Government consulting on proposed changes to Civil Service Compensation Scheme

The government has confirmed that it will continue consulting with trade unions on plans to reform the Civil Service Compensation Scheme (CSCS) to raise early pension access to track 10 years behind the state pension age.

The discussions are expected to build on the previous consultation undertaken by the government in 2017, with the government acknowledging that it is "appropriate" to continue consulting with trade unions in view of the time since the proposals were initially shared.

Although early access to pensions was included to allow staff to retire and draw all of their civil service pension without reduction for early payment, the government suggested that this is “questionable” whether this is appropriate, given the significant costs for the employer, the limited eligibility and the government’s aim in encouraging longer working lives.

As a result, the proposals look to ensure any early access to pension provision remains appropriate, by changing the early access rules to track 10 years behind state pension age.

In the new supplementary consultation document, the government explained that the initial rationale behind the changes has not changed since the initial consultation, although it has been "heightened" in light of the current economic climate.

Indeed, the government suggested that it is "paramount" that public finances are on a sustainable path and the use of taxpayers' money adheres to the fiscal rules proposed by the government in 2021 in "current challenging context".

The supplementary consultation stated: "The government seeks any views that the unions now wish to communicate, whether they be a reiteration of previous points, different views or additional matters."

Under the plans, the government has proposed making adjustments to elements of the scheme within the overall structure whilst aligning to the broader principles of cross-government public sector exit reform.

The revised proposals were determined as a result of previous consultation discussions with trade unions between 2017-2019 and careful ministerial consideration of counter proposals, and were deemed to "strike a balance between achieving value for money for the taxpayer and fair compensation terms for exiting employees".

There are some key differences from the initial 2017 consultation, as the proposals now include an increase in the maximum payment for voluntary exit and voluntary redundancy of three months’ salary, an additional provision for partial buy-out of the actuarial reduction.

In addition to this, it also includes a higher underpin for lower paid staff leaving as a result of redundancy and linking the efficiency tariff to the more generous VR provision rather than a link to CR.

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