The civil service pension scheme, the Principal Civil Service Pension Scheme (PCSPS) is to be revamp...
The civil service pension scheme, the Principal Civil Service Pension Scheme (PCSPS) is to be revamped this October with existing members given a choice of three schemes and new entrants choosing between two schemes.
Existing members will see the current PCSPS scheme renamed Classic which will remain the same, with pension based on 1/80th of final salary, contributions at 1.5% of pay and a tax free lump sum of three times the pension.
The renamed PCSPS scheme will be joined by two new schemes named Premium and Classic Plus for existing members. The Premium scheme sets employee contributions at 3.5% of pay and gives a pension based on 1/60th of final salary. Additionally some pension money can be exchanged for a tax free lump sum and the civil service will contribute £12 for every £1 of yearly pension given up.
Civil servants choosing this option will convert their existing service in the PCSPS scheme to the Premium scheme. Each year of PCSPS service will usually be worth 0.92 of a Premium year.
The Classic Plus option is a combined approach and counts service from 1 October as Premium service and service up to 30 September counting as PCSPS service.
Civil service employees who do not actively choose one of the options will remain in the renamed PCSPS scheme.
Entrants to a civil service pension scheme on or after 1 October will have the choice of the Premium scheme or a Partnership pension account. This is a personal pension based on the stakeholder model, with an employer contribution based on member age.
The civil service will also match member contributions for up to 3% of pay.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected