Pensions - for those about to be made redundant by the civil service

anoneemouse

This is a question that applies to all employees made redundant by any employer in fact - as it is a legal query applicable to all employers with a pension scheme.

Does anyone know the legal position on frozen pensions for staff made redundant. There are two specific queries:

1. Does the employer have to give the same cost-of-living rise each year on pension saved to date as they would for that same employee if they had continued working for the employer?

2. If the age at which people retire from the Scheme is raised (eg from 60 to 65) does the retirement age of the leaver stay the same as it was when they left (even if it would have risen if they had stayed - as after all its not possible for someone to work on in the job to deal with a later retirement age if they have already left that job).?

anoneemouse

Anyone?????

mjm3346

Don't know about the legal position but
1. They currently pay cost of living on preserved pensions
2. When the retirement age has changed in the past that has not changed the age a pension can be taken for service already earned even if you are still employed at the time.

tommytynan123

Hi Civil Servant from another Civil Servant. I will be posting a new thread tonight / tomorrow concerning my redundancy. My case is different because the redundancy process started 18 (eighteen) months ago. My garden looks nice though.

Advice from me: Channel all your queries straight to your TU rep. This area can be a minefield and whilst I appreciate that many members on this site have a good knowledge this scenario could affect you for the rest of your life. If you are not in a TU - join now !! My TU rep is probably working 25 hours a day (he sits on the National Exec as well) but he always replies within 24 hours and he is fantastic.

anoneemouse

mjm3346 wrote: »

Don't know about the legal position but
1. They currently pay cost of living on preserved pensions
2. When the retirement age has changed in the past that has not changed the age a pension can be taken for service already earned even if you are still employed at the time.

Thank you.

So - its been standard practice then for the Civil Service to accept that they have to uprate pensions annually for those who've left as well as the stayers. I am pretty sure that the law compels employers to do this (a previous firm of mine left my pension at EXACTLY the same amount for years - but then started putting the cost-of-living rise on it each year when some law or other came in a few years back. So I imagine any employer HAS to do this - whether they like it or no.)

The second point is the one where I could really do with a legal ruling on this - eg to have some law and/or case history that shows that a leavers retirement age stays exactly the same (whatever happens to the Scheme's retirement age).

I think it is the case that any leaver from ANY employer (at least one who is 55 or older) would keep their "own" retirement age even if the Schemes' retirement age subsequently changed. Thus - a former Civil Servant would be able to still receive their Civil Service pension at 60th birthday. But I would like the reassurance of knowing that the law compels employers to do this - even if they dont want to.

(It may be that someone is near enough to 60 that they could manage to live on the redundancy payoff till 60 - rather than having to claim benefit/look for another job. That person would need to know that the C.S. pension would DEFINITELY start at 60th birthday - as otherwise they might be in the invidious position of finding that payoff had to last till 65 instead and it obviously wouldnt be enough to do that).

Andy_L

It is a legal requiremnt that final salary pensions for leavers (defered members) receive indexation. Following the last budget the amount for CS pension is vague but I belieive it to be RPI indexation uptil next year then CPI indexation from then on (though possibly it may be CPI indexation from the date of leaving - the whole matter is subject to legal action atm).

mjm3346

anoneemouse wrote: »

Thank you.
The second point is the one where I could really do with a legal ruling on this - eg to have some law and/or case history that shows that a leavers retirement age stays exactly the same (whatever happens to the Scheme's retirement age).

I think it is the case that any leaver from ANY employer (at least one who is 55 or older) would keep their "own" retirement age even if the Schemes' retirement age subsequently changed. Thus - a former Civil Servant would be able to still receive their Civil Service pension at 60th birthday. But I would like the reassurance of knowing that the law compels employers to do this - even if they dont want to.

When the retirement age has been changed it has not been retrospective, even staff still employed keep the original retirement age for the pension "earned" up to the date of the change, but would not be able to draw any pension "earned" after then until the new retirement age.

The Govt have said they do not intend to make retrospective changes, should they wish to do so then providing it is properly approved, probably through parliament, then they can (state pension age was changed and will change with no right to access the pension "earned" so far at the original age.)

Liquorice_Twirls

I can't speak for the Civil Service pension scheme but I am in the Local Govt Pension scheme and there were new regulations starting 2008. What they did was to say everything accrued up to that point remained the same ie those that were allowed to get their pension at 60 still could, but the service accrued after 2008 rule change was subject to new conditions.

So for example I can take my pension that was accrued up to April 2008 at age 60. But the service I accrue after this is only available at age 65. Unfortunately you have to make a choice and take both bits together, so if I decide to take it at 60 I will have the second bit (post 2008) actuarially reduced which I understand as a woman will reduce this part by a third (yes 30% it's massive!). The original part is not reduced.

The pension that is deferred if you leave will be uprated but I think that is only by CPI (consumer price index) so may or may not be the same as the pay award for those still working.

All I can say is that the likelihood is that times ahead will be leaner but I don't think they can take away what you've accrued.

anoneemouse

Thank you. That is very clear.

I have a further query I cant put on MSE because it includes identifying details for me - so I've sent you a PM about that.