5.4.1 classic, classic plus, premium,nuvos and alpha members can opt to pay extra contributions to buy added pension. They can pay by lump sum or by monthly contributions from salary. Added pension replaced added years in 2008, but existing added years contracts could continue.
An annual reminder in the form of an Employer Pension Notice (EPN), with an application form, is issued in time for new monthly contributions from 1 April.
Added pension in alpha is bought in the new scheme, so is separate to any added pension bought in one of the PCSPS schemes. It is therefore subject to a separate maximum limit.
A member can have bought the maximum permitted amount of added pension in their PCSPS pension and then buy the maximum in the alpha scheme.
The maximum limits will be included in the annual EPN.
5.4.2 Members who go onto assumed pay (as detailed in 5.3.8) will have the choice to suspend their added pension contributions or reduce the amount of contributions to a rate determined by reference to their actual pay during that period. They must contact you, the employer, to discuss the impact of receiving assumed pay. It is the employer’s responsibility to process suspension requests, and if the member chooses to do so, this takes effect for the date they send their request.
If a member stops added pension contributions during the period of assumed pay, they may resume contributions in the next pay period after the period of assumed pay ends.
If a member moves from a period of assumed pay to no pay, you must suspend their added pension contributions. But the member can make cash payments equal to the contributions that would have been taken from their salary, had they not gone on to reduced pay. The member should contact the Scheme Administrator to do this.
Please note: There are considerations for members of classic, classic plus, premium, and nuvos who moved into alpha on or after 1 April 2015. If these members were buying added years or added pension by regular contributions as part of an ongoing option, they are able to continue buying in their previous scheme until they either:
choose to cancel,
or they reach the agreed end date of their option (e.g. they reach age 60 and their added years contributions must stop).
If they choose to cancel their added pension or added years contributions in their PCSPS scheme, they cannot be restarted. The member will keep the additional pension, or service they have bought to the point they cancel.
5.4.5 If you receive a request from a staff member to join the AVC scheme and you do not currently participate in the AVC section then you will need to submit a request to participate immediately.
AVC benefit statements
5.4.6 The AVC providers will produce a benefit statement for each member that includes a Statutory Money Purchase Illustration (SMPI). The SMPI gives the member the value of their AVC fund and an illustration of the projected retirement income that the fund will give them. Scottish Widows and Standard Life (whose scheme is now closed to new members) send the benefit statements to members’ home addresses. Equitable Life (whose scheme is also closed to new members) sends the benefit statements to the Scheme Administrator to mail to members.
Legal & General members are able to view their benefit statement on the ‘Manage Your Account’ section of the Legal and General website. They will be sent an email advising them when the statement is ready. Members may request a statement be sent to them by post by contacting Legal & General.
Effective Pension Age (EPA)
5.4.7 Members of alpha are able to pay an additional contribution to buy an EPA portion of the pension. This portion can be paid (without any early payment reduction) before a member’s Normal Pension Age (NPA). They can choose from a selection of EPA options, each with a different level of contribution attached to it.
They can usually choose an EPA that can be payable one, two or three years before their NPA, and they can find the cost of each EPA by using the EPA contribution calculator.
A member can only buy one EPA at a time but they can change the option they are buying at a later date. This means that some members may build up multiple EPA pension pots.
EPA can be paid a number of years before a member's NPA. If their State Pension age changes, their NPA changes too. Their EPA can still be paid without any reduction one, two or three years before their new, later, NPA.
There is information for members about EPA on the Civil Service Pensions website, in the alpha main scheme guide. The EPA application form can be found on the forms page of the website.
5.4.8 A member's EPA portion (or portions) of their pension can only be paid when they retire (either fully or partially).
Each EPA portion can be paid without any reduction, a set amount of time before the member’s NPA (e.g. one year before the NPA). If it is paid earlier than the set amount of time it will be reduced for early payment, or if it is paid later, it may be increased for late payment.
5.4.9 EPA contributions can start from a members start date (if the application is made within three months of joining) or from 1 April each year. When buying an EPA from their start date, contributions are due from that date too, and they must be deducted from the members pay as soon as possible.
EPA contributions are deducted from the pensionable elements of the members pay.
5.4.10 You must ensure that you send details of the EPA contributions separately to the member’s main scheme contributions.
5.4.11 When buying an EPA portion of their pension, a member must agree to continue paying contributions until the end of the scheme year, 31 March. They cannot choose to cancel their EPA, and must continue to make payments. However if a member leaves the pension scheme, their EPA contributions will stop.
5.4.12 The Scheme Administrator will inform you when a member has chosen to buy (or restart a previous) EPA. They will issue you an instruction to deduct a specific percentage of the pensionable elements of their pay, and from what date.
You will normally receive this information in sufficient time for payroll action to be taken with effect from the EPA start date, but where this is not possible you will need to collect backdated contributions.
5.4.13 The level of EPA contribution is linked to a member’s age, and so it is likely that the contributions will change each scheme year. Any cancellations can only take effect from the end of a scheme year. The Scheme Administrator will let you know the new level of member’s deductions, or to stop taking deductions in time to make the changes for the start of the next scheme year.
5.4.14 Members who go onto assumed (notional) pay will have the choice to suspend their EPA contributions. They must contact you, the employer, to discuss the impact of receiving assumed pay. It is the employer’s responsibility to process suspension requests. If a member chooses to suspend their EPA contributions, this takes effect from the date they send their request.
If the member does not choose to suspend their EPA contributions, you must deduct their contributions from their reduced pay.
5.4.15 If a member suspends their EPA, they can choose to restart their EPA from the date their period of assumed pay ends. They must submit their request in enough time to allow you to set up the deductions in the first payroll period following their return to normal pay.
You must inform the member that if they do not restart their EPA it will remain suspended. They will have a choice to restart from the start of the next scheme year.
5.4.16 If a member with an EPA leaves the scheme and rejoins alpha in five years or less, their EPA will be automatically restarted from the date they returned to pensionable service.