Up to and including 30 September 2002, you would have contributed 1.5% of your pay towards the cost of providing benefits for your widow, widower or surviving civil partner after your death (the Widow(er)s’ Pension Scheme – WPS). These contributions were mandatory and applied to all members regardless of marital status. However, if you were single on 30 September 2002 and remain single when you retire, you may be entitled to a partial refund of WPS contributions.
From 1 October 2002, your contributions increased to 3.5% of your pensionable earnings to pay for the range of benefits that the premium part of your pension covers. On 1 April 2012 this was changed to a variable contribution rate dependent upon your pensionable earnings.
As a general rule, only permanent items of pay are pensionable. This includes any allowances that your employer tells you are pensionable but will not include payments such as overtime.
Bonus payments do not normally count as pensionable earnings. But if you receive pensionable bonus payments, both you and your employer will pay contributions on them.
You may also have some non-cash pensionable earnings – for example, some people’s pensions will take account of a uniform allowance, and others may have an allowance for accommodation. In these circumstances, you and your employer will also pay contributions based on the equivalent cash value of these non-cash pensionable earnings.
If you are on reduced pay during maternity leave (and in certain other circumstances) your employer will make contributions based on the pay that you would have expected if you were not off work. You will make your contributions based on your reduced pay.
There are tax limits on your pension contributions and your pension benefits. You may have to pay extra tax if you exceed the limits. If you are a higher earner you also need to be aware that your pensionable earnings may be limited to the ‘earnings cap’ unless you joined the Civil Service pension arrangements before 1 June 1989.
The Scheme Administrator (MyCSP) can provide you with more information.
Do I get tax relief?
Your employer takes your contributions from your pay before working out the tax, so you will automatically receive full income tax relief. This is subject to HMRC limits.
Your employer’s contributions
Your employer makes significant contributions to your pension.