Date posted: 07/12/2004
Issue: Employer responsibilities when dealing with Added Years contracts and enquiries from members.
This Notice will be of particular interest to:
- HR staff who deal with requests from members to buy added years to supplement their PCSPS pension, who process staff transfers and who are responsible for processing changes in conditioned hours or pay.
Action: To note correct procedures
- Concerns have been raised by Trade Union side about the administration of Added Years contracts. In particular, issues relating to new employees (particularly probationers), staff transferred between departments and staff whose pay changes either as a result of a change to their conditioned hours or long term sickness.
This EPN reminds you:
- when to refer members to your APAC, and
- your responsibility to inform your payroll provider/and APAC, as your communications route dictates, of required actions.
- Premium members are entitled to start and stop Added Years contracts at any time and therefore such contracts can be taken out by probationers. You must, therefore, refer anyone who requests more information on added years at this stage to your APAC. Your APAC will then send out the relevant information and will inform you if the member decides to pay for added years.
- There have been instances, when a member has been transferred between Civil Service employers, of their new employer not arranging for payments to be deducted from salary in respect of an Added Years contract taken out before the transfer. In some cases where the member is close to pension age it has not been possible for the member to make up the shortfall in contributions before retiring.
- While it ultimately remains the member’s responsibility to check their payslip you should have systems in place to ensure that details of existing deductions from salary are identified and passed to your payroll provider.
Changes in conditioned hours or pay
- If a member’s conditioned hours change then their Added Years contributions should be amended to reflect the change. It is essential that you give details of any such changes to your APAC as soon as they are agreed.
- If a member moves to half pay or pay at pension rate as the result of long term illness then their Added Years contract will be suspended. This will result in a reduction in the total number of years purchased. They should however be given the option to continue to make payments at the same cash amount provided this would not exceed Inland Revenue limits. Again, you will need to have robust procedures in place to cover this scenario.
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