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Member Consultation: Reform of the Civil Service Compensation Scheme

Friday, February 26, 2016

Members will have seen or should see:

 

https://www.gov.uk/government/consultations/consultation-on-reform-of-the-civil-service-compensation-scheme

 

The key point is paragraph 3.7 Costs – it states:

 

The Government …… is therefore intending to reform the scheme so that the costs would be at least a third lower if the reformed

scheme terms were to be applied to the same population as left in 2014-2015.

 

Then the following for the high level “how” proposals:

 

5.2

The Government’s wider consultation on public sector reforms set out that it intended to take action on some, or all, of the following elements of public sector compensation provision:

 

  • Setting a maximum tariff of three weeks’ pay per year of service.

 

  • Capping the maximum number of months’ salary for voluntary redundancy

payments to 15 months. With the potential for setting a slightly higher limit for

voluntary exit payments, and slightly lower limit for compulsory redundancies.

 

  • Setting a maximum salary on which an exit payment can be based, potentially at £80,000

 

  • Requiring employer funded early access to pension to be limited or ended, through measures such as:

 

* capping the amount of employer funded pension ‘top ups’ to no more than

the amount of redundancy lump sum to which an individual would be entitled;

*remove employer top ups altogether;

*and/or increase the minimum age at which an employee is able to receive

an employer funded pension top up, to be more closely with the individual’s

Normal Pension Age.

 

5.3

MCO believes that a package of reforms can be developed which aligns the

principles set out above of encouraging exits earlier in the process with the Government’s wider consultation. The preferred way of achieving a similar

level of reforms which should better meet the Civil Service priorities is as follows:

 

  • set the standard tariff to three weeks’ per year of service;

 

  • set the Voluntary Exit cap at 18 months’ salary; set the Voluntary Redundancy cap to 12 months; and set the Compulsory Redundancy cap to 9 months

.

  • only allow employer funded top up for early access to pension where the member has reached the minimum pension age for a new entrant to the

scheme (i.e.55 at a minimum);

 

  • to introduce an absolute cap on CSCS payments at £95,000 in line with proposed legislation; and

 

  • set notice periods for all exits from the Civil Service under the CSCS at 3 months (notice periods are not set under the CSCS but clearly have an impact on total costs).

 

5.4

These two packages would save just over a third on the current costs of exits and this level of reform is within the range of the MCO’s target for cost savings in the CSCS

 

The RCTU will now undertake a direct consultation with members over how to respond to the proposals. We urge you to read the document in full. Please frame your comments around the “response document” questions but you are also invited to make any other pertinent comments you feel are appropriate.

 

From your responses – the RCTU will respond to the consultation.

 

Please send all replies to Contact Us – Subject headed: CSCS.

 

All replies to the RCTU MUST be received by the 15th of April 2016.

 

This is an extremely vital and important subject for all members in RCTU and you are encouraged to take the time to read the proposals and respond. The proposals here, if enacted, will have major consequences on your future.

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