EPN710 - Resource Accounts: 2023/24 disclosure of salary, pension and compensation information

Audience

• This notice is for staff involved in the preparation of Remuneration Reports required for the Annual Resource Accounts exercise. It will be of particular interest to:
• Finance directors and managers; and
• Pension leads

Important Information

Given the complexities surrounding the calculations of pension benefits for the Annual Resource Accounts caused by the 2015 Remedy (McCloud judgment) this year, there has been an exceptional delay in issuing the Pension Disclosure figures for departments.

We have been working with HM Treasury (HMT) and the National Audit Office (NAO) to determine a way forward and it has been decided that departments will be split into two categories.

Departments who will have their 2023/24 Pension Disclosure figures supplied by 21 June 2024.

MyCSP have been working through as many of the received requests as possible and will provide the Pension Disclosure figures to departments in this category by 21 June 2024. These departments will be directly notified via the individual who provided MyCSP with their Annex 13A. These departments will be able to include Pension Disclosure figures if they plan to publish their Resource Accounts as normal.

Departments who will have their 2023/24 Pension Disclosure figures supplied after the start of the Summer Recess.

The remaining departments will have their 2023/24 Pension Disclosure figures supplied by 31 August 2024. Departments who fall into this category will be directly notified via the individual who provided MyCSP with their Annex 13A. It has been agreed by HMT that departments in this group who plan to publish their Resource Accounts before the Summer Recess should therefore not include 2023/24 pensions information.

The following agreed wording should be disclosed instead:

“Accrued pension benefits for directors are not included in this table for 2023/24 due to an exceptional delay in the calculation of these figures following the application of the public service pensions remedy¹.”

¹ www.gov.uk/government/collections/how-the-public-service-pension-remedy-affects-your-pension

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Actions

• Note the example Remuneration Report in Annex 13C of the EPG
• Send the notice in Annex 13D of the EPG to all staff covered by the Remuneration Report
• Note the additional guidance in Annex 13E that explains why the difference between the ‘start’ and ‘end’ of Cash Equivalent Transfer Values are in some cases considerably higher than the real increases in the CETV

Timing 

• Immediate - you must carry out the actions above as soon as possible 

Detail

1. The Resource Accounts of organisations covered by the Civil Service pension arrangements must include a Remuneration Report of information about the salary and pension packages of Ministers and their senior management team.
2. Section 13 of the Employer Pension Guide (EPG) contains detailed guidance about what should be included in your Remuneration Report. Please refer to this guidance if you have any questions about the disclosure of salary, bonus, pension and compensation information in your report.

Example Remuneration Report (Annex 13C)

3. Annex 13 Contains an example Remuneration Report that shows how pay, pension and compensation information is presented. If you plan to publish your Resource Accounts before Pension Disclosure figures have been supplied to you (in line with the general approval provided by HMT, as described above), you should:

• Include 2022/23 figures (obtained from last year’s Resource Accounts)
• Include the wording agreed by HMT beneath the single total figure of remuneration table and the separate table showing pensions information relating to officials
• Amend the tables accordingly to reflect the absence of 2023/24 pensions information, and omit other wording in text about how benefits for members in scope of the public service pensions remedy have been calculated.

Note to senior staff (Annex 13D)

4. Please issue the note contained in Annex 13D of Section 13 of the EPG to all staff who will be included in the Remuneration Report to provide advance warning of the exercise. Once you have obtained all the necessary figures, you should provide the staff in question with details of what you propose to publish and invite them to correct any factual errors.

Figures that will be used by the Scheme Administrator this year

5. When calculating the real increase in CETV and the pension benefits accrued during the year 2023/24 for the single total figure of remuneration, the Scheme Administrator will take account of inflation.
6. The CPI increase for September 2023 was 6.7%. Consequently, the Pensions Increase (PI) factor for April 2024 was 6.7%. The in-service revaluation factor for alpha was also 6.7%
7. The earnings that count towards the calculation of pensions is limited for some staff to a figure referred to as the “earnings cap” or “permitted maximum”. Where this is relevant, the Scheme Administrator will calculate pensions based on the 2023/24 earnings cap of £205,200.
8. Negative results can occur where a member is over their Normal Pension Age (NPA). The factors used to calculate the CETV are such that the value of pension that could have been taken at NPA decreases as the member gets older.
9. When the Scheme Administrator supplies you with the requested pension information, they will explain the reasons for any real decrease in CETV or pension element of the single figure of remuneration. They will also provide you with the combined information you need for your reports with the relevant rounding applied.
10. For members who are in scope of 2015 Remedy, the calculation of their benefits (and associated CETVs) as at 31 March 2023 and 31 March 2024 will reflect the fact that service between 1 April 2015 and 31 March 2022 was rolled back into the PCSPS on 1 October 2023. Although members will in due course get an option to decide whether that service should count towards PCSPS or Alpha benefits, for the purpose of remuneration reports the figures will be based on the rolled back position i.e. PCSPS benefits for that period. The same applies to the calculation of the single total figure of remuneration.
11. In addition there has been a factor change during the reporting period. For consistency, the CETVs as at 31 March 2023 and 31 March 2024 for all members covered by reports (not just those in scope of Remedy) will be calculated using the new factors.

Further support available to you

12. More information including FAQs and calculation examples can be found on the Resource Accounts Exercise page.

Contacts

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.