31 If any changes to the contributions are introduced, these will be announced in an EPN as far in advance as possible so that:

  • you can give sufficient notice to staff should employee contributions change, and
  • you can factor in increased ASLCs in your overall pay reward budget and pay negotiations.

Annexes