Action: Note the action required for calculating ASLCs and partnership contributions when you are dealing with retrospective pay awards and late payments of salary.
Consider your contractual arrangements with your external payroll provider (if applicable) if you have not already built such requirements into your payroll contracts.
When you make a retrospective pay award or when you backdate a member’s pension choice to the day they started and the retrospective period straddles more than one financial year, you must calculate the arrears of employer and employee pension contributions using the percentage rates that are set for each year the period covers.
This EPN clarifies the action you need to take. You may wish to refer to Section 3 of the Employers’ Pension Guide (EPG) for detailed information on the schemes within the Civil Service pension arrangements and their corresponding rates of employee and employer contributions.
You must calculate the arrears in relation to the contribution levels set for each year the arrears cover. You must pay the arrears of contributions to either:
The employee contributions percentages for all these schemes have remained the same since the new arrangements were introduced in October 2002. The rates are: classic 1.5% classic plus 3.5% premium 3.5% These rates may not necessarily remain the same in future; if they change we will issue an EPN to inform you. You will also need to calculate arrears relating to Added Years contracts and the CSAVCS. classic, classic plus and premium employer contributions The ASLC rates can change from year to year. You must therefore check the rates for each year the retrospective award covers. We tell you the ASLC rates for each forthcoming year in an EPN so you can check this information by referring to the old notices. You can find the EPNs on the employer pages of our website. Details on how to access the site are at the end of this EPN.
There are two elements to the employer contributions for partnership pension accounts – these are termed ‘age-related’ and ‘matching’ contributions (Sections 3 and 4.2 of the EPG give details). The percentage rates have not changed since the introduction of partnership in 2002. If they change in the future, we will let you know in an EPN. However, please always check with us if, at some point in the future, you make a retrospective pay award and are unsure about where to find the information on the percentage rates.
You must check whether a partnership member has had a birthday during the back-dated period to ensure you allocate the correct rate of age-related contributions. (Section 4, Annex 4J of the EPG gives details on calculating partnership contributions.) You must also check whether the member has changed their contribution rate, which could change the level of ‘matching’ contributions.
You must also calculate arrears relating to the mini-ASLC rate. (You pay this to Cabinet Office:Civil Superannuation in respect for all members in partnership to cover death and illhealth benefits.)
You must also take account of the respective earnings cap that relates to each year the arrears cover for high earners who are subject to the cap.
You will also need to take similar action if you have to backdate the start of a member’s pension, and the period of backdating straddles more than one financial year. Contractual arrangements with external payroll providers If your organisation employs an external payroll provider, you should ensure that they have a mechanism for dealing with retrospective pay awards.
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Civil Service Pensions