New Fair Deal

GLD provides employment law guidance to government departments and their agencies on staff transfer and transactional matters and can advise on adherence to Fair Deal and New Fair Deal Policy for all types of Staff Transfers, to include out sourcing or insourcing, retenders, transfers within the public sector and transfers within government and the pension consequences.

For further information please contact: EmploymentGroupTupe@governmentlegal.gov.uk

This is a compulsory transfer of staff from the Civil Service to an independent provider of public services.

One of the features of New Fair Deal is that staff, whose employment was transferred to an independent contractor under old Fair Deal before October 2013, can now rejoin Civil Service Pensions when the contract is renewed or in certain circumstances before the contract ends (with the agreement of the contracting authority). The current or new employer will be admitted to Civil Service Pensions under Fair Deal and eligible employees will rejoin the scheme for future service.

This involves the compulsory transfer of employees, who were previously outsourced under old Fair Deal and who have met the eligibility criteria to rejoin the civil service pension schemes.

Individuals that were previously a member of Civil Service Pensions will rejoin the scheme that they would have been in (depending on their protection status in 2015) had they not left Civil Service Pensions.

A Subsequent Transfer occurs when eligible employees have rejoined the civil service pension schemes following a 2nd generation transfer and are later subject to another compulsory transfer. Subsequent Transfers are treated in a similar way to 1st Generation cases.

An Admission Agreement is a legal contract that sets out the requirements and obligations of all parties involved in an admission to Civil Service Pensions. The agreement must be signed by the Contracting Authority, the Admitted Body, and the Minister for the Cabinet Office.

The Admission Agreement is provided by the Scheme Manager (Cabinet Office) and should reflect the contractual position. Employers are advised to speak to the Scheme Manager (Cabinet Office) before making their application.

This is the independent provider to which services, and employees covered by new Fair Deal, have transferred or will transfer. This will be an organisation which has been awarded a contract to deliver public services on behalf of a Government department (the Contracting Authority).

This document consists of an Application Form along with general guidance including subjects such as eligibility, the admissions process, interaction with Cabinet Office and MyCSP, communicating with members and other ongoing responsibilities of the Admitted Body.

The application guidance can be found using this link

This is a pension scheme which has been set up to be “broadly comparable” to Civil Service Pensions. Transferring staff are entitled to pensions in respect of future service that are worth as much as they would have had, were they to have remained with their original scheme. It does not need to offer identical benefits, however, it must offer the same range of benefits, with the same overall value.

GAD provides actuarial advice to a number of UK occupational pension schemes, including some of the largest pension schemes in the country as well as many of the public service schemes.

For further information please contact GAD at stafftransfers@gad.gov.uk

As soon as the contract has been awarded, the Contracting Authority must contact the Scheme Manager (Cabinet Office) to start the admission process. This can be done by emailing: pcspsadmissions@cabinetoffice.gov.uk 

The Admission Agreement covers benefits under:

1. Principal Civil Service Pension Scheme (classic, classic plus, premium and nuvos)
2. the Public Service (Civil Servants & Others) Pensions Regulations 2014 (alpha)
3. Civil Service Additional Voluntary Contribution Scheme (CSAVC)
4. Partnership Pension Account
5. Partnership Pension Account Death Benefit Arrangements (part of 2)
6. Partnership Pension Account Ill Health Benefit Arrangements (part of 2)

An Admission Agreement does not cover benefits under the Civil Service Compensation Scheme or the Civil Service Injury Benefits Scheme.  

Admission Agreements should be signed before the effective date of admission. If there is a delay between the effective date of admission and the date the Admission Agreement is signed, the Contracting Authority/Admitted Body will be liable for claims made against Civil Service Pensions.

Please note:

• employers will not be admitted to Civil Service Pensions until the Admission Agreement is signed;
• a retrospective or backdated Admission Agreement may be completed at the discretion of the Scheme Manager (Cabinet Office). Requests will be considered on a case by case basis.

As an Admitted Body or employer within Civil Service Pensions, has an important role to play to ensure the efficient and accurate administration of pension benefits. The Admission Agreement outlines what the Admitted Body must do to achieve this.

The Admitted Body will be required to work with the Scheme Administrator (MyCSP) on the following key activities during the on-boarding process.

Payroll implementation and knowledge transfer

The Admitted Body will need to work with the Contracting Authority to understand the specific contractual terms and conditions of the transferring employee. They will also be required to set-up their HR and payroll systems in order to pay employees correctly.

Payroll data

It is important that, alongside salary information, the Admitted Body captures the information they will need to make the right pension deductions, at the right time.

Historic member information

When employees move between employers covered by Civil Service Pensions, their employment history should move with them. As the responsibility for holding and maintaining this information lies with the member’s current employer, the Admitted Body may be asked to validate and confirm pension records held on the pension administration system. The Admitted Body should make sure that full personal data and employment details are obtained for each employee as part of the handover process for employees moving between employers.

The Scheme Administrator (MyCSP) charges a fixed fee to manage on-boarding activities.

On-boarding fees

For transfers of less than 100 people, the fee is £5,567 (plus VAT). For transfers of 100 people or more, the fee is £13,423 (plus VAT).

This charge covers the administration of setting up a new employer on the Civil Service Pensions administration system, project support in the on-boarding process and support to develop and test monthly interface files.

Other costs

There are other costs associated with being an admitted employer which include:

• Employer Contributions (ASLC / mini-ASLC);
• Charges made by the Scheme Medical Advisor;
• Charges made by the Scheme Actuary in such cases where the admitted body wishes to pay additional pensionable pay or allowances and/or where a bulk transfer is required;
• A one-off charge to the Scheme associated with the additional pensionable pay or allowances;
• Charges made by the Scheme Administrator (MyCSP) which are outside of the core administration, for example, early exit calculations;
• Any charges in respect of breaching the terms of the Admission Agreement which has increased the Scheme's costs or liabilities;
• Any contributions in respect of Civil Service Additional Voluntary Contributions or partnership contributions paid directly to the provider.

The Contracting Authority and new employer are responsible for determining if an individual is eligible to rejoin Civil Service Pensions under New Fair Deal.  The assessment is based on a number of criteria. A Member Eligibility Factsheet is available for employers to use when making this decision. 

Yes. Eligible employees can waive their Fair Deal protection if they wish. However, if they choose to do this they will permanently lose their entitlement to Fair Deal protection.

As an employer, you must consult with your employee, their trade union or staff representative before they sign an agreement to waive their protection under New Fair Deal.

A copy of the signed waiver form, alongside the new Request for Services form should be sent to the Scheme Administrator (MyCSP).

A copy of the signed waiver form and a completed copy of Schedule 4 of the Admission Agreement should be sent to the Scheme Manager (Cabinet Office).

Once the employee's eligibility to rejoin Civil Service Pensions has been determined, you must establish which section within Civil Service Pensions the employee should rejoin.

You will need to evidence or confirm the employee's original scheme membership and the member’s age at 1 April 2012. In principle, members will rejoin the scheme they would have been in if they had not been compulsorily transferred out of the Civil Service.

Further details about how to establish member eligibility can be found in this factsheet.

Employers need to issue a welcome letter to members being re-admitted to Civil Service Pensions. This will confirm the section of Civil Service Pensions the employee is being admitted into, together with other important information.

HM Treasury has produced guidance for Staff Transfers in the Public Sector. It states that outsourced employees moving back into Civil Service Pensions from their current employer's broadly comparable pension scheme, have the option to protect their accrued rights via a bulk transfer arrangement.  The Contracting Authority should commission GAD for this purpose.  It is usually the sending scheme that performs the bulk transfer option exercise.

Assuming that good quality data is received promptly from the ceding scheme administrators and all parties are well engaged with the process, a bulk transfer exercise should be completed in around 9 to 12 months (this expected timeframe allows for members having 3 months in which to make their decision whether or not to take a bulk transfer option).

There will be a charge for loading member data to the pension administration system once the bulk transfer exercise has been completed. If you require additional services from Civil Service Pensions, please discuss this with the Admissions Project Manager.

The Employer Pension Guide (EPG) highlights what you, as an employer, need to know about Civil Service Pensions, and your responsibilities in delivering the arrangements to your staff.

The EPG should be read in conjunction with the Admission agreement, Employer obligations letter (issued by Cabinet office) and the Employer Pension Notices (EPNs), which update and/or supplement the guide.

The EPG can be found using this link.

The Scheme Administrator's external training team can provide New Fair Deal training to employers. For more information about training, visit: www.mycsp.co.uk/training/training-services

Usually, when a member rejoins Civil Service Pensions, if their current salary and combined pension in payment exceeds their previous salary (including inflation), we will deduct the excess from their pension (which could reduce the pension to zero). This is called abatement.

Under New Fair Deal, previous Civil Service pension benefits that are already in payment before the individual rejoins Civil Service Pensions are not subject to the normal abatement rules and will continue to be paid to the member unreduced.

If the member takes their Civil Service pension benefits after rejoining Civil Service pensions, normal abatement rules will apply, and their pension may be reduced or suspended entirely while the person is a member of the scheme.

Members who left their Civil Service pension benefits preserved when they were compulsorily transferred from the Civil Service will have the option of aggregating (joining up) their benefits, within 12 months of rejoining Civil Service Pensions. This only applies to members returning to the classic or premium schemes and who are not tapering into alpha.

If the member is tapering into alpha the member has 12 months to aggregate their benefits from the effective date of rejoining or before the tapered enrolment end date, or leaving service, whichever is earlier.

If the member is rejoining nuvos any previously preserved nuvos benefits will be automatically aggregated unless the member requests that the benefits are kept separate.

If the member is moving into alpha on day one, they will not be able to aggregate. However, if the original TUPE transfer occurred less than five years before the transfer effective date the member’s preserved benefits will be cancelled and a final salary link will be established. Any preserved nuvos benefit will be cancelled and benefits will be increased in line with prices.

Yes. However, they are advised to read the Opting Out Factsheet to understand the benefits that they will be giving up if they leave the scheme.

If you have not yet been admitted to Civil Service Pensions, or if you are supporting an application for admission please contact: pcspsadmissions@cabinetoffice.gov.uk

If you have been recently admitted to Civil Service Pensions and have a question about any guidance regarding the administration of pension benefits, please contact your Service Delivery Manager (SDM) at the Scheme Administrator (MyCSP).

In October 2013, the government reformed its Fair Deal policy. As a result of the change, staff whose employment was compulsorily transferred from the public sector would continue to have access to a public service pension rather than a broadly comparable pension scheme. 

This is a compulsory transfer of staff from the Civil Service to an independent provider of public services.

One of the features of New Fair Deal is that staff, whose employment was transferred to an independent contractor under old Fair Deal before October 2013, can now rejoin Civil Service Pensions when the contract is renewed or in certain circumstances before the contract ends (with the agreement of the contracting authority). The current or new employer will be admitted to Civil Service Pensions under Fair Deal and eligible employees will rejoin the scheme for future service.

Individuals that were previously a member of Civil Service Pensions will rejoin the scheme that they would have been in (depending on their protection status in 2015) had they not left Civil Service Pensions.

It is the responsibility of the Contracting Authority to provide the Scheme Manager (Cabinet Office) with details of the proposed admission to Civil Service Pensions. The Scheme Manager will issue the Contracting Authority with an Application Form and associated guidance, which should be completed and returned to the Scheme Manager.

The Scheme Administrator (MyCSP) will allocate a project manager to support the employer (Admitted Body) with the practical aspects of joining Civil Service Pensions and transferring data to the pension administration systems via the development of the monthly payroll interface.

It usually takes between three and six months to admit a new employer, however it may take longer depending upon the complexity of the transfer. 

GAD is a non-profit non ministerial department. GAD work as actuaries and advisers for the public sector (UK and overseas) and also for private sector clients, where this is consistent with government policy and does not impair their ability to serve the UK government. Amongst other services, GAD provides guidance to government departments and other bodies on how to apply and implement New Fair Deal as well as calculating the service or pension credits available on bulk transfer (if needed) and the amount of funding required by the relevant public sector schemes.

There are three main stages to any bulk transfer exercise under New Fair Deal:

Stage 1 – Preparatory Work

The first step is for the Contracting Authority to engage the Government Actuary’s Department (GAD) in relation to the bulk transfer. GAD will then work with the other scheme’s actuary to determine the basis for the service and/or pension transfer. Under New Fair Deal the benefits provided will be of equivalent actuarial value which means that if the two schemes were identical, service would be provided on a “day-for-day” basis and any pension on a “£ for £” basis. However, schemes often provide differing benefits, and so factors are calculated to allow for this. This preparatory work will also will include discussion and agreement of the transfer value available from the transferring scheme and an assessment of the possible shortfall, if any, against the amount required by Civil Service Pensions to cover the pension credits to be granted. The current “Broadly Comparable” (“BC”) pension scheme will need to provide details of members’ benefits under the BC pension scheme, including their Qualifying Service, in a prescribed format. The data will be required for GAD’s calculations and member option packs (see below) and the qualifying service data will be added to the members’ new pension record to ensure that benefits which require a minimum length of membership (e.g. preserved awards, ill-health pensions) are calculated correctly in the event that a member leaves service shortly after re-joining the Civil Service pension arrangements.

Stage 2 - Options Exercise

The current contractor’s BC pension scheme will be required to communicate with members around the bulk transfer options, collate responses and advise its actuary of final list of members’ elections. Members will normally be given a three month window, from the date of issue of the option pack, in which to decide whether or not they wish to transfer their deferred benefit from the Broadly Comparable pension scheme into Civil Service Pensions on the basis outlined in their option pack (terms are set by GAD on behalf of the Contracting Authority) .

Stage 3 - Payment of the Transfer Value and addition of Service/Pension Credits

The BC pension scheme’s actuary will advise GAD which members have opted to transfer their benefits under the bulk transfer options exercise together with their calculated final transfer value from the BC pension scheme (in line with the agreed basis). GAD will review the data and agree the bulk transfer value calculated by the broadly comparable scheme’s Actuary, then calculate Civil Service Pensions’ requirements and associated shortfall (if any) and notify these figures to the Contracting Authority. The Broadly Comparable pension scheme will then pay the bulk transfer value to the Civil Service account (managed by the Pensions and Finance Team at Cabinet Office) and the Contracting Authority will pay any agreed shortfall.

Finally, the Scheme Administrator will add details of the service and/or pension credits awarded to transferring members to their records once these have been confirmed and supplied by GAD.