Looking for lawyer or an expert on civil service pension, classic scheme.

Mr16

I have a simple sounding problem with the salary of reference calculated by civil service pensions.  Anyone know a lawyer that is expert in this field?  

Background is I was on secondment from my employer, to an organisation with totally separate scheme, after 10 months back from secondment I reached 60 and retired.  What do the rules say about calculating my salary of reference - they only have 10 months of recent salary slips. The procedure they used gave me only 8.5% on top my 2017 salary, scandalous as inflation has been so high, and no increase until next April.  The pension providers Civil Service Pension, have not yet explained to me, so I am missing 2 months of pension already.

Marcon

Unlikely you'll find a lawyer 'expert in this field' interested in taking the case, but highly likely you'll find the expert, impartial help you need (free!) from https://www.moneyhelper.org.uk/en

Have you made a formal complaint under the scheme's Internal Dispute Resolution Procedure?

Edit - after seeing the fantastically helpful responses, I have to add 'or wait for @hugheskevi to come online....' !

hugheskevi

Mr16 said:

I have a simple sounding problem with the salary of reference calculated by civil service pensions.  Anyone know a lawyer that is expert in this field?  

Background is I was on secondment from my employer, to an organisation with totally separate scheme, after 10 months back from secondment I reached 60 and retired.  What do the rules say about calculating my salary of reference - they only have 10 months of recent salary slips. The procedure they used gave me only 8.5% on top my 2017 salary, scandalous as inflation has been so high, and no increase until next April.  The pension providers Civil Service Pension, have not yet explained to me, so I am missing 2 months of pension already.

It will be very important to have clear information about exactly what your Civil Service Pension arrangements were both when you went on secondment, and when you returned. You should have received letters from your Civil Service employer about this when you left, and possibly from MyCSP when you rejoined (assuming you returned and rejoined the Civil Service pension scheme), depending on what the arrangements were. It may also be significant whether you returned before 6 April 2022 due to the 2015 Remedy.

Generally, the final salary is calculated by looking at the last 12 months of pensionable earnings. Then you step back 91 days and look at the previous 12 months of pensionable earnings. You keep doing this until you have 9 separate values, which cover a period of 3 years. You then select whichever period contained the highest cash value within each of the 9 different 12-month periods. If any periods are exactly the same cash amount (ie a pensionable earnings freeze), you select the most recent period. If the highest cash value is from a past period, this is then revalued to the date of leaving. Details are at this link.

Speculating given the absence of all of the above information, I'd expect your period of secondment to be omitted in the calculation of final salary, so unless your pensionable earnings have reduced, the final salary would be based on the most recent 10 months of your salary plus the last two months prior to your secondment (in cash terms, not revalued). Does this appear to be the case based on the figures supplied?

What figure do you think should have been used, and what is the relevance of 2017 salary?

Mr16

Dear hugheskievi.  Thank you for your answer.  I had not expected anyone to attempt to answer.  In case you have more time. 
I just added everything up and you are correct.  I think they took 10 months for this year, and 2 months from 2017.  I have 3 questions I still hope to get to the bottom of.
1.  Do you know the rule they used?  I note you say 'you would expect....'  And I can understand the principle.  But if by any chance the rule says they 'must' use scheme years, maybe they should have looked for the last full year, i.e. 2017.  Then if they add inflation, my SOR is much much higher.  The reason is my current salary is only 8.5% higher than it was in 2017.  Inflation is much higher than that.  I know this sounds greedy, but it is a big difference, and I want to check that the regulations do allow CSP to add 10 recent months, and 2 very old months.
2.  Should they add inflation to the 2 very old months of salary, from 2017.
3.  Can they ignore the pay rise that is being finalised for this year.  2 of the payslips they used will probably get a 6% backdated pay rise.

I know this seems like I am 'clutching at straws' but I was screwed by the system which gave me minimal payrise when I returned from secondment.  Only 8% since 2017.  

Thanks again.  

hugheskevi

Mr16 said:

1.  Do you know the rule they used?  I note you say 'you would expect....'  And I can understand the principle.  But if by any chance the rule says they 'must' use scheme years, maybe they should have looked for the last full year, i.e. 2017.  Then if they add inflation, my SOR is much much higher.  The reason is my current salary is only 8.5% higher than it was in 2017.  Inflation is much higher than that.  I know this sounds greedy, but it is a big difference, and I want to check that the regulations do allow CSP to add 10 recent months, and 2 very old months.

Rule 1.7 of the classic scheme rules.

I said 'would expect' as the position would be different if a deferred award had been created as a result of the secondment, but that does not appear to be the case.

Classic does not use full scheme years for the definition of final pensionable earnings. The subsequent Premium pension scheme does use full scheme years and gives much better protection against salary not increasing by inflation than the classic scheme - looking back as far as 13 years.

This is the nature of a final salary scheme - it increases in line with your earnings, not inflation. The new career average schemes increase in line with inflation. Unfortunately many people close to retirement may have been financially better off to have switched to the Partnership pension scheme prior to the recent high inflation and low pay awards, but most do not monitor their pension and the rules to realise that.

2.  Should they add inflation to the 2 very old months of salary, from 2017. 

No, the only provision for inflation adjustment is after the calculation of all 9 past periods and when the highest figure from those periods is from a past period. There is no adjustment to the figures used for to calculate the periods. It seems that the most recent 12 months of earnings are the highest period so there is no adjustment.

Again, this is different to the Premium pension scheme which looks at scheme years and applies inflation prior to considering which is the highest period to use.

3.  Can they ignore the pay rise that is being finalised for this year.  2 of the payslips they used will probably get a 6% backdated pay rise.

I know this seems like I am 'clutching at straws' but I was screwed by the system which gave me minimal payrise when I returned from secondment.  Only 8% since 2017.  

Any backdated pay increase will count, and the pensionable earnings and pension award will be recalculated.

It won't be any comfort, but lots of classic members have had their pension significantly reduced in real terms in the last year or two. Just the way the rules of a system that never envisaged salaries falling significantly in real terms works unfortuantely. Most members of the Premium scheme will probably have no idea of the scheme rules, yet they are (largely) protected from salaries falling behind inflation unlike classic members.

Mr16

That is incredibly helpful.  Thank you very much for this.  It would have been easier not to have asked questions, but I would have wondered for the rest of my life.  CSP are too busy, I guess like a lot of people.  Cheers.