EPN463 - Civil Service Compensation Scheme - Response to Consultation

Date posted: 03/10/2016

Audience:

• Pension Leads & HR Managers
• Internal Communications Managers

Action:

• To be aware of the response to the Civil Service Compensation Scheme consultation

Timing:

• Immediate

Detail

Cabinet Office published a response to the consultation on reforms to the Civil Service Compensation Scheme launched in February and made a formal offer to unions on terms that will support employers in managing their workforce and simplify the exit process while treating our employees respectfully and fairly. You can find the response at www.gov.uk/government/consultations/consultation-on-reform-of-the-civil-service-compensation-scheme

The Government's offer is conditional on acceptance from a sufficient number of unions to constitute an agreement. Key features of the offer are:

• the standard tariff for calculating exit payments to be three weeks per year of service;
• Voluntary Exit capped at 18 months' salary; Voluntary Redundancy capped at 18 months; Compulsory Redundancy capped at 9 months;
• to maintain flexibility in Voluntary Exit terms to offer between statutory terms and the standard tariff;
• to allow employer-funded top-up to pension from age 55 and for this to track 10 years behind state pension age;
• to offer a partial buy-out option for employees above minimum pension age where the cash-value of the exit payment is insufficient to fully buy out the actuarial reduction;
• Compulsory Redundancy notice periods to be 3 months for new starters only;
• for the lower paid underpin to be increased to £24,500.

As part of the offer, the Government is also seeking agreement to:

• reform inefficiency compensation - aligning the tariff with Voluntary Redundancy terms, ensuring its use is only related to cases of underlying ill health and amending the management code and associated guidance; and
• a revised 2016 Protocol for Civil Service Redundancy Principles to enable a more efficient exit process.

It is important to note that this offer is conditional on acceptance from a sufficient number of unions to constitute an agreement. If this agreement cannot be secured the Government will implement an alternative package with less favourable terms.

The Government expects trade unions to consult their members on this offer and respond by 31 October and then expects to introduce the new scheme in early November.

Contacts

If you have a question about the distribution of EPNs contact employerpensionnotice@cabinetoffice.gov.uk.

You can find electronic copies of the Employer Pension Guide, all current EPNs and forms on our website.

This notice is for employers and should not be issued to scheme members.

If members have a question about their pension they can find information on this website or by contacting MyCSP.