This overview sets out the background to the new scheme and the main features of Alpha starting from 1st April 2015. This new scheme has resulted from a process of negotiation between the Cabinet Office and the FDA and other civil service unions over reform to the PCSPS.
Underlined terms used throughout this and other Pensions 2015 documents are explained in the Glossary.
THE PROPOSED CHANGES APPLY FROM APRIL 2015
All pensions in payment or built up before April 2015 will be fully protected. If you are currently in receipt of a pension or leave the civil service with a deferred pension before April 2015 these changes do not affect you.
If you are currently a contributing scheme member your Classic/Classic Plus/Premium pension will still be based on final salary at retirement, and current Normal Pension Age of 60.
If you are currently a contributing scheme member of Nuvos, your pension will still be payable at your current Normal Pension Age of 65.
PENSION REFORM FINAL AGREEMENT
In March 2012 the following Agreement was reached between the government, Cabinet Office and the FDA, Prospect and GMB. The agreement incorporates three annexes with further information that are available here: http://www.civilservice.gov.uk/wp-content/uploads/2012/03/ProposedFinalAgreement.pdf
NEW SCHEME BENEFITS
The table below shows the main provisions of the new scheme, alpha, for membership from 1st April 2015. Terms used in the table below are explained in the glossary where appropriate.
Unless explicitly stated, all other scheme benefits remain the same as in the current scheme - nuvos.
Some of the features - CARE and the link to State Pension Age - were set down by the government in November 2011 and are features of all 'new' public sector pension schemes. The government also replaced the Retail Price Index (RPI) with Consumer Price Index (CPI) indexation before negotiations began.
ALPHA IS A DEFINED BENEFIT SCHEME
Alpha is a CARE scheme (Career Average Revalued Earnings) like nuvos. As with Nuvos, Classic and Premium, Alpha is a defined benefit scheme.
CONTRIBUTIONS BASED ON ACTUAL PAY FOR PART-TIME STAFF
As part of our negotiations following the agreement reached in 2012. From 2015, all members of the PCSPS will have contribution rates based on actual - not full time equivalent - pay which is not the case in the current schemes. This will mean that some part-time workers will pay lower contributions than would otherwise have been the case.
NEW SCHEME CONTRIBUTIONS
The average member contribution to the PCSPS will remain at 5.6% as is the case across schemes for 2014-5.
The contribution bandings have been changed from the current ones in classic, premium and nuvos. A key priority in FDA's negotiations was to ensure that contribution rates are as flat as possible. The new structure has been designed to take tax relief into account, to be more progressive and is the flattest of the main public service schemes. That means that most contribution bandings after tax relief are approximately the same at around 4.4%, with a lower contribution rate for the lowest paid. This remains the lowest average employee contribution rate in the public sector.
CONTRIBUTION BANDS AND RATES FROM APRIL 2015
*Please note that the net contribution rates stated are approximate and will depend on individual members' circumstances.
PROTECTION OF CURRENT BENEFITS
Alpha will start on 1st April 2015. Only pensionable service after that point will be in the new scheme, under alpha rules.
Pensioner and deferred members will not see any change to their benefits.
Members with service in the current schemes will retain the link to final salary (for Classic, Classic Plus and Premium members) for all service before 1st April 2015 and the Normal Pension Age as under the current rules for all schemes (i.e. 60 for the final salary schemes and 65 for Nuvos). Your final salary pension from Classic and Premium will be calculated at the point you retire and will be added to your pension from Alpha.
PENSION PROTECTION ON TRANSFER
The provisions of the PCSPS have been extended to ensure that all staff whose employment is compulsorily transferred and who would not previously have been able to remain in the PCSPS or join another public service pension scheme will still be able to retain membership of the PCSPS when transferred.
Back to Pensions 2015 Home