Your responsibilities when staff leave at or after pension age

7.1 Introduction

Scheme pension age

7.1.1 The scheme pension age for nuvos members is currently 65. For classic, classic plus and premium members, it is currently 60. In alpha, a members’ Normal Pension Age (NPA) is the later of their State Pension Age (SPA) or age 65. This means if their SPA changes, their NPA may change too. Members can choose to continue to work past their scheme pension age. The pensioner payroll pays the pension and associated benefits to members on behalf of the scheme when they leave.

7.1.2 The ‘Thinking about retirement’ booklet and the ‘What to expect when you claim your Civil Service Pension’ guide give members a brief overview of what to expect when retiring. The booklet is available to download from the member section of the Civil Service Pensions (CSP) website under ‘Publications’. The guide is part of the ‘What to expect guides’, also in the member section. The ‘Thinking about retirement’ booklet does not cover the alpha scheme. Members of alpha should be directed to the alpha scheme guide.

Your responsibilities to classic, classic plus, premium, nuvos and alpha members

7.1.3 Members who leave on or after the scheme pension age must receive payment of their benefits as soon as possible after their last day of service.

7.1.4 Table 1 below tells you what action to take when a classic, classic plus, premium, nuvos or alpha member tells you that they are retiring.

Table 1 Action to take when a classic, classic plus,   premium, nuvos or alpha member tells you that they are retiring.

Communications with scheme members:

You must agree with the Scheme Administrator arrangements to invite members who are within two years of their scheme pension age to attend a pre-retirement course.

The course will cover:

  • what happens to a pension when members decide to draw it;
  • forms and communications members will receive about drawing benefits;  
  • members benefits and what will appear on Pension Savings Statements;  
  • different types of retirement (including Actuarially Reduced Retirement, Partial Retirement and Re-Employment);
  • topping up benefits on leaving; and  
  • family benefits.

Records:

You must keep any records that can affect members pension benefits (see Section 5.2 – ‘Member records’ for details).

Data Quality:

It is your responsibility to ensure that member data provided to the Scheme Administrator is accurate and up to date to ensure that pension payments will be correct (see Section 8 – ‘Compendia, payroll and data responsibilities’ for further information).

You must make sure that you give the Scheme Administrator sufficient information to take the necessary actions to make the pensions payments on time.

Pension payments: 

If possible, give the Scheme Administrator at least four months’ notice of the expected retirement date so that they can take appropriate action to pay the pension on time.

You should notify the Scheme Administrator of the impending retirement using the Request for Services (RFS) form available in the Employer Forms section of the website. 

The Scheme Administrator will give the member information over a two staged process

At the initial quote stage: 

  • Written information on the following as applicable:
    • a statement of the estimated benefits payable;
    • options for giving up some of the pension for a lump sum/ lump sum in addition to the standard;
    • options for giving up all or part of the lump sum for an increase in pension;
    • pension payment procedures;
    • the Lifetime Allowance and Annual Allowance; and
    • allocation arrangements. 
  • A pension application form. 
  • An enquiries/returns address. 
  • A reminder to the person leaving to provide any requested documents and return the application form promptly so that benefits can be paid promptly.

At the finalisation stage:

  •   Written information on the following:
    • the final benefits payable;
    • pension payment procedures;
    • taxation of pension benefits; and
    • the possibility of the benefits being revised after payment.
  • A Lifetime Allowance Certificate.  
  • A list of useful contact numbers.

 

7.1.5 As stated in Table 1, the Scheme Administrator offers a pre-retirement course. Although members should be invited to the course if they are within two years of their planned retirement date, the course is available for any members within ten years of their intended retirement date. To find out more information regarding these sessions, including costs, please contact the Scheme Administrator Training Team at training@mycsp.co.uk or alternatively contact your Employer Relationship Manager.

7.1.6 You should also encourage members who are considering retirement to use the Retirement Modeller available in the Members section of the website. Members can use the Retirement Modeller to estimate what their pension benefits could be worth when they retire. This online tool enables members to compare up to five ‘personalised’ estimates based on different retirement options, allowing them to see which retirement option suits them the best.

7.1.7 The information that the Scheme Administrator provides to members is based on the data you provide. As the benefits processed at finalisation stage are usually calculated prior to a member’s last day of service, final pay figures may be different and this could affect the benefits that are actually paid. If there is a change to the final pay figures after a member’s last day, the Scheme Administrator will recalculate the benefits and write to the member to advise.

7.1.8 Blank 

Widow(er)’s Pension Scheme (WPS) refunds

7.1.9 All classic members contribute 1.5% of their salary towards a pension for their spouse or civil partner in the possible event of their (the member’s) death. If the member never married and remains single until the point of retiring, they may be eligible to receive a refund of these contributions (a small amount is held back in the event of the member marrying or entering a civil partnership after retirement). If they have been married or in a civil partnership for only part of their service, they are entitled to a refund of the contributions they have paid since their marriage/civil partnership ended.

This also applies to alpha members who have banked classic service.

Please note: Members who are in a civil partnership when they take their benefits will receive a refund of all their contributions for their service before 6 April 1988. This will only be paid if the member had not been married previously. In that case, they will receive a refund only of contributions paid since their marriage (or most recent marriage, as the case may be) ended.

7.1.10 classic members will not receive a refund of the additional scheme contributions payable from 1 April 2012.

7.1.11 Members of classic plus may be eligible for a refund of the 1.5% contributions they paid towards a pension for their spouse or civil partner up to 1 October 2002. To receive a refund of these contributions, the member must have been unmarried prior to this date and remained so up to the point of retiring. A small amount of the refund may be held back in the event of the member marrying or entering a civil partnership after retirement.

Unauthorised payments – late lump sum payments

7.1.12 A Pension Commencement Lump Sum (PCLS), which could include a WPS refund and/or an Additional Service Payment (ASP), paid 12 months after the pension is paid, is classed as an unauthorised payment.

Please note: An ASP is paid on retirement to a classic member who continues in service after their pension age, when they have reckonable service in excess of 45 years. The excess reckonable service is used to calculate the amount that is paid.

7.1.13 An unauthorised lump sum payment will be commuted to pension or attract a tax charge. The Scheme Administrator will be responsible for calculating the pension or tax charge.

Members reaching age 75 (classic, classic plus, premium or nuvos)

7.1.14 Members of classic, classic plus, premium or nuvos cannot build up benefits in the scheme after their 75th birthday. However, they are eligible to join either the partnership or alpha scheme from age 75. Please note: in partnership, members cannot make personal contributions, but their employer does contribute. 

If a member chooses to join either alpha or partnership or not, their employer will update the member’s record to reflect their decision and will deduct the relevant contributions.

The Scheme Administrator (MyCSP) will provide a report on a monthly basis to help you to identify members who are approaching age 75.

You must stop deducting contributions and stop paying ASLCs to the Cabinet Office Civil Superannuation Vote for these members from their 75th birthday.

You are required to inform your payroll department of any member who is approaching age 75 so that their contributions can be stopped at the relevant time.

The Scheme Administrator will notify members of their pension benefits and request information to ensure that they can test members’ unclaimed benefits against their Lifetime Allowance by their 75th birthday. Members can claim their pension immediately before their 75th birthday; however, they are not obliged to do so.

The information above does not apply to members of alpha or partnership, who can continue to build up benefits after age 75.

Members with partnership pension accounts

7.1.15 There is no scheme pension age for partnership members. They do not have to retire to take their pension. They can take their pension at any time from their 55th birthday.

Your responsibilities to partnership members

7.1.16 When the member decides to leave, you must tell your payroll to stop paying contributions from the member’s last day of service and pass details to the provider (as described in the ‘Manage Submissions Interface Guide’ issued in EPN533). The provider will contact the member detailing the arrangements.

7.2 Special cases

Recovery of debts from pensions

7.2.1 In certain circumstances, you can use retirement benefits to recover a debt that the member owes you. You should take legal advice and explore all other routes to recover the debt before approaching the Scheme Manager (Cabinet Office) for authorisation. Please see ‘Recovering debts from awards’ in Section 6 for further details.

7.2.2 You must receive authorisation from the Scheme Manager to take this action.

Email your submission to: cspsemployerenquiries@cabinetoffice.gov.uk

Forfeiting benefits

7.2.3 Please see the ‘Forfeiting benefits’ information in Section 6 (paragraph 6.1.28 onwards) for further information.

You must receive authorisation from the Scheme Manager to apply forfeiture.

Email your submission to: SMEreferrals@cabinetoffice.gov.uk