Public and Commercial Services Union

View the government's proposals in full on the civil service website

Summary

The government's core proposals are to reduce entitlements to one month’s pay for each year of service, and two months pay for every year of service after five years, capped at two years pay.

There would be no additional or enhanced entitlement for over 50s in the future to early payment of pension and lump sum as there is at present. Departments, NDPBS and public bodies will be given flexibility to design their own voluntary redundancy terms but these must not exceed two years pay.

The only means of accessing an early payment of pension and lump sum would be to take it on an actuarially reduced basis or to use the cash sum generated by the voluntary or compulsory terms to seek to buy out the actuarial reduction.

In some cases the sum of money generated by redundancy will be insufficient to do this and, if so, only in limited circumstances will the employer top this up. The option to use the lump sum to access an unreduced pension on redundancy will be allowed for those aged at least 50 (and with 5 years’ service) at 31 March 2010.

Following representations by PCS to Ministers, in October 2009 an underpin for low paid staff of £45,000 or three years pay was added and in December the underpin was increased to £50,000. The latest plans are that the underpin will increase from £50,000 to £60,000

Individuals who currently have “pre `87 reserved rights” now will only have limited rights if departing on compulsory redundancy where the individual is aged under 50 on their last day of service. Payments would be made as follows:

• Compulsory redundancy 1 April 2011 – 31 March 2012 : 100%
• Compulsory redundancy 1 April 2012 – 31 March 2013 : 80%
• Compulsory redundancy 1 April 2013 – 31 March 2014 : 60%
• Compulsory redundancy 1 April 2014 – 31 March 2015 : 40%

It is only in a compulsory redundancy situation will there be protection of existing terms for existing staff until 31 March 2011.

Key points

The main impact on PCS members of the government latest proposals to cut the CSCS would be:

The under 50's

Approximately 50% of PCS members are between 30 and 50. Anyone earning over £20,000 would suffer a detriment. This detriment becomes greater the more you earn. Nearly 40% of full-time civil servants, earn between £20,000-£30,000 p.a.

Those earning over £30,000 would lose their existing entitlement to 3 years compensation, which would be replaced with a 2 year cap, a loss of tens of thousands of pounds in many instances. Those earning between £20,000 and £30,000 would have any compensation capped at £60,000 if they had enough service.

Staff over 50 with 5 year’s service

Nearly 30% of PCS membership is aged between 50 and 59. Members with 5 year’s service, who are over 50, under the present scheme have an entitlement to an enhanced pension and lump sum with up to 6 2/3 years added.

Under the employer's proposal the entitlement to enhanced pension will be abolished for staff who become 50 in the future. For those aged at least 50 (and with 5 years’ service) at 31 March 2010 there would be an option to use their lump sum to access an unreduced pension on redundancy.

Those currently between 50 and 60 will have some restricted protection but only in a compulsory redundancy situation.

Pre-1987

For the very specific group who have substantial reserved rights to CSCS benefits dating back to 1 April 1987, their current entitlements would be reduced by 60% over the period 2011-2014.

Nuvos

Members joining the PCSPS since 2007 are in the Nuvos pension scheme and are not currently in the CSCS. In the event of redundancy they would currently receive statutory terms.

Under the latest plan they would get a month’s pay for each year of service, doubled after 5 years, capped at two years pay or up to the cash cap if they remained amongst the lower paid. Those currently in NUVOS would be in the new scheme as will new entrants.

It must be remembered that those with shorter service are cheaper to make redundant. If the cuts go through everyone would be more vulnerable to redundancy.

Conclusion

Our objective is to seek a negotiated agreement that protects members’ existing entitlements under the CSCS and provides for acceptable protection for members in the Nuvos scheme.

While the employer has made concessions, the terms on offer would mean that a large proportion of the membership would still suffer serious detriment to their terms and conditions.

Moreover, accepting such divisive cuts in so many people’s entitlements would weaken the whole union and make job losses and compulsory redundancy much more likely at a time when we know that the major political parties are planning such cuts.

We have therefore rejected the proposals but continue to seek an acceptable agreement.