The Public Service (Civil Servants and Others) Pensions (Amendment) Regulations 2018

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Public Service (Civil Servants and Others) Pensions Regulations 2014 (the 2014 Regulations) (SI 2014/1964). The 2014 Regulations established a scheme for the payment of pensions and other benefits to civil servants and other eligible persons (“the Alpha scheme”). This is the third set of regulations to amend the provisions of the 2014 Regulations, and correct minor and technical issues that have been identified during the operation of the scheme and provide for the interaction of the Alpha scheme with the Partnership Pension scheme (a defined contributions scheme that is available as an alternative to the Alpha Scheme).

The Regulations come into force on 21st May 2018, but regulation 1 provides for provisions to take effect from 1st April 2015 or 1st April 2018. Section 3(3)(b) of the Public Service Pensions Act 2013 (“the Act”) provides authority for the regulations to take effect as from a date earlier than the making of these Regulations.

Regulations 3(a) and 4 provide for a new definition of “active member” to ensure that those on unpaid leave can continue to be treated as active members of the scheme rather that as deferred members.

Regulations 3(g), 4 and 5 provide for a new definition of “connected scheme”. The new definition firstly clarifies that injury and compensation schemes are not connected to the Alpha scheme, and secondly provides that a public body pension scheme which relates to members of staff of a body, or the holder of an office, listed in Schedule 10 to the Act are not connected to the Alpha scheme. The latter is to facilitate the closure of such schemes and the transfer of their members to the Alpha scheme.

Regulations 6, 7 and 8 relax the time limits imposed by the 2014 Regulations on switching between the Alpha scheme and the Partnership Pension scheme. The definition of “Partnership Pension Account” is also updated to reflect the changing governance structure of that scheme.

Regulation 9 clarifies that pay equivalent to the annual rate of an ill-health pension that is received in respect of a period of sick leave is not pensionable.

Regulations 10, 24, 25 and 27 amend various provisions in respect of child related leave following the introduction of shared parental leave. These amendments implement the new definitions introduced by regulation 3.

Regulation 11 provides for the calculation of the “retirement index adjustment” to be modified in respect of the scheme year starting in 2015. The retirement index adjustment is used to revalue pensions in the final year of scheme membership, and the modification provides that the revaluation in the scheme year starting in 2015 cannot be less than zero.

Regulations 12 and 13 correct a drafting error whereby references in two regulations were transposed.

Regulations 14, 21 and 22 clarify that where a member is receiving “assumed pay” certain calculations are made by reference to that assumed pay rather than their pensionable earnings.

Regulation 15 amends the definition of “qualifying service” to give the scheme manager discretion to deem service in another occupational pension scheme as qualifying service for the Alpha scheme.

Regulation 16 corrects an error whereby an upper tier top up earned pension was available to those who had taken partial retirement from the Principal Civil Service Pension Scheme (“PCSPS”) but not to those who had partially retired from the Alpha Scheme.

Regulations 17 and 18 introduce the ability for the scheme manager to allow a member to partially reduce an actuarial reduction that would otherwise apply to their benefits by making a special payment to the scheme.

Regulations 19 and 20 remove the requirement to nominate an unmarried partner in order for them to receive a pension as a surviving adult. This amendment is made following the decision of the Supreme Court in the case of Brewster [2017] UKSC 8.

Regulation 23 removes an unnecessary reference to service in the PCSPS from the calculation of death benefits for members who die out of service.

Regulation 26 updates references to the Pension Schemes Act 1993 following amendments to that Act.

Regulation 28 amends the circumstances where a member of an existing pension scheme will be given transitional protection when joining the Alpha scheme by removing the requirement that the individual be an active member on the date their existing scheme is closed. Regulation 28 also provides for certain transition members to receive an enhanced rate of upper tier top up earned pension if they were on a period of sick leave at nil or reduced pay in the first twelve months of their membership of the Alpha scheme before taking ill-health retirement. This amendment is required to remedy an issue whereby such members would not otherwise be entitled to the same level of enhancement owing to their reduced period of service in the Alpha scheme.

An impact assessment has not been produced for this instrument as no impact on the costs of business or the voluntary sector is foreseen.