Civil Service Pension consultation launched

28 July 2011

The Government’s plans to reform public service pensions, to ensure they remain sustainable for the future, have progressed further today with the launch of a consultation on increasing employee contributions to the Principal Civil Service Pensions Scheme (PCSPS) for 2012/13.

This follows the announcement on the 19 July by the Chief Secretary to the Treasury that the Government would start formal consultations on increasing public service pension contributions for the next financial year.

This is the first step on a longer journey of public service pension reform, following the recommendations of Lord Hutton’s Independent Public Service Pensions Commission.

Minister for the Cabinet Office, Francis Maude said:

“We have committed to public servants continuing to have pension arrangements that are among the very best available in the work place. I want to stress to all civil servants that our proposals for pension reform will ensure that the pension individuals receive at normal pension age would be broadly as generous for low and middle income earners as it is now and the pension you have already earned will be protected.

“I am today launching a consultation on proposals to increase pension contributions for 2012-13 and as part of this process we will be engaging with the civil service trade unions to discuss these proposals.”

The key proposals in the consultation published today are:

• Additional contributions are to take effect from April 2012.
• The proposed contribution increases would be on a tiered basis, meaning that three-quarters of Civil Service scheme members will see either no change at all or a contribution increase from April 2012 of less than 1.3% of pay (the average amount).
• Our preferred approach would mean that those earning under £15,000 (full-time rate) will see no increase in contributions.
• And that those earning up to £21,000 (full-time rate) will not see contributions increase by more than 0.6 percentage points in 2012-13.
• The proposals mean that no civil servant should see contributions increase by more than 2.4 percentage points in 2012-13.

Principal Civil Service Pension Scheme: Consultation on proposed increase to employee contribution rates effective from 2012 will close on 30 September.