5.3.11 When you make a retrospective pay award that straddles more than one financial year, you must calculate the arrears of employer and member contributions. This includes added pension or added years contributions and AVCs.

Employee contribution rates are based on their annualised pensionable earnings banding for that pay period. A member’s annualised pensionable earnings include all elements of their pay that are pensionable (for example, their basic pay and all pensionable allowances and bonuses).

If a member receives a late pay award or arrears payment, the employee contribution rate is based on the actual amount of annualised pensionable earnings paid in the relevant pay period. This applies:

  • even if the arrears causes the employee’s annualised pensionable earnings band to shift for just that pay period, and
  • if the arrears payment relates to a previous scheme year.

The member percentage contribution rates can be found here. Details of the employer contribution rates, including rates for partnership members, can be found here. You must check if a partnership member has had a birthday during the period covered by the retrospective pay increase. The arrears of ASLCs and employee contributions must be sent to the Cabinet Office Civil Superannuation Vote in the normal way (see ‘Paying for Civil Service pensions’ (section 3.5)).

Previously in the nuvos scheme, retrospective adjustments for pay awards after the “year-end” process was completed were not permitted.

Retrospective adjustments paid in the 2014-15 scheme year, or later, can now be allocated to the scheme year the pay was due, so it can be included in a previously closed year. However, this cannot happen if the pay was due in the 2013-14 scheme year or earlier.

If the pay change was due for the 2013-14 scheme year (or earlier) the retrospective pay change should be reflected in the members’ 2014-15 earnings.

This also applies to the alpha scheme. Retrospective changes to pay / earnings should be issued to the Scheme Administrator on the dates the payment is due, and not the date when the amount was paid.

Published:
4 January 2022
Last updated:
27 January 2022