Adviser > Technical Central > Pre simplification > Occupational > Civil Service Pensions - Classic Plus Scheme
Civil Service Pensions - Classic Plus Scheme
The content of this page is based on our understanding of how pensions worked before A-Day, the 6 April 2006, and is provided for reference only.
Historically civil servants had access to the Principal Civil Service Pension Scheme (PCSPS). From 1 October 2002 four pension schemes were made available: namely Classic, Classic Plus, Premium and Partnership. The four schemes offer different types of benefits.
Civil Service Pensions - Classic Scheme - This scheme is final salary and is closed to new entrants. Civil servants who were members of the PCSPS prior to 1 October 2002 who decided not to join any of the other civil service pension schemes are automatically members of this scheme.
Classic Plus - A final salary scheme closed to new entrants. Members are employees who were members of the PCSPS on 30 September 2002 who decided to join this scheme. It is a combination of Classic benefits for service up to 30 September 2002 and the equivalent of Premium benefits from 1 October 2002.
Civil Service Pensions - Premium Scheme - Final salary scheme open to employees who were members of the PCSPS on 30 September 2002 and chose to join this scheme with effect from 1 October 2002. This scheme is open to new entrants.
Civil Service Pensions - Partnership Pension Account. - A stakeholder pension scheme open to all employees who are not members of one of the other schemes.
This overview outlines the features of the Classic Plus scheme. Overviews of the other schemes are available by clicking on their names above.
All the Civil Service Schemes are being reviewed by the Government. They plan to move from a final-salary scheme to a whole career scheme and also want to alter the pension age from 60 to 65. The consultation ended on 4 March 2005, however no decision has yet been reached.
Administrator & website address
To find out who the administrator is, look up the Helpline on the Civil Service Pensions Website
Look up the organisation the member works for e.g. Home Office. An alphabetical list is provided on the Helpline page of the website
Contracted-out
Yes
Contribution basis
AVC scheme available - Yes
Member contribution - 3.5% p.a. of pensionable earnings
Employer contribution - The level advised by the scheme actuary to enable full benefits to be paid
Added years permitted? - Yes. Additional contributions are collected through monthly salary deduction, or AVCs can be paid
Salary definition
Pensionable earnings - Permanent items of pay are pensionable. This may include non-cash earnings, e.g. uniform allowance (Bonus may be pensionable at the discretion of the employer)
Final pensionable earnings - The higher of:
Pensionable/reckonable service - Generally from date of joining to exit date in years and days
Normal retirement benefits
Normal retirement age - 60, however if the member has reserved the right to a pension age lower than 60, they will lose the right to any other special terms and conditions which affect future service
Pension - 1/80th of final pensionable earnings for each year of reckonable service prior to 1 October 2002 and 1/60th of final pensionable earnings for each year of reckonable service from 1 October 2002
Retirement lump sum - A lump sum of 3/80ths of final pensionable earnings for each year of service prior to 1 October 2002, plus at least 2.25 times the pension based on service from 1 October 2002
Early retirement on the grounds of ill-health
If the member cannot work because of permanent ill-health and has 2 or more years service, an ill-health early retirement pension may be paid (subject to agreement from the company medical adviser and completion of a satisfactory health declaration)
No actuarial reduction is applied to the pension. If the member has very short service or is in severe ill-health then added years may be granted
Early retirement
Members can take early retirement from age 50, the typical early retirement factor is 5% for each year the pension is taken early
Different types of early retirement benefits are also provided under the Civil Service Compensation Scheme
They are:
Late retirement
If allowed by the employer
Commutation factors
12:1
Pension increases
In line with RPI - paid to pensioners age 55 or over
Death before retirement benefits
Lump sum - 3 times pensionable earnings
(Lump sum may be increased up to 4 times salary if AVCs are paid by the member)
Dependant's pension (death in service):
- 3/8ths of member’s pension for service from 1/10/02
- plus ½ of member’s pension for service prior to 1/10/02
If the member dies in service, extra years will be granted up to 10 years. These extra years will count as service from 1/10/02
Dependants' pensions (death after leaving service)
Lump sum - The frozen lump sum for the service prior to 1 October 2002 plus the lower of
- 5 times frozen pension based on service from 1 October 2002 and:
- twice the final pensionable earnings when the member left the scheme
Dependant's pension:
- 50% of member’s pension for service prior to 1/10/02
- plus 3/8ths of member’s pension for service from 1/10/02 i.e. before any cash commutation
- children’s pensions (if payable)
Widow's/widower's/partner's benefits - If the spouse gets married again or cohabits, the pension will either stop or be reduced
If the member is not married to anyone, a pension may be paid to the partner. This pension will only be based on service from 1/10/02
Death after retirement benefits
Lump sum - If member dies within 5 years of starting to receive their pension, a lump sum representing the balance of:
- 5 years pension based on service from 1/10/02 plus
- 2 years pension based on service before 1/10/02
Dependants' pensions -
- 50% of member’s pension for service prior to 1/10/02
- plus 3/8ths of member’s pension for service from 1/10/02 before any cash commutation
- children’s pension (if payable)
Early leaver options
Transfer value - A transfer value is available, even if the member has less than 2 years service
Preserved pension - If the member has 2 or more years service then they can elect to make their benefit paid up. This pension will become payable from age 60
Refund of contributions - If the member has less than 2 years service, then a refund of member’s contributions will normally be paid
Treatment of pension rights on divorce
Earmarking - The court can order the scheme to pay all or part of the pension and lump sum. The scheme will only make payments to the former spouse when a court order has specifically instructed them to do so. If the former spouse remarries, he or she will not receive payments in respect of the pension after date of remarriage, however this normally does not affect the lump sum which has been earmarked
Pension sharing on divorce - The accrued pension rights are reduced by a percentage confirmed by the court. The former spouse is given rights in the scheme equal in value to the amount of reduction – known as the pension credit rights. There is no option to transfer the pension credit rights out of the scheme
Any research and analysis included has been provided by us for our own purposes and the results of it are being made available only incidentally.
Updated 5 August 2005
For professional advisers only
