Date posted: 01/05/2008
1) nuvos – pension choices for casuals and fixed term appointees who are given an extension of contract, or become permanent
2) opting out (and back in)
3) secondments Audience This Notice will be of particular interest to: HR Managers and advisors who have responsibility for recruitment and appointments
Action: Identify and offer pension choices according to terms of contract. Circulate this information to all relevant HR contacts in your organisation.
Timing: From 30 July 2007
- EPN172 (Rev) told you about nuvos, the pension scheme which Cabinet Office introduced for new entrants from 30 July 2007. Since releasing this EPN, we have had a number of enquiries from employers about the pension choices for casuals and short-term fixed term appointees (FTA) who are already employed and are to be offered an extension of contract or a permanent position (without a break in employment) at some point after 30 July 2007.
- We have also received enquiries from employers about the pension choices available to people opting back in to the CSP arrangements and to people returning from secondment.
- The purpose of this EPN is to clarify the procedures.
- Please note that you will not be able to use the Rejoiner Calculator for these staff as they have not had a break in employment.
1(a) Casuals and FTAs who were originally employed pre-30 July 2007
- Where you wish to offer a further period of employment or permanency to casuals and FTAs who have been in a casual or an FTA post since before 30 July, you must consider their pension position and whether they will have a further choice of pension. This will depend on:
- the contractual arrangements already in place, and
- the type of employment you now want to offer.
Extension of contract
- If the casual or FTA’s current contract allows you the flexibility to extend their employment, there will be no pensions action to take. This is because the casual/FTA will have been given their pension choice(s) at the beginning of their original appointment, and these will still apply.
- Where you offer a casual or FTA a further contract (because there was no flexibility in the original contract to offer an extension) or a new contract because they are, for example, moving to a permanent post, you must take a different approach.
- Scenarios 1-4 (below) give examples of the actions you must take where someone was appointed as a casual or FTA pre-30 July and you are offering them a further or new contract.
Scenario 1 – Casual (who does not already have a partnership account)
You must offer the casual a choice of joining either nuvos or partnership.
If you offer an appointment for 12 months or more, you must automatically enrol the person into nuvos from their new start date, order Starter Pack NE1 (quoting their new start date on the DRF2) and use letter text A from EPN172 (Rev), Annex B in your Letter of Appointment (LOA).*
If you offer an appointment for fewer than 12 months, you will not automatically enrol the employee into nuvos. You must order Starter Pack NE2 and use letter text B from EPN172 (Rev), Annex B in your LOA.* The employee will have 3 months in which to make their decision whether or not to join.
*You will need to revise the wording at the beginning of the text by taking out ‘As soon as you start your new job’.
Scenario 2 – Casual (who already has a partnership account)
Where the casual had chosen to join partnership during the period of their ‘pre-30 July 2007’ employment, you should keep their partnership account open and continue to pay over contributions as before but you must still offer them the choice of nuvos or (continuing in) partnership.
You must order Starter Pack NE2 (quoting their new start date on the DRF2), and use letter text L, which is in Annex A of this EPN. This is an additional letter text to those given in EPN172 (Rev).
Note 1: the action you take is the same regardless of the length of employment you are offering.
Note 2: an employee who had chosen to join partnership in their original period of employment already belongs to the CSP arrangements. They do not have to make a decision between continuing in partnership and joining nuvos within the first 3 months of their new employment. If they choose to join nuvos, you must inform the appropriate partnership pension provider and put the employee in to nuvos from the first available pay run after you receive their PensionChoices form. (You do not backdate their nuvos membership to their start date.)
Note 3: The rationale for offering casuals the choice of either nuvos or partnership is that, under pre-30 July 2007 arrangements, a casual could only join partnership. They did not have the choice to join premium. However, there is no restriction in choice for casuals from 30 July. (To be clear on this point, you cannot offer them the choice of premium and partnership even though they started their original employment before 30 July as this choice never existed for them under premium rules.)
Scenario 3 – FTA (who has already joined either premium or partnership)
Where an FTA joined either premium or partnership at the beginning of their original employment, they will continue to be a member of that scheme. You must use letter text M. See annex A of this EPN.
Scenario 4 – FTA (who chose not to join the arrangements during their original employment)
If the FTA had opted out of premium and also did not open a partnership pension account, they will remain opted out of the Civil Service pension arrangements until they decide to opt back into premium or open a partnership account. They are not eligible to join nuvos.
You must use the letter text N in Annex A of this EPN. You should not treat the employee as a new entrant and should refer requests to opt back into premium to your APAC to take the necessary action.
At-a-glance ‘Employer Action’ table
- We have provided an ‘At-a-glance Employer Action’ table for dealing with casuals and FTAs whose employment spans 30 July 2007. See Annex B.
1(b) Casuals/FTAs employed after 30 July 2007 and whose contracts are subsequently renewed
- As from 30 July 2007, both casuals and FTAs have the same pension choices. Where you offer them a further or new contract you must follow the actions given in Scenarios 5 and 6 (below). The action you take will depend on the length of further employment you are offering and whether or not the casual/FTA joined the CSP arrangements in their first period of employment. Please note that if you are simply making use of a flexibility in the original contract to extend the period of employment, there is no action for you to take.
Scenario 5 – Casual/FTA (who has already joined either nuvos or partnership)
Where a casual/FTA joined nuvos or partnership during the course of their original employment, they will continue to be a member of that scheme.
You must use letter text M in Annex A of this EPN.
Scenario 6 – Casual/FTA (who chose not to join the arrangements at the beginning of their original employment)
If the casual/FTA had opted out of nuvos and also did not open a partnership pension account, they will remain opted out of the Civil Service pension arrangements until they decide to opt back into nuvos or open a partnership account.
You must use the letter text O in Annex A of this EPN. You should not treat the employee as a new entrant and should refer requests to opt back into nuvos to your APAC to take the necessary action.
(2) Opting Out (and back in)
- Employees do not have to join the CSP arrangements. Where they do join the arrangements, they have the right to opt out at any time after joining. Employers asked us to clarify the ‘opting in’ procedure for people who fall under these scenarios.
Employee who did not join the arrangements at the beginning of their employment.
- Where an eligible employee who did not join the arrangements at the beginning of their employment subsequently decides they do want to join, they will have the same choice they would have had at the beginning of their employment.
- So, for example, if they started work on a permanent contract in 2004, they can choose to join either premium or partnership. You should refer the employee to your APAC who will provide them with the relevant information and, where appropriate, take the necessary opting back in action.
- When you are notified by your APAC that the employee has opted back into the scheme, you should put them into the scheme they have chosen from the next available pay run.
- Someone who started employment before 1 October 2002 and who was eligible to join classic but opted out from day one of their employment can only join classic if they now wish to opt back in. They do not have the choice of partnership.
- Employees must put their request to join in writing.
Member who opted out and subsequently wishes to opt back in
- Where an employee opted out of the arrangements and subsequently wishes to opt back in, they can do so provided they have not previously opted out and back in. They can only opt in to the scheme they opted out of. They must put their request in writing.
- Under classic and nuvos, the effective date will be the earliest practicable after the APAC has received the appropriate documentation from the member and informed your payroll in time for the next available pay run.
- Under premium and partnership, the rules state that the member must give notice of 3 months and that the effective date will be either 1 April or 1 October following. In practice, however, if your APAC is able to handle the application sooner, they can do so at your discretion. (Cabinet Office is considering reviewing this rule for premium so that it mirrors the other schemes. For partnership, however, the rule will remain.)
- Members (in any scheme) can opt out once and subsequently opt back in. If they opt out again, they will not be allowed to opt back in a second time.
- Generally, when an employee is on secondment they either:
- continue to build up benefits in the CSP arrangements, irrespective of whether the borrowing or the loaning organisation pays their salary; or
- they are treated as if they are on unpaid leave, in which case they remain in the CSP arrangements but do not build up pension during their secondment.
- When a secondee returns to their Civil Service employment, they resume building up benefits in the scheme they were in before their secondment started.
- If an employee’s terms and conditions of employment excluded them from joining the CSP arrangements before taking secondment, they cannot join the CSP arrangements on their return. However, an employee who had opted out of the CSP arrangements before taking secondment would be able to opt back into the scheme they had opted out of when they return.
- The guidance on secondment is the same regardless of which Civil Service pension scheme a member belongs to.
This document refers to EPN172(Rev) and replaces specific information in Section 4.1 regarding the treatment of casuals.
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