EPN284 - Civil Service Pension Scheme

Audience:HR staff involved with early exit departures under the CSCS

Action:

To note the new CSCS proposals
To note the current CSCS terms will now be available until at least the 30 November 2010

Timing: As required

Current CSCS terms

A letter and a Question and Answer (Q&A) document was sent out to colleagues across the Civil Service from Sir Gus O’Donnell on 7October about new CSCS proposals the Government hope to introduce later this year. If for any reason you have not seen these documents you can find them on our website.
A HR Director letter was issued on 7 October, (copy attached) which gives more information on the Bill that will cap the current CSCS terms. It also confirms the process for you to follow, if you have any early exits before the Bill becomes law. The most important change to note is that the current CSCS terms are now available up until at least 30 November 2010 which means the 22 October 2010 date no longer applies.
You can still offer Approved Early Retirement (AER) and Flexible Early Severance (FES) with a last day of service before 1 April 2011 if your Accounting Officer approves value for money. For more expensive terms and later leaving dates Cabinet Office will need to approve your business case before you launch any early exit scheme and will consult with Treasury where appropriate. Where you have issued notice of redundancy or you have agreed voluntary terms with individuals before 30 November 2010 (or when the Bill becomes law, if later) the current CSCS terms will not be capped.

New CSCS proposals

The new tariff for voluntary exit and compulsory redundancy is set out in the Q&A with examples. As answer 10 indicates there are still technical details to be finalised on the new CSCS arrangements and we will keep you informed of developments. We can confirm that:-

The new notice period of 3 months will apply to everyone leaving on early exit/redundancy, including voluntary early exits where employers are not already formally consulting on redundancy.
Those over scheme pension age, leaving on compulsory redundancy or on voluntary terms will receive 1 months pay for each year of service up to a maximum of 6 months pay and will be entitled to 3 months notice as above.
Staff who have reached minimum pension age1 will still have the opportunity to buy out the full actuarial reduction on their pension using a severance payment, their own money or a combination of both.
Under voluntary exit where formal consultation on redundancy is underway, employers may offer a top up to those people who wish to use the whole of their severance payment to buy out the actuarial reduction on their pension if the severance payment does not meet the full cost of the buy out. The top up cannot be paid on compulsory redundancy. Whether this will be available under other voluntary exit schemes is one of the details still to be resolved.
Those who are re-employed following early exit will be required to pay back the severance payment pro-rata if they are re-employed within the lesser of 6 months or the notional period of the severance payment. Please be aware that it will be the rules at the point of re-employment that will apply.

As we explained in EPN280, your PSC maybe experiencing a heavy influx of requests for early exits. In order for your PSC to manage this workload, please ensure you contact them at the earliest opportunity to discuss your requirements.
There are a range of other details of the scheme that are still being developed by Cabinet Office. Please note that neither we nor your PSC contacts are in possession of any more detail than has been provided here. We will let you know when further announcements have been made.

Contacts

Enquiries about content, distribution or to receive in a different format

employerhelpdesk@cabinet-office.x.gsi.gov.uk
01256 846414
Employer Helpdesk
My Civil Service Pension
Grosvenor House
Basing View
Basingstoke
RG21 4HG

Attachments