Civil Service Compensation Scheme update

The FDA, together with the other civil service unions, met with the Minister for the Cabinet Office, Tessa Jowell, on 22 September. The meeting was held following a request from the unions and we expressed our objection at the nature of the proposals and the way they are being imposed.

The Minister agreed to consider our concerns and confirmed that any proposals would not be laid before Parliament before December and that the results from the consultation exercise would be considered carefully.

The consultation exercise concludes on 5 October 2009 and we would urge all members to take part. The FDA has not issued a 'template' response as the Government's practice tends to be to regard responses sent back which appear to have been drawn from a 'template' as a single reply. However, members may wish to draw from the FDA's view below, much of which was first circulated in July.

The FDA's view of the proposals

The proposed new compulsory terms are based entirely on a cash redundancy payment up to a maximum of two years' pay depending on length of service. The current compulsory severance and early retirement terms will disappear after 31 March 2011. After this date, access to an early non-reduced pension will cease for those who are made compulsorily redundant.

The proposed voluntary terms are very similar, but with employers having discretion about what payment they offer to volunteers up to the maximum of two years' pay. Employers will also have discretion to offer volunteers who are within five years of pension age the option of a non-reduced pension.

The proposals:

• Do not adequately protect individuals who may be faced with compulsory redundancy and in particular, fail to give sufficient recognition to any reserved rights;
  
  
• Far from being "broadly comparable to those offered elsewhere in the public sector" as the Cabinet Office maintains the proposed new terms will be the worst in the public sector. Members of the local government, NHS and teachers' pension schemes over 55 all have immediate access to their full pension - i.e. not actuarially reduced for early payment (as is the case in the civil service scheme) as well as severance payments up to 2 years' pay;
  
  
• Will result in the loss of the immediate payment of the full pension and lump sum is a major detriment;
  
  
• Will mean that civil servants who are made redundant will only have access to an actuarially reduced pension, which they can only make up to its unreduced level (or close to that) by suffering a reduction from their severance lump sum;
  
  
• Severely restrict the availability of any access to Approved Early Retirement (AER) which provides immediate access to an unreduced pension and lump sum , with no enhancement to service, to those aged over 55 and at the employer's discretion with the approval of the Cabinet Office; and
  
  
• Introduce a ceiling of two years' pay which is a reduction from three years, the current maximum for those departing on Compulsory Early Severance terms.
  

We believe that arrangements could have been agreed that would have reduced the cost of the compensation scheme to the taxpayer without the need for such draconian cuts to the terms on offer. The FDA, together with the other civil service unions, spent months of dialogue on this issue which was then dismissed by the Cabinet Office.

Details of the proposed new scheme can be found on the Civil Service Pensions website. Members can submit their comments by emailing pensionspr@cabinet-office.x.gsi.gov.uk or by post to:

CSCS consultation
Cabinet Office
8^th floor, Grosvenor House
Basing View
Basingstoke
Hampshire
RG21 4HG

All comments should be submitted by 5 October 2009.

Please copy your comments to our own dedicated email address at cscsfeedback@fda.org.uk