The public service pensions consultation response sets out how the government will remove the discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members.
Following a public consultation, it has been decided that members will receive a ‘deferred choice’ of which pension scheme’s benefits they would prefer to take at the point they retire.
Members will be able to choose to receive legacy pension scheme benefits or benefits equivalent to those available under the reformed pension scheme for service between 2015 and 2022. Not all members are better off in the legacy schemes, so it is important that individual members can choose which scheme benefits they want to receive.
From 1 April 2022 all those who continue in the Civil Service will do so as members of alpha regardless of age, meaning all members will be treated equally in terms of which pension scheme they are a member of.
Promote the consultation response within your organisation to ensure pension scheme members:
1. Are made aware of the response
2. Know where to access the Public Service Pensions Consultation response: https://www.gov.uk/government/consultations/public-service-pension-schemes-consultation-changes-to-the-transitional-arrangements-to-the-2015-schemes
3. Are clear if they are in scope for the changes
4. Know there is currently nothing for them to do, as the process of passing legislation and implementation needs to take place
5. Are informed that further information will be shared in due course
6. If they have a union, let them know the consultation response has taken place
After negotiations with trade unions, the reforms to public service pensions schemes that took place in 2015 did not apply to those within 10 years of retirement. The Court of Appeal found this to be discriminatory against younger members and so the government is taking steps to fix this.
The government published a consultation in July as part of that process. The consultation sought views on two methods for addressing the discrimination. Having considered the responses to the consultation, the government has decided to implement a ‘deferred choice underpin’ which was the approach favoured by the majority of respondents.
This affects members who were a member of the Civil Service Pension Scheme before 1 April 2012 and who moved to alpha on 1 April 2015. All members with service between 1 April 2015 and 31 March 2022 will then receive a choice at the point at which they retire whether to take legacy pension scheme benefits or reformed scheme benefits in relation to that period.
Allowing individuals to make their choice at retirement means they will be able to make their decision knowing what their pension benefits will be under either option. This will reduce the risk of members making the wrong decision for them.
In addition to this, the consultation set out that from 1 April 2022, all active members, regardless of age, will be members of the reformed scheme (alpha). This approach ensures the government’s aims of rewarding hardworking public servants and ensuring schemes are sustainable and affordable in the future.
There is currently nothing for members to do, as the process of passing legislation and implementation needs to take place.
If you have any queries about the Public Consultation, please contact: cspsemployerenquiries@cabinetoffice.gov.uk
If you have a question about the distribution of EPNs, or would like to receive them in a different format, please contact: EPN@MyCSP.co.uk.
You can find electronic copies of the Employer Pension Guide, all current EPNs and forms in the Employer section of the Civil Service Pensions website.
This notice is for employers and should not be issued to scheme members.
Members can find information about their pension by visiting the member's section.