Date posted: 01/03/2011

Audience: This Notice includes guidance sent on behalf of the Cabinet Office and is for the immediate intention of:

  • Finance Directors and Managers involved in the preparation of resource accounts.


  • Ensure that a copy of this document is issued to each member of staff that is involved in the preparation of the Remuneration Report, and that it is read and understood by them.
  • Send the note at Annex 13D to all senior management reported on in departmental Remuneration Reports. This does not include Ministers.
  • Replace Section 13 of the Employers’ Pension Guide (EPG) with the attached pages.

Timing: You must apply this guidance when you prepare the resource accounts for 2010-11. You should discuss timings with your pension administrator as soon as possible.

The Remuneration Report

  1. Resource accounts must include a ‘Remuneration Report’, which contains information about the pay and pension packages of Ministers and the senior management team*
  2. Please note that there are two main changes to the requirements for this year. As part of the commitment to increase transparency and accountability in Central Government financial reporting the following disclosure requirements are being introduced:

i. The separate reporting of salaries and bonuses in the Remuneration Report; and

ii. The reporting, by way of note to the accounts, of Civil Service exit packages awarded to all staff.

Disclosure of salary and pension information

  1. Following a decision by the Information Commissioner in 2006, salary and pension information about an individual can be disclosed without their permission. All such information must be disclosed in Remuneration Reports, unless the member argues, giving reasons, that publication would prejudice their rights, freedoms or legitimate interests, or that it would or be likely to cause unwarranted substantial damage or distress to themselves or another. If a member raises such an argument (under section 10 of the Data Protection Act (DPA)) you must consider whether to accept it. You are strongly advised to take legal advice in such a case, because if you decide not to publish this may be challenged under the Freedom of Information Act. You can also find further details in the Government Financial Reporting Manual (FReM) paragraph 5.2.18.

Disclosure of Compensation at an individual level

  1. Before disclosing compensation paid to a member of your senior management team you must:
  • Notify the individual concerned that you propose to publish details of the benefits they received;
  • Invite them to see what you intend to publish in the report; and

* Please note that references to ‘senior management’ that follow in this EPN are taken to mean members of your most senior management team only (i.e. board members).

  • Tell them that they can make a case for non disclosure under s10 of the DPA.
  1. If a member objects to disclosure of their compensation payments, they must explain why disclosure is likely to cause them substantial and unwarranted damage or distress. They can not merely say that they refuse permission. You will need to take legal advice on whether the individual’s arguments satisfy the exemptions under the DPA. If the member is successful in arguing that disclosure should not take place, you should not refer to it in the Remuneration Report.
  2. Annex 13D includes a note for you to send to senior management to tell them of the arrangements for disclosing compensation payments and their right to object under the DPA. It is important that this notice is also issued to any new senior management if they are likely to be included in the Remuneration Report.
  3. Ministerial severance payments are made under statute, outside of the Civil Service Compensation Scheme arrangements, and are not covered by this guidance.

As employers, it is your responsibility to describe the full implications of any compensation paid out. This must include ALL monies paid out to the member both at the time they left and any future payments payable to them as part of their compensation package. See Annex 13C for an example of the narrative. You should explain in a footnote that the cost of the compensation to you as the employer may not be exactly the same as that paid out to the member. Annex 13C is an example of what a Remuneration Report might look like. Please note that you should not make changes to the notes explaining pension benefits without the agreement of the Cabinet Office.

Compromise agreements

  1. Where you have a compromise agreement with an individual, which contains a confidentiality clause, information about their compensation is not normally disclosed. However, it is possible for disclosure to take place in exceptional circumstances and with an individual’s express permission. Wherever a compromise agreement exists you should always obtain legal advice.

Disclosure of exit packages

  1. HM Treasury consulted Departments last year about the disclosure of exit packages awarded to all staff. The outcome of that consultation is that this year, for the first time, employers must provide summary data on their use of exit packages. This is in addition to the details of individual packages for those covered by the Remuneration Report. You must show the number of exit packages by cost band, and these need to be broken down by the number of compulsory redundancies and the number of other departures agreed. Comparative data must also be provided for last year (2009–10).
  2. For staff who left under the former compulsory, flexible or approved early retirement terms, the cost to be used is the capitalised cost of the whole package (including annual compensation payments or early/enhanced pensions). For staff who left under the new voluntary exit or voluntary redundancy terms, the cost to be used must include any top-up to compensation provided by the employer to buy out the actuarial reduction on an individual’s pension. You may need to obtain information about the costs of exit packages under the former terms from your pensions administrator (the costs of packages under the new terms will be reflected in the bills you are sent by Capita Hartshead).
  3. Compulsory redundancies are exits where staff have received notice of dismissal on the grounds of compulsory redundancy. Exits to be reported in the category of other departures include all cases where compensation has been paid, including dismissals on the grounds of inefficiency.

Accounting for exit package transactions

  1. Benefits under the Civil Service Compensation Scheme have traditionally been accounted for on the basis that the scheme acts as agent, and the employer acts as principal. We do not believe that there has been a change in existing resource accounting guidance as a result of the new arrangements and, as such, Departments should follow the FReM. If you have any questions about this issue, you should contact Philip Trotter in HM Treasury’s Assurance and Financial Reporting Policy Team (


  1. The forms Annex 13A and 13B should be used to request the pensions and compensation information you require for your accounts from your pensions administrator, and the pensions information you require for your accounts from the House of Commons (HoC) Pensions Unit (see Annex 13B). You should send your request as soon as possible so that they can ensure they have all the data they need on the individuals concerned. Pensions administrators will not be able to start calculations until they have updated the pension records to reflect the March payroll. It is therefore essential to discuss with your pensions administrator when your figures will be available
  2. Employers are responsible for identifying the individuals for whom disclosure information is required. Employers must request pension information from their pensions administrator using the Annex 13A. On receipt of the Request Form, the pensions administrator will carry out the necessary pension calculations and enter the details in the relevant boxes in the Request Form. The form is then returned to the employer contact for their action.


  1. You must enter an up to date salary for the member and an accurate figure of the contributions paid by the member. You will have to contact your payroll to provide you with this information. If you do not supply this information promptly you will delay your pensions administrator from getting the information back to you.. The payment of legitimate expenses is not part of the salary. You must send the completed Annex 13A to your pensions administrator.
  2. The pensions administrator will not process your calculations unless the information is sent to them on a fully completed Annex 13A. Once the pensions administrator has received the fully completed Annex 13A, it will take them some time to return the completed calculations to you. Please contact your pensions administrator to discuss these timescales. You are responsible for the security of sending the Annex 13A to the pensions administrator so please ensure that you are following your department’s guidelines.


  1. For the first time, you should identify any bonuses paid, separately from salaries, in bands of £5,000. Permanent Secretaries decided not to accept individual non-consolidated performance related pay awards (bonuses) in relation to the 2008-09 and the 2009-10 performance years. No bonus payment should be reported for Permanent Secretaries, but you should include a footnote explaining the situation (see Annex 13 C for example).

Change of factors

  1. The actuarial factors used in the calculation of Cash Equivalent Transfer Values (CETVs) were changed during 2010, due to changes in demographic assumptions and the move from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI) as the measure used to uprate Civil Service pensions.

The new factors mean that the CETV value shown in your report for 31/03/10 will not be the same as the corresponding figure shown in last year’s report. You should therefore add a footnote to explain this (see Annex 13C).

Partial Retirement

  1. Under the scheme rules, people may take partial retirement if they reshape their job so that their pensionable earnings are reduced by at least 20%. On partial retirement they may draw all or part of their pension and their accrued benefits/reckonable service are adjusted accordingly.
  2. For the purposes of disclosure, someone who has taken partial retirement will be reported as having a mix of active and pensioner benefits. This disclosure should be made both in the year when partial retirement happens and in subsequent years.

Reporting year in which partial retirement takes place

  1. The start-of-year figures will be displayed as normal but the end of year figures will reflect a mix of active and pensioner membership benefits:


Member 2 has taken partial retirement from 1 December 2010 and he draws a pension of £43,572 and a lump sum of £130,716. (These figures must reflect any commutation decision and reflect the award sent to Capita Hartshead. However, if there was a pension share against the member then the figures reported must be pre-debit)

At the end of the scheme year Member 2 has accrued benefits not yet in payment .) Disclosure of salary, pension and compensation information for 2010-11 EPN296 of £290 pension and a lump sum of £870. Add the pension/lump sum paid and the pension/lump sum accrued, but not yet in payment, together. You will receive the completed Annex 13A from your pensions administrator as below.

Row 10

Pension at ED (£)

£43,862, of which £43,572 is in payment

Row 11

Lump sum at ED (£)

£131,586 of which £130,716 has been paid

Row 10 £43,862, of which £43,572 is in payment Pension at ED (£) Row 11 £131,586 of which £130,716 has been paid Lump sum at ED (£)

Subsequent reporting year(s)

  1. It should still be noted in the Remuneration Report that a member has taken partial retirement and the amount of any pension and lump sum taken. This information should be published as a footnote in the Remuneration Report for as long as the member is being reported on.
  2. The lump sum disclosed for the 'active' element not yet in payment will only apply to members in classic and classic plus as per normal.


  1. There are many reasons that would cause a negative value in the “real increase in CETV” including:

i. If a rise in pensionable salary is less than the rate of inflation (with the current pay freeze, this is likely to happen in some cases);

ii. If someone joined or left mid year:

iii. In classic plus the lump sum for service up to 30.9.02 will always give a negative value

iv. The pension factors for the over 60s decrease the value of the pension that could have been taken at 60.


This document replaces EPN268


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1 March 2011
Last updated:
24 April 2023