Your responsibilities when staff leave before pension age

6.1 General

Staff leaving before the scheme pension age

6.1.1 Staff may leave the Civil Service before their scheme pension age and receive pension and/or compensation payments under the Civil Service Pension (CSP) arrangements. The scheme pension age for classic, classic plus and premium members is usually age 60. For nuvos members the scheme pension age is currently age 65. In alpha, a member’s Normal Pension Age (NPA) is the later of their State Pension Age (SPA) or age 65.

You can find information on how to treat staff who are retiring at or after the scheme pension age in Section 7 – ‘Your responsibilities when staff leave at or after the pension age’.

6.1.2 We explain below the various different categories of early departure. When the member is entitled to receive benefits payable under the Civil Service Compensation Scheme (CSCS), you will be responsible for meeting the costs of these benefits.

6.1.3 Staff leave the CSP arrangements before the scheme pension age for one of three main reasons:

  • Resignation or dismissal - See 6.2 (Resignation or dismissal from the Civil Service),
  • Early departure, including ill health retirement - See 6.3 (Early departure and ill health), and
  • Death - See 6.4 (Death of a Civil Servant).

6.1.4 You must inform the Scheme Administrator (MyCSP) of any resignations or terminations of employment at the earliest opportunity, particularly on the death of a member.

6.1.5 A member who leaves before the scheme pension age with less than two years’ qualifying service cannot receive pension benefits unless:

  • they have transferred benefits into the CSP arrangements from a personal pension scheme or other non-occupational pension arrangement, or
  • they have previous service within the CSP arrangements which qualified for preserved benefits (see part 4, chapter I, section 71 of the Pensions Act 1993).

Please note: If a member has preserved benefits and their current period of service is in the alpha scheme (providing the break is over five years) there is no link between the two periods. This only applies if they have had no service in a public sector pension scheme during the break. If the member then leaves with less than two years qualifying service, they are not entitled to pension benefits in the alpha scheme. Different rules may apply to a member if they have transferred benefits into the pension scheme.

Staff transferring to another employer who is part of the CSP arrangements

6.1.6 A member transferring between employers who are both covered by the CSP arrangements will remain in the same scheme as long as the break between employments is 28 days or less. The transfer will be recorded on the member’s pension record via the interface provided by each employer.

6.1.7 It is important that the member’s continuity of service is maintained. As long as the break between employments does not exceed 28 days, the two periods of employment will be treated as continuous for pension and compensation purposes. Any break will be treated as unpaid leave.

6.1.8 Blank.

6.1.9 When you transfer a member to another employer covered by the CSP arrangements, you should complete form OGDTF1 (at Annex 6B) and send it to the member’s new employer to advise them which part of the scheme the member belongs to. The form will also confirm the members’ contribution rates for partnership, if applicable, and details of any added years, AVCs, added pension or EPA they may have. The information enables the new employer to take the correct action.

6.1.10 Blank.

6.1.11 You will need to ensure that you have a contact at the new employer so that you can tie up any loose ends without delay.

Bulk transfers of staff from your employment

6.1.12 A bulk transfer is an arrangement whereby special transfer terms are negotiated to allow pension scheme members to transfer their pension benefits to their new employer’s pension scheme to receive benefits of equivalent value. It often follows from a TUPE (Transfer of Undertakings (Protection of Employment) Regulations) transfer or a machinery of Government change.

It covers accrued pension benefits for all the staff that chose to transfer past service to the new pension scheme.

6.1.13 Section 12 – ‘Compulsory bulk transfers of staff’ gives you detailed guidance on what to do if you are considering a compulsory transfer of staff.

Recovering debts from awards

6.1.14 There are certain circumstances where you may recover a debt from an award when a member is leaving early. The Treasury’s document, “Managing Public Money,” (www.gov.uk/government/publications/managing-public-money) explains how and when to recover overpayments. The debt you propose to set off must be legally recoverable, and you may wish to check this with your legal adviser before taking any action. You must explore all other routes to recover the debt before approaching the Scheme Manager (Cabinet Office).

6.1.15 You must consult the Scheme Manager at an early stage. They will give you written authority if they think it is appropriate for you to recover the debt from the member’s award. You will then need to liaise closely with the Scheme Administrator to ensure the correct action is taken.

6.1.16 The Scheme Manager will only give authority to you to exercise set off of a debt where you send them an application accompanied by either:

  • an acknowledgement, signed and dated by the employee of the existence and exact amount of the debt (that is, the amount to be set off against a CSP or CSCS benefit); or
  • a copy of an enforceable order of a County Court or other appropriate court, or in consequence of an award of an arbitrator or, in Scotland, an arbiter to be appointed (failing agreement between the parties) by the sheriff.

6.1.17 You must take care to ensure that any acknowledgement of the debt by the debtor does not constitute a charge or assignment of benefit, which is unlawful under section 5(1) of the Superannuation Act 1972. This states: ‘(1) Any assignment (or, in Scotland, assignation) of or charge on, and any agreement to assign or charge, any benefit payable under a scheme made under section 1 of this Act will be void’.

6.1.18 This also applies where you seek to set off an overpayment of CSCS benefits while an appeal against refusal to grant ill health retirement is in progress (see ‘Paying CSCS benefits while an appeal against refusal to grant Ill Health Retirement is in progress’ (paragraph 6.3.8 to 6.3.11) for details).

Suggested form of acknowledgement

6.1.19 The suggested form of acknowledgement is as follows:

I [member’s name] hereby acknowledge that as at (date) I owe [name of department/organisation] the sum of £ [amount] in respect of [nature of debt].

Signed [member’s signature] Date [date of signing]

6.1.20 Once the Scheme Manager, has given you written authority to set off the debt, you will need to copy this to the Scheme Administrator who will confirm to the member the amount of the set off and its effect on benefits under the scheme.

Duty of care when processing quotations and awards

6.1.21 You have a duty of care in ensuring that your staff who are members of the CSP arrangements receive accurate quotations of pension benefits.

6.1.22 You must have robust procedures in place between yourself, your payroll (or payroll provider) and the Scheme Administrator for transmitting data accurately (see Section 8 – ‘Compendia, payroll and data responsibilities’ for more guidance). You must build in appropriate deadlines for the individual stages of each process to avoid delaying any resulting award. You need to consider the length of time it takes to communicate with the member regarding their leaving options. If you are offering exit terms, for example, you will need to supply the member with a quotation of their pension benefits. Section 6.3 (‘Early departure and ill health’) provides more details.

6.1.23 Blank

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Forfeiting benefits

6.1.28 In exceptional circumstances, members forfeit their rights to benefits under the CSP arrangements. They automatically forfeit their benefits if convicted of treason. The Minister for the Civil Service may decide to withhold a member’s benefits, either completely or partly, if they are convicted of:

  • offences under the Official Secrets Act 1911; or
  • an offence connected to the civil servant’s employment that a government Minister certifies as gravely injurious to the State or liable to lead to serious loss of confidence in the public service.

6.1.29 You must not take any action without advice from the Scheme Manager.

6.1.30 Where a potential beneficiary is being investigated and/or has been arrested for such a crime, any pension or benefit payment should be temporarily suspended until either a conviction has been made, the investigation/prosecution is dropped, or there is an acquittal – in which case the benefits may then be paid. You must inform the Scheme Administrator at the earliest opportunity to withhold payment.

6.1.31 Forfeiture may also apply where a member has a monetary obligation arising from a criminal or negligent act in connection with their employment.

6.1.32 Anyone who is convicted of the manslaughter or murder of a scheme member cannot receive any benefits from the scheme as a result of the death. You must contact the Scheme Manager at the earliest opportunity. They will advise you on the process and will take things forward on your behalf.

Who makes the decision on whether a member has forfeited their benefits?

6.1.33 The Minister for the Civil Service reserves this function. In practice, the Scheme Manager will liaise with the Minister’s office and let you know the outcome.

6.2 Resignation or dismissal from the Civil Service

Resignation from the Civil Service

6.2.1 Members who resign with 2 or more years’ qualifying service, or have transferred benefits into the CSP arrangements from a personal pension scheme or other non-occupational pension arrangement, will continue to have benefits in the CSP arrangements, unless they transfer them to another pension scheme.  The benefits are preserved until the member decides to claim them at or after scheme pension age and are increased in line with the rise in prices. The member may decide to claim their preserved benefits before scheme pension age but must meet certain criteria (see ‘Paying a preserved award early (paragraphs 6.2.10 and 6.2.11).

6.2.2 We use the term ‘deferred member’ for staff who leave with preserved benefits.

Member leaving with less than two years’ service

6.2.3 Blank

6.2.4 When a member leaves within their first three months of service they will usually receive a refund of their contributions (via payroll).This is an automatic process if the member leaves within one month. If, however, the member leaves after one month but within three months, you are required to seek instruction from the Scheme Administrator before processing the refund. This is to ensure that the member is due a refund and not preserved benefits due to, for example, already having preserved benefits for previous service.

6.2.5 If they stay over three months but under two years, they can choose to have a refund of their contributions or to transfer out their accrued pension.

6.2.6 The Scheme Administrator will offer this option to the member. If the member opts for a refund of contributions, the Scheme Administrator will reimburse the member the amount of contributions they have paid, less tax.

6.2.7 You cannot be reimbursed for employer contributions (ASLCs).

Please note: Table 1 below shows what action to take when a member of the CSP arrangements resigns from service or is dismissed for efficiency purposes. Table 2 shows what action to take when a partnership member resigns from service or is dismissed for efficiency purposes.

6.2.8 Blank

6.2.9 Blank

Paying a preserved award early

6.2.10 Members who joined the CSP arrangements on or before 5 April 2006 can receive their preserved award before reaching pension age if they are:

  • aged 50 or over and choose an early payment (actuarially reduced) award; or
  • a classic member, in ill health and would have been eligible for medical retirement if they had remained in the Civil Service; or
  • a classic, classic plus or premium member who is given a medically certified life expectancy of less than 12 months; or
  • a classic member, aged 50 or over and can demonstrate compelling personal reasons for early payment. 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. The Scheme Administrator will be able to give further advice.

6.2.11 Members who joined the CSP arrangements on or after 6 April 2006 can receive their preserved award before reaching pension age if they are:

  • aged 55 or over and choose an actuarially reduced award; or
  • a classic member, in ill health and would have been eligible for medical retirement if they had remained in the Civil Service; or
  • a classic, classic plus, premium, nuvos or alpha member who is given a medically certified life expectancy of less than 12 months; or
  • a classic member, aged 50 or over and can demonstrate compelling personal reasons for early payment. 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. The Scheme Administrator will be able to give further advice.

Enhanced benefits for members who resign

6.2.12 Blank

6.2.13 You can enhance active members’ pension benefits or transfer terms by making additional contributions to the scheme to purchase added pension.

6.2.14 The Scheme Administrator can advise you of the cost of providing additional pension for a particular member. You must ask the Scheme Manager to agree to what you are proposing before you make any formal offer to the member. Section 3.4 (‘Scheme Flexibilities’) gives more advice on reserved decisions.

Table 1 - Standard action for resignation and dismissal for members in classic, classic plus, premium, nuvos and alpha

Standard action for resignation and dismissal for members in classic, classic plus, premium, nuvos and alpha based on employer interface type.

Compendia Interface Type

Action

Standard and Manual Interface

 

 

 

Resignation – notify your payroll that the member’s service is ending. Details of the member’s resignation will then be provided to the Scheme Administrator via the monthly interface (see Note A below). The Scheme Administrator will then take appropriate award action (see Note B below).

Dismissal – notify your payroll that the member’s service is ending and pass the details to the Scheme Administrator for appropriate award action by completing the Request for Services form available in the Employer section of the website (see Note B below).

Full/Quarterly Interface

Resignation and Dismissal – notify your payroll that the member’s service is ending and pass the details to the Scheme Administrator for appropriate award action by completing the Request for Services form available in the Employer section of the website (see Note B below).

Note A: It is important to ensure that the information provided on the interface is accurate and up to date to allow the Scheme Administrator to identify and process these leavers. The ‘Standard Interface Developers Guide’ should be followed to ensure the correct data items are provided, however, the following data items are essential for processing resignations:

  • Members name
  • Members NINO
  • Members last day of service
  • Members Employer, and
  • Leaver reason code – for resignations this is “5”.

Note B: An ‘award’ for someone resigning with preserved benefits is simply notification of the benefits that they will receive when they eventually retire.

Scheme Administrator action

6.2.15 The Scheme Administrator will, among other things, give members information about:

  • their pension and when it becomes payable;
  • where to obtain further information about transferring their benefits out of the CSP arrangements;
  • how and when to claim their award;
  • information about increases in line with inflation applied to their benefits each year;
  • details of the Civil Service Pension Scheme website where they can obtain further information.

6.2.16 Blank

6.2.17 Blank

Table 2 - Standard action for resignation and dismissal for partnership

Table 2 Standard action for resignation and dismissal for partnership

As soon as you learn of a resignation or dismissal, pass the details to the provider (as described in the Manage Submissions Interface Guide issued in EPN533) and;

  • Tell your payroll to stop paying contributions. 
  • Tell the Scheme Administrator (via your payroll, according to your agreed processes) so that the Compendia record can be updated.

Records:

Keep any records that can affect the members’ pension.

Provider action:

The provider will contact the member detailing the arrangements.

Dismissal on grounds of efficiency

6.2.18 For pension purposes, employees who are dismissed are usually treated as if they had resigned. You can, if you wish, also pay them a lump sum compensation payment as long as they have at least one year’s service. You will meet the cost of the compensation payment.

6.2.19 The Scheme Administrator, on your request, will calculate the maximum compensation payable on dismissal on the grounds of efficiency. You then need to decide how much of this compensation calculation, if any, you want to pay by following the guidance attached to EPN 471.

Please note: Compensation is not payable to employees dismissed on the grounds of efficiency if they are over their scheme pension age. The scheme pension age for classic, classic plus and premium members is age 60. For nuvos members the scheme pension age is currently age 65. In alpha, a member’s Normal Pension Age (NPA) is the later of their State Pension Age (SPA) or age 65.

6.2.20 Decisions about compensation should be based on the employee’s health condition(s) and circumstances. Both long term and intermittent health conditions can be considered; if the condition is not grounds for medical retirement, but affects attendance and/or performance. It is important to note that unsatisfactory attendance or poor performance dismissal criteria should not be applied in such cases.

6.2.21 If you are dismissing a member on efficiency grounds caused by medical reasons, you must first consider them for Ill Health Retirement (see ‘Ill Health Retirement (IHR)’ (section 6.3.7) for details).

6.2.22 Once a decision has been made to dismiss an employee for efficiency reasons, and compensation is due, the Scheme Administrator will calculate the level of compensation payable to the member based on your instruction.

6.2.23 All compensation payments must then be paid through your payroll, as announced in EPN556. The Scheme Administrator will calculate the member’s preserved benefits and inform the member as described in 6.2.15 (‘Scheme Administrator action’).

6.2.24 The Scheme Administrator will give classic members the option of receiving their pension benefits immediately and without reduction by giving up their compensation lump sum if they:

  • are age 55 or over on the last day of service; 
  • eligible for a preserved award; and
  • have been awarded 100% compensation.

6.2.25 If a member chooses to receive their pension benefits immediately, the Scheme Administrator will process the payments and bill you separately for the cost.

6.2.26 Blank

6.3 Early departure and ill health

Civil Service Compensation Scheme (CSCS)

6.3.1 The CSCS allows you to pay compensation to members who leave on early departure terms. It is a statutory scheme and gives you authority as an employer to compensate members for losing their job.

6.3.2 CSCS benefits are also payable to optants out of classicclassic plus, premium, nuvos and alpha and those with a partnership pension account.

6.3.3 Blank

CSCS benefits for members who have transferred service in from a ‘By analogy’ scheme

6.3.4 Service transferred in from a ‘By analogy’ scheme (i.e. a scheme that has the same rules as the CSP arrangements) can only count towards the member’s CSCS benefits if Scheme Manager approval is given.

Early departure

6.3.5 There are three categories of early departure. Before you can launch any scheme you will need approval from the Scheme Manager, Cabinet Office. You will need to complete the relevant template at Annex 6C and forward to redundancyschemes@cabinetoffice.gov.uk

6.3.6 The categories are:

Voluntary Exit (VE)

This can be offered in the interests of workforce efficiency and where employers wish to reduce staff numbers, to support organisational changes, address promotion blockages and where there is limited efficiency. There is no compulsion on individuals to accept the offer; it is an agreement between the employer and employee.

There is a standard tariff of one month’s pay per year of service up to a maximum of 21 months’ pay for those under scheme pension age. Employers may offer more or less than the standard tariff subject to limits. To offer more than standard tariff, employers must have Scheme Manager approval.

Tapering of compensation will apply where the member is close to the scheme pension age. For members who moved into alpha from one of the PCSPS schemes on or after 1 April 2015, the compensation is tapered in relation to their Normal Pension Age (NPA) in alpha

For those over scheme pension age there is a maximum of six months' pay. For members who have moved into alpha from one of the PCSPS schemes, it is the alpha NPA which applies.

Voluntary Redundancy (VR)

This can be used in a variety of situations where the employer has identified business changes which may result in redundancies:

  • The work may be changing or reducing
  • The work will be done in a different way
  • The work will be stopping, or
  • The location of the work is changing/the office is closing.

A Voluntary Redundancy (VR) scheme must be offered before Compulsory Redundancy (CR) and the employer must have begun formal consultation with the Unions about possible redundancies before a scheme is launched. The VR scheme should cover at least all staff selected for redundancy, but if the scheme is run before selection is complete it may cover all those who are at risk (i.e. all those in the unit of redundancy, also known as the redundancy pool).

There is no compulsion on staff to apply for VR at this stage, but they must be aware they could be made compulsorily redundant at a later stage of the same scheme and receive CR terms. However, if an employee applies for VR but does not meet their employer’s criteria for release (or was never offered VR) they cannot be subject to the CR terms at a later stage of that redundancy exercise. Staff in this position will be entitled to the VR terms.

Employers must offer the standard tariff of one month’s pay per year of service up to a maximum of 21 months’ pay for those under scheme pension age.

Tapering of compensation will apply where the member is close to the scheme pension age. For members who have moved into alpha from one of the PCSPS schemes on or after 1 April 2015, the compensation is tapered in relation to their NPA in alpha.

For those over scheme pension age, there is a maximum of 6 months' pay. For members who have moved into alpha from one of the PCSPS schemes, it is the alpha NPA which applies.

Compulsory Redundancy (CR)

This is used in the same situations as Voluntary Redundancy (VR). However, individuals should first be offered VR, making it clear that they are at risk of CR, before employers move to a compulsory scheme. The CR scheme cannot cover anyone beyond the staff who were (or should have been) included in the preceding VR scheme.

Any member of staff who was turned down for VR (or was never offered VR) and is later made compulsorily redundant under the scheme linked to that VR scheme, will receive VR terms. This protection does not extend to anyone who did not apply for VR or refused an offer of VR linked to the CR scheme.

There is a standard tariff of one month’s pay per year of service up to a maximum of 12 months’ pay for those under scheme pension age.

Tapering of compensation will apply where the member is close to the scheme pension age. For members who have moved into alpha from one of the PCSPS schemes on or after 1 April 2015, the compensation is tapered in relation to their NPA in alpha.

For those over scheme pension age, there is a maximum of six months' pay. For members who have moved into alpha from one of the PCSPS schemes, it is the alpha NPA which applies.

Please note: Annex 6F contains further detailed information about VE, VR and CR. This includes further information on the tariffs, employer’s discretion, Scheme Manager approval, member’s options and other important information.

Ill Health Retirement (IHR)

6.3.7 You can grant members of any age Ill Health Retirement if the Scheme Medical Adviser believes their breakdown in health is likely to be permanent and prevent them from carrying out their work. The document ‘Ill Health Retirement - procedural Guidance for Employers’ (which is in Annex 6J), provides further information. Under alpha, nuvos, premium and classic plus there are two tiers of benefits payable depending upon whether the member cannot do their own job or cannot work again in any capacity.

Please note: if a member is due to be moved into alpha while they are in the process of an IHR application (or an appeal against a decision to turn down their application) you must not move the member until you are aware of the final decision. They must have exhausted all their options to appeal.

Where the member does not meet the IHR criteria, or IHR is not appropriate, you may consider dismissing them on the grounds of efficiency (see ‘Dismissal on grounds of efficiency’ (6.2.18 to 6.2.25) for further information).

The following paragraphs tell you the steps to take to guard against the possibility of overpaying CSCS benefits to a member who has appealed against your decision not to give them IHR.

Paying CSCS benefits while an appeal against refusal to grant Ill Health Retirement is in progress

6.3.8 Where someone is leaving voluntarily (e.g. resigning, retiring or leaving under voluntary exit terms (including voluntary redundancy)) they are choosing those exit terms rather than leaving on IHR. Therefore any IHR application will come to an end when the individual leaves. That would include any IHR application at the appeal stage. It is therefore very important that you as the employer make this very clear to any employee who is considering leaving under voluntary terms who also has (or might be eligible for) an application for IHR.

However, where a person is dismissed or made compulsorily redundant, as long as an IHR application has been submitted before their last day of service, the application can continue to its conclusion (again that would include the appeal process). It should be explained to the member that should the IHR terms be granted, any leaving package paid to the member would be replaced by the IHR benefits. Therefore, any amount already paid, would need to be recovered from those benefits.

To avoid an overpayment scenario, you should only pay part of any CSCS lump sum equal to the lump sum that they would receive on IHR. Before doing so, you should obtain a written acknowledgement from the member. Paragraph 6.3.11 refers. Tell the Scheme Administrator that the member has an IHR appeal outstanding.

6.3.9 Should the appeal fail, you can pay the balance of the CSCS lump sum. You will not have to pay interest as this is a discretionary payment.

6.3.10 If the member’s appeal succeeds, write to the Scheme Manager for approval to set off the CSCS benefits against their IHR benefits. Include a copy of the member’s acknowledgement of the debt.

6.3.11 Suggested form of acknowledgement:

I, [member’s name], hereby acknowledge that, should I be granted Ill Health Retirement, I will owe [name of department/organisation] £[amount] which is equal to the sum of Civil Service Compensation Scheme benefits I have/will have received in respect of the termination of my employment.

Signed [member’s signature] Date [date of signing]

Table 1 CSCS – Step by step for Employers

Table 1 below gives guidance on the actions that need to be taken when carrying out an Exit Scheme. There is a ready reckoner at Annex 6G which shows the estimated costs of Voluntary Exit, Voluntary Redundancy and Compulsory Redundancy, both the compensation lump sum and the cost of buying out the reduction for earlier payment.

Table 1 CSCS – Step by step for Employers

In all cases:

  • Employers need to consider the terms they wish to offer their staff. There is an employer calculator to help you to estimate costs (Annex 6H - Standard Tariff). You also need to determine the sift criteria to use and ensure that all member data is current and correct.
  • Obtain Scheme Manager approval to run an Early Exit Scheme (see ‘Form and guidance for CSCS applications’ at Annex 6C for the appropriate application form). You should send your requests to redundancyschemes@cabinetoffice.gov.uk
  • If your scheme is approved, you will be given a Scheme Identifier which you will need to give to your Scheme Commissioner (at the Scheme Administrator).
  • Contact your Scheme Commissioner to advise them you have authority to run an Early Exit Scheme and arrange to discuss numbers involved and agree timelines and handling arrangements. Once agreed you will be asked to complete an F1 (Statement of Work) form so that the deliverables can be agreed. 

The Scheme Commissioner can be contacted at exit.schemes@mycsp.co.uk

Voluntary Exit and Voluntary Redundancy

1. You will need to obtain the relevant scheme guidance and information from the Civil Service Pensions website.

2. There is a Step-by-Step guide for members which you can use as the basis for your own guidance. This can be found at Annex 6E.

3. Ask for expressions of interest from your employees. You must:

  • tell them how to apply, and how the process will work (see Annex 6E - Civil Service Compensation Scheme - Step by   step process) with return and contact details; 
  • give them a deadline date;
  • and  make available:
    • the appropriate employee compensation calculator for the scheme you are offering;
    • Compensation Scheme Information Form (CSCS1 (Annex 6K));
    • Voluntary Exit / Voluntary Redundancy Scheme guide (as appropriate);
    • Other materials as required from the Civil Service Pensions website.

4. You must make the appropriate employee compensation calculator available for your staff to use. Employees will need to have details of their current service and pay. In most cases, pension scheme members will be able to identify their current service from their Annual Benefit Statement (ABS). If an ABS has not been issued, you may have to deal with enquiries from the employees.

5. Note: the ABS service figure will not be relevant if the scheme member has transferred in, aggregated any service, or if they are buying added years or added pension. The ABS includes all service qualifying for a pension, but the compensation payment is based only on current service as defined in section 5.d of Annex 6F (‘Civil Service Compensation Scheme 2010 Guidance for employers’).

6. If the employee is interested they must complete a Compensation Scheme Information Form (CSCS1 – Annex 6K) which supports their expression of interest in the scheme and asks them for pension information. This information will enable the Scheme Administrator to include appropriate information in their quote.

7. Employees must return the CSCS1 forms to you (the employer) by the required deadline.

8. After the deadline you will need to consider all the applications and decide who meets your sift criteria as appropriate.

9. Send the CSCS1 forms that have passed your sift to the Scheme Administrator with details of any employees you would like to receive a quote recorded on the control sheet provided by the Scheme Administrator. You should have agreed with the Scheme Commissioner how this is to be done, and the timescales for processing.

10. You will need to tell any applicants who have not been selected they will not receive a quote.

11. You will receive quotes and costs from the Scheme Administrator for all the employees detailed on the control sheet.

12. The quotes will include a covering letter, information to support the employee’s circumstances, a statement of the compensation benefits and any relevant pension information. Information will be provided for those who have reached minimum pension age regarding taking reduced pension benefits or buying out the reduction. The employee will have some choices to make, on how they wish their benefits to be paid by completing a Compensation Declaration Form (CDF).

13. You must send the quotation and CDF to the employees concerned. Again employees must return the completed forms to you (the employer) by the required deadline.

14. Once all the forms have been received from the employees, you may need to do another sift if your offer is oversubscribed. You also need to remove those that have declined or those that you cannot afford. You must tell these employees that they have not been successful and destroy all paperwork when the exercise is complete.

15. You must send the remaining CDFs to the Scheme Administrator by the agreed deadline with a revised control sheet, for processing - again using the method agreed with the Scheme Commissioner.

16. The Scheme Administrator will process the CDFs based on the chosen options, and notify you of the final compensation lump sum for payment through your payroll.

17. If buy-out or added pension is applicable to the member’s case, the Scheme Administrator will finalise the pension benefits on the chosen basis and send you a bill when the payments have been processed. In this scenario the Scheme Administrator will detail any residual compensation to be paid via payroll where applicable.

18. If there are changes to the benefits, for example, due to a retrospective pay award or new data being received, the Scheme Administrator will recalculate the value of the benefits. Any additional compensation will be paid via payroll. If the change results in an overpayment of compensation, you must seek recovery from the employee. The Scheme Administrator will notify the employee of any changes to their pension benefits.

Compulsory Redundancy

1. You cannot give notice of Compulsory Redundancy unless you have already offered the person Voluntary Redundancy.

2. Depending on the numbers involved, you may wish to arrange with the Scheme Commissioner to check those employees’ data to make sure that it is as accurate as possible. You should then   arrange to issue quotes with the notice of Compulsory Redundancy so that staff have the information immediately.

3. If there are issues with your data, or if the numbers involved are too great, you will need to tell the staff who are to leave and ask them to complete the Compensation Scheme Information Form (CSCS1). This will enable the Scheme Administrator to produce the compensation payment quote.

4. You will need to obtain the Compulsory Redundancy scheme guidance. There is also a step–by-step guide (at Annex 6E) which is customised to reflect your own arrangements, contact points and deadlines (the Step–by-Step is only appropriate if you are not issuing immediate quotes which explain the process to the employee).

5. You must:

  • tell them how the process will work (see Annex 6E - Civil Service Compensation Scheme - Step by step process)   with return and contact details;
  • give them a deadline date;
  • and make available:
    • the Compulsory compensation scheme employee calculator (for information) (optional depending on agreed arrangements);
    • Compensation Scheme Information Form (CSCS1 (Annex 6K));
    • Compulsory Redundancy Scheme guide;
    • Other materials as required from the Civil Service Pensions website.

6. If you are unable to issue quotes immediately with the notice of Compulsory Redundancy, you could make the Compulsory Redundancy employee calculator available for your staff to use. Employees will need to have details of their current service and pay. In most cases, pension scheme members will be able to identify their current service from their Annual Benefit Statement (ABS). If an ABS has not been issued, you may have to deal with enquiries from the employees.

7. Note: the ABS service figure will not be relevant if the scheme member has transferred in, aggregated any service, or if they are buying added years or added pension. The ABS includes all service qualifying for a pension, but the compensation payment is based only on current service.

8. If immediate quotes are not issued, the employees must complete the CSCS1 form and return them to you (the employer). If you do not receive them, you should continue with the redundancy.

9. When all CSCS1 forms have been returned you will need to forward them to the Scheme Administrator with details of any employees you would like to receive a quote recorded on the control sheet provided by the Scheme Administrator. You should have already agreed how these are to be sent with your Scheme Commissioner.

10. You will then receive quotes, Compensation Declaration Forms (CDFs), option forms and costs from the Scheme Administrator.

11. You must then send the quote and CDF to the employees. Again the employee must send the completed forms to you (the employer) by the agreed deadline. If they refuse, you should continue with the process and pay a lump sum compensation payment with a preserved award.

12. Once you have received all the forms from the employees, you must send the CDFs and a revised control sheet to the Scheme Administrator for processing, again using the method agreed with the Scheme Commissioner.

13. The Scheme Administrator will process the CDFs based on the chosen options, and notify you of the final compensation lump sum for payment through your payroll.

14. If buy-out or added pension is applicable to the member’s case, the Scheme Administrator will finalise the pension benefits on the chosen basis and send you a bill when the payments have been processed. In this scenario, the Scheme Administrator will detail any residual compensation to be paid via payroll where applicable.

15. If there are changes to the benefits, for example, due to a retrospective pay award or new data being received, the Scheme Administrator will recalculate the value of the benefits. Any additional compensation will be paid via payroll. If the change results in an overpayment of compensation, you must seek recovery from the employee. The Scheme Administrator will notify the employee of any changes to their pension benefits.

Scheme Administrator action

6.3.12 In addition to the information stated in table 1, the Scheme Administrator will also give members information on:

  • their pension, including taking it early;
  • buying added pension;
  • the effects of re-employment with an employer who participates in the CSP arrangements;
  • benefit payment procedures and voluntary deductions from pensions;
  • taxation of pension benefits;
  • the allocation arrangements (classic members who are not being medically retired only).

The information provided will be tailored to the individual circumstances.

6.3.13 The Scheme Administrator will also confirm with the member their current death benefit nomination.

Fixed term appointments

Appointment Terminates at the End of a Fixed Term Contract

6.3.14 A fixed term employee whose contract is terminated on the expiry date on the grounds of redundancy may be entitled to compensation under the scheme. The expiry of a fixed term appointment is not automatically a dismissal on the grounds of redundancy and you should consider taking legal advice on this point. Where the termination is on the grounds of redundancy, Scheme Manager approval for making a payment is not required. You are also not required to follow the procedures set out in the Cabinet Office Protocol for handling surplus staff situations (2016 Protocol – Civil Service Redundancy Principles). In addition, the requirement to offer Voluntary Redundancy before making an employee compulsorily redundant does not apply where a fixed term appointment is terminated on its expiry date. As a matter of good practice you should advise the employee when nearing the end of their contract that it will not be extended.

6.3.15 As long as the fixed term employee has at least 2 years qualifying service and is being dismissed for redundancy, they will receive the same compulsory compensation terms as a permanent employee. You should notify the Scheme Administrator in the normal way asking for Compulsory Redundancy terms and giving a Scheme Reference number CR (name of employer e.g. DWP) FTAE (CR DWP FTAE). No compensation is payable for contracts under two years.

Early Termination of a Fixed Term Contract

6.3.16 If you propose to terminate a fixed term contract early for redundancy, you must first make an offer to that employee for a departure using Voluntary Redundancy terms (and give three months’ notice). You will not require Scheme Manager approval or need to follow Scheme Manager Protocol. You should notify the Scheme Administrator in the normal way asking for Voluntary Redundancy terms and giving a Scheme Reference number of VR (name of employer e.g. MOD) FTAM (VR MOD FTAM). Where such offer is not accepted, you can go straight to Compulsory Redundancy without seeking Scheme Manager approval. You should notify the Scheme Administrator in the normal way giving a scheme reference number CR (name of employer) FTAM (CR MOD FTAM).

6.3.17 Where such an offer is not accepted, you can go straight to Compulsory Redundancy without seeking Scheme Manager approval. You should notify the Scheme Administrator in the normal way giving a scheme reference number CR (name of employer) FTAM (CR MOD FTAM). If the individual’s contract stipulates a notice period for early termination, they will receive the same Compulsory Redundancy terms under the CSCS arrangements as a permanent employee, with the appropriate notice period stipulated in the contract.

6.3.18 If the employee’s contract does not stipulate a notice period for early termination they should receive the better of the Compulsory Redundancy terms under section 12 of the CSCS or section 8 of the CSCS (the compensation payment under section 8 will be calculated by Government Actuary’s Department (GAD)).

6.3.19 If an employer wishes, those on a fixed term appointment can be considered for early departure under a departmental wide Voluntary Exit or Voluntary Redundancy scheme. If accepted they must be treated the same as permanent members and the normal terms will apply. Approval from the Scheme Manager will be required for the scheme. If approved, the scheme will be given a scheme reference number. This number should be used for permanent and fixed terms employees when requesting quotes from the Scheme Administrator.

Please note: Any notice periods for early termination of fixed term contracts will not have the effect of extending the period of the contract.

Injury Benefit

6.3.20 A person who has suffered an injury that qualifies under the Civil Service Injury Benefit Scheme who then leaves on Voluntary Exit, Voluntary Redundancy or Compulsory Redundancy is entitled to ask for Injury Benefit.

This applies to those who leave before their pension age and those leaving at or after their pension age. The usual process for determining Injury Benefit entitlement applies. Employers need to ask the Scheme Administrator to ask the Scheme Medical Adviser to assess the extent to which the person’s injury has impaired their earning capacity and whether apportionment is appropriate.

Redundancy following a TUPE transfer

If you have any questions about TUPE and the CSCS, please email cspsemployerenquiries@cabinetoffice.gov.uk with “CSCS and TUPE” in the title.

6.3.21 Under review

6.3.22 Under review

6.3.23 Under review

6.3.24 Under review

6.3.25 Under review

6.3.26 Under review

Staff who TUPE transferred and had opted out of a previous employer’s pension scheme

6.3.27 Under review

Staff who TUPE transferred and are not eligible to join the CSP arrangements

6.3.28 Under review

6.3.29 Under review

6.3.30 Under review

Re-employment – potential effects on pension and CSCS benefits

6.3.31 Rejoining the CSP arrangements may affect a member in a number of ways if they had previously left with an award. Your recruitment process must identify individuals who are receiving or have received their benefits from an employment covered by the CSP arrangements before they are appointed. You should do this by using the Pensions Questionnaire and Joiner Tool (available on the Employer section of the website – see ‘Your responsibilities when staff join’ (section 4) for further information).

6.4 Death in service

Death of a classic, classic plus, premium, nuvos or alpha member whilst in service

6.4.1 As soon as you learn of a death in service, you must contact your payroll and the Scheme Administrator immediately and tell them of the death (for partnership members, please see ‘Steps to follow for partnership members’ in paragraph 6.4.5). The Scheme Administrator needs to know information such as next of kin and the name of the personal representative (this is a person who produces a Grant of Probate, Will, Letters of Administration or, in Scotland, Confirmation of Executor).

You should complete a Request for Services form to notify the Scheme Administrator of the death in service. The form will prompt you to provide information such as the next of kin/personal representative, as well as details of the member’s death benefit nomination (if any) and other important information relating to the member’s pension.

We advise your HR contact, who deals with such sensitive issues, to contact the Scheme Administrator for further information on:

  • what information they usually require, and
  • their process for handling matters concerning the deceased’s pension benefits.

This will then help the Welfare Officer explain the role of the Scheme Administrator to the next of kin/personal representative.

6.4.2 You will need to get evidence of the death, such as the death certificate. If no death certificate is available, you must make your own checks. This is to make sure that the death has taken place. You may check, for example, by getting evidence from the coroner or police that they are satisfied that the person has died.

6.4.3 The Scheme Administrator pays the death benefit immediately where there is proof of death and a valid nomination form. Where there is no valid nomination, they will pay the death benefit to the personal representative or the deceased member’s estate on receipt of the required documents. This could include a Grant of Probate,  Will, Letters of Administration or, in Scotland, Confirmation of Executor.

6.4.4 As well as the death benefit, the Scheme Administrator may pay family benefits to the legal widow or widower, civil partner, children and other dependants of the member.

Steps to follow for partnership members

6.4.5 You must inform your payroll of the death as soon as possible. Your payroll must then inform the pension provider via the interface as advised in the ‘Managing Submissions Interface Guide’ issued in EPN533. You must also advise the Scheme Administrator of the death as soon as possible so that they can work out any benefits for the member’s dependants.

Death of a classic, classic plus, premium, nuvos or alpha member before pension age who has left your employment

6.4.6 If a classic, classic plus, premium, nuvos or alpha member has left your employment and dies before they reach pension age, the Scheme Administrator works out and pays the death benefits. The benefits are based on the member’s award at the time that they left your employment. The Scheme Administrator pays the death benefit lump sum to the nominee or the legal representative, as appropriate. They will also pay any pensions that may be due to surviving dependants.

6.4.7 If you receive any calls regarding a deferred member’s death benefits, you should refer the caller to the Scheme Administrator.

6.4.8 If the member was in either classic or classic plus and not married when they left your employment and remained unmarried until they died, a refund Widow(er)’s Pension Scheme (WPS) contributions may be payable.  It does not form part of the death benefit. The representative of the deceased member must apply for it separately, in writing, to the Scheme Administrator. You must pass any written applications that you receive to the Scheme Administrator.