Date posted: 19/10/2004
- Changes made to the PCSPS, CSCS and CSIBS
- This Notice covers numerous issues and should be read by all HR staff involved in dealing with issues concerned with terms and conditions of employment, downgrading, injury benefits and ill health retirements.
- To note and to issue the model office notice at annex C.(You will receive amended pages for the schemes’ rulebooks in due course.)
- Parts of this notice refer to changes when staff are in service and will appear in the re-write of Chapter 5, EPG. The revised Chapter is due for release at the end of this year.
Most of the changes announced came into effect on 22 July 2004.
- Amendments to the PCSPS, CSCS, CSIBS and CSAVC schemes were laid before Parliament on 22 July 2004. Most of the changes take effect from 22 July2004. Detailed advice and guidance has been issued to APACs but the main issues for you are outlined below.
- PCSPS members may move to a lower grade without any break in employment either at their own request, or at the requirement of their employer. No award is made when the member changes grade before the retiring age. The award is made when the member retires or leaves the PCSPS.
- The rules for premium and classic plus provide pension protection by considering salary levels up to 13 years before retirement. This provision is unaffected by the amendment scheme. You can also consider providing a grant of added years under rule C.11.
- Classic rules provide a different approach. Protection is achieved by giving them the better of:
- A single award based on all their service and their pensionable pay on retirement and;
- Two awards, one based on service and pay before downgrading and one based on service and pay after downgrading.
- You may offer improved terms to members (and optants out) who agree to move to a lower grade before the retiring age on your request. The improved terms are at your discretion and in agreement with the individual and are intended for use when there are substantial management problems, for example, where there is a promotion blockage or other structural problems in your organisation. These arrangements are not appropriate when existing pay is retained on a mark-time basis following the move to a lower substantive grade.
- You may offer improved terms to members who:
- are aged 50 or over but under pension age;
- have 5 or more years’ qualifying service; and
- Are members of classic
All costs are met by you.
- Improved terms available before the amendment scheme were an allowance equal to the reduction in salary and, if the employer considered it appropriate, an enhancement of 6 2/3 years to the reckonable service that was included in the award based on service and salary before downgrading. These were considered to be too inflexible to meet the needs of employers in all cases. The improved terms have therefore been changed as part of the amendment scheme.
- The improved terms which you can now offer are one, or both of:
- an allowance of up to the reduction in salary
- an enhancement to reckonable service included in the award based on service and salary before downgrading up to 6 2/3 years.
- Protection was previously only available to those working full-time but both standard and improved terms have now been extended to those working part-time.
Grant of added years.
- The grant of added years in classic was previously restricted to those who joined the scheme on or after 1 June 1972. This restriction has now been removed. In addition, in common with classic plus and premium, added years granted under classic may accrue evenly over an agreed period of time(typically from the date of granting to the retiring age), immediately. The latter flexibility might be appropriate, for example, where the grant of added years is being used as an alternative to a bonus payment. Attached at annex A is a temporary replacement page to section 3.4 (page 2) of the Employers’ Pension Guide. Added years can only be granted with the agreement of CSPD and the cost of the grant is paid by you.
- The forfeiture provisions in classic have been revised to reflect those in premium and classic plus. The main changes is to enshrine into the rules the existing practice concerning:
- recovery of a monetary obligation arising from a criminal act in connection with Civil Service employment; and
- withholding payment of survivor benefits otherwise due to a person who is convicted of the murder or manslaughter of the member.
- These provisions have previously been applied using common law. We have also introduced an appeals procedure similar to that in premium and classic plus. Attached at annex B is a temporary replacement page to section6.1 of the Employers’ Pension Guide.
Qualifying and reckonable service in respect of part-time service between 8 April 1976 and 31 December 1995.
- The rules have been amended to take account of the House of Lords judgement in the case of Preston – v – Wolverhampton NHS Trust, as announced in EPN71.
Statutory adoption leave and statutory paternity leave.
- As of 6 April 2003, periods of ordinary adoption leave and paternity leave count as both qualifying and reckonable service. ASLCs and added years contributions are based on the notional salary the individual would be receiving were they not on adoption/paternity leave. However, the member’s basic scheme contributions (1.5% or 3.5%) will be based on the actual pay they receive during this period (e.g. full-pay, statutory adoption/paternity pay, or nopay).
Time limits for non-Club transfers-in
- In the run up to the options exercise, we advised that we would be extending the time-limits for applications for non-Club transfers in to classic. The classic rules have now been changed to align with the premium rules to allow an application to be made at any time up to age 59. You are asked to issue the attached model office notice at annex C to staff to advise them of the further opportunity to apply for a transfer in.
- The method of calculating service credit has been changed to align to the method used by premium. This change takes effect from 22 July 2004. The time limit for a Club transfer is still 12 months from joining classic, or 12 months from becoming eligible to join premium.
Health declarations on transfers-in
- PCSPS members are permitted to apply to transfer-in pension benefits throughout their career. Because of this, we need to guard against members ‘selecting against the scheme’ by choosing a time when it would be most beneficial for them to bring a transfer in. Clearly PCSPS would be most at risk in a situation where a member applied to bring a transfer in shortly before being granted medical retirement. This has not previously been an issue in classic because, until the recent extension to the time limit, members have only been permitted to bring transfers into the PCSPS within their first 12 months of service.
- CSP’s previous advice was that any member of premium or classic plus who was on sick leave at the time they made an application to bring a transfer into PCSPS would be required to complete a health declaration. On further consideration, we have decided on a simpler approach. When applying for a transfer into either premium or classic, the member must declare that they have no reason to believe that their health may prevent them from continuing to be employed in the Civil Service until normal pensionable age. If the member then becomes eligible for retirement on ill-health grounds within 24 months of submitting their application for the transfer in, you and your APAC should investigate further and refer the case to CSPD for advice. If it can be shown that the member was aware, or should have been aware, that their health would have prevented them from continuing in civil service employment to normal pensionable age, the benefits arising from the transfer will not be brought into payment until normal pensionable age. In this context, ‘benefits’ means the benefits in respect of the basic reckonable service purchased by the transfer-in and any extra enhancement to reckonable service as a result of the extra service.
Extending the scope of serious ill-health commutation
- We are extending the scope of the serious ill-health commutation arrangements in premium. This means that those who are deferred (as well as current) premium members may now apply for serious ill-health retirement. If they meet our criteria, which is that they should be medically assessed as having fewer than 12 months life expectancy, they are awarded a lump sum equivalent to five times their annual pension.
Purchase of added years
- Members of classic plus and premium who retire on approved, flexible or compulsory early retirement terms may now purchase added years by lump sum at retirement.
Civil Service Compensation Scheme (CSCS) - Compensation for part-time members
- The rules have been amended to allow staff on period appointments (i.e. FTAs) who are members of classic to be considered for early retirement under CSCS Section 4.
Civil Service Injury Benefit Scheme (CSIBS) - Qualifying conditions for benefits
- The CSIBS provides compensation where a civil servant’s earning capacity is impaired as a result of an injury attributable to duty. The CSIBS applies to all civil servants regardless of whether they are members of the Civil Service pension arrangements. Most of the schemes’ key provisions also apply to nonsalaried fee-paid people employed directly by HM Government (for example some driving test examiners) and to UK Government Ministers. Employers have met the cost of benefits from any ‘qualifying’ injury occurring after 1 April 1998.With effect from 1 April 2003 the principal rule for deciding on whether a person has suffered a ‘qualifying injury’ changed from a requirement that the injury had to be ‘solely attributable’ to duty, to one where the injury needs to be ‘wholly or mainly’. This extends the qualifying condition from disease injuries contracted in the course of official duty, to those contracted by the nature of a member’s duties.
- There is a fundamental alteration to the treatment of those who resign from service with a qualifying injury. Previously, CSIBS provided for those resigning from service with a qualifying injury (or who were being discharged for disciplinary reasons) to potentially have benefit paid at pension age if they could demonstrate an impairment of earnings at that time, not at the time of their resignation. The CSIBS rules have been changed to allow those resigning from the service to be considered for injury benefit and, if successful, have benefit paid from the day after their last day in service.
- Those who are dismissed for disciplinary reasons can only be paid injury benefit when they reach pension age. The rule changes being introduced specify that those resigning where disciplinary proceedings are pending against them may also only be able to receive injury benefit at pension age – and therefore not at the time of their resignation.
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