Update for scheme members on latest position on reforms to the Research Councils pensions. Covers both the increases to contributions that will begin to take effect from April 2012 and the proposed new pension scheme to be introduced in 2015. Answer questions such as: ◦ Why are pensions changing? ◦ Will I be forced to work longer? ◦ How much more will I have to pay? ◦ Will my pension be lower under the new scheme? ◦ What about the money I have already paid in and the benefits I've obtained?
Why Why is the R the Research C Coun uncils pens nsion sche scheme cha changing? g? 1. 1. The c cur urrent s sche chemes 2. 2. Wha What i is cha changing? g? Stag tages 1 1 and nd 2 2 3. 3. a. Reform at a glance - chronologically b. How and will the changes apply to you? c. Stage 1 – Member contribution increases in more detail d. Stage 2 – New pension scheme in more detail e. Reform at a glance – reminder On On-go going g bene enefi fits ts o of f a Research C h Counci ncils pension 4. 4. Fi Find o out ut more – he help and and reso esources 5. 5.
• Changes based on an independent report published in March 2011. • Key points included: 1. People are living longer compared with a few years ago: Extra years in retirement mean pensions cost more. 2. Pensions need to be sustainable: The costs of public service pensions must be affordable in the long term. Recent reforms have not achieved this.
classi ssic classi ssic plu plus If yo you u joine ned be d before O Octobe ber 2 2002 yo you u ar are You u may may have have opt pted t d to mo move ve i int nto t thi his • • most st likely t to be e in this sc s schem eme u unles ess y you sche heme whe when t n the he clas assic s sche heme closed t to opt pted t d to join n pr premi mium o um or clas assic pl plus us new e ne ent ntrant ants Features es: Features es: Fin inal s sala lary ry Fin inal s sala lary ry – hybr hybrid d of clas assic and and pr premi mium um • • th and 1 Pens nsion bas n based o d on n 1/80 th th Pens nsion bas n based o d on n 1/80 th and 1/60 th th • • Lump ump sum um Lump ump sum um • • Con ontr tributi tion on – 1. 1.5% 5% Con ontr tributi tion on - 3. 3.5% 5% • • premi emium nuvo nuvos If yo you u joine ned be d between O Octobe ber 2002 and and If yo you u joine ned af d after J Jul uly y 2007 yo you u ar are mo most • • July ly 2007 2007 you are re most lik likely to be in in this is likely to be in lik in this is sch cheme schem eme Features es: Features es: Ca Care reer a r avera rage s sch cheme • Fin inal s sala lary ry • Con ontr tributi tion on – 3. 3.5% 5% • Pens nsion bas n based o d on n 1/60 th th • Opt ption n for lump ump sum um • Opt ption n for lump ump sum um • Con ontr tributi tion on – 3. 3.5% 5% •
Stag age 1 1: From om April ril 2012: Schem eme e member er contr trib ibutio ion increa reases ses to curren rrent t schem emes: s: • From om 1 April ril 2012. Furth rther er increa reases ses are planned from rom April il 2013 and April il 2014 2014 • You ou will ll stay in you our curren rrent scheme e durin ring g this is perio iod Stag age 2 2: Fro rom Ap April 2015: New ew sc schem heme wit ith new new ru rules: s: • Two o main in differ feren ences es to curr rren ent t schemes es (featu tured ed later er in this is pres esen entatio tion): 1. 1. New age for r claim imin ing g you our full ll pensio sion benef efits its 2. 2. New way of calcula lati ting g you our r pensi sion benefit efits
April 2012 April 2013 April 2014 April 2015 New ew sc schem eme Firs irst Th Third ird Seco cond comme mmenc nces increa ease se increa ease se increa ease se Curre Cu rrent s Membe sch cheme ber c r cont ntribu ributio ion i incre reases New w Sche Scheme Stage 1 1: : fro rom m Apri ril 2 2012 Stage 2 2: : fro rom m Apri ril 2 2015 Member c r contrib ibutio ion New ew pen ension s scheme eme f for r increa in eases t to your r curren rrent mo most wit ith n new ew ru rules les scheme
You ou w wou ould ld 1. C Contrib ribution tion rema re main in in in you our r incr creas eases es curren cu ent s sch chem eme e an and p pay ay 2. Y . You u coul uld contribu tribution tion move to th mov to the new incr creas eases es on only ly sch chem eme at e at a a lat ater er Yes es date te b beyond A d Apri pril l Are yo e you 2015 2015 Yes es les ess t than an 10 year 10 years from y m you our r Are yo e you 10 10 yea years 1. C Contrib ribution tion sch chem eme e or ov or over bu r but t le less incr creas eases es pens nsion n tha han n age? ag e? 13. 13.5 5 year years f from 2. Y . You u wo woul uld yo your s sch chem eme e move to th mov to the new pen ension ag age? e? No No sch chem eme f e from No No April 2 pril 2015 NB: nuvos scheme pension age = 65 years. classic, classic plus and premium scheme pension age generally = 60 years. To find out how these changes would apply to you, use the: • 2012 contributions calculator: www.civilservice.gov.uk/pension/reform/contribution-increases • 2015 new scheme calculator: www.civilservice.gov.uk/pensions/reform/key-elements
Stage 1: 1: fro rom April ril 201 2012 Contr tributi ution i increa eases es Member contributions will increase by an average of 3.2% of pay over the next three years, starting from 1 April 2012. The increase from 1 April 2012 will be an average 1.3% of pay. The exact increase will be dependant on your salary (details in later slides). Further increases will take effect from April 2013 and April 2014. The structure of these increases will be subject to further discussions with trade unions. You will remain in your current scheme whilst these increases are taking place. Those earning £15,000 or less will see no increases in contributions from 1 April 2012.
Stage 1: 1: fro rom April ril 201 2012 Contr tributi ution i increa eases es 40% o of 40% o of 20% o of Average of 3.2% of total to total to total to + + = salary by year three incr crease incr crease incr crease
Stage 1: 1: fro rom April ril 201 2012 Contr tributi ution i increa eases es Cla Classic Annual nnual pe pens nsiona nable ear arni ning ngs Clas assic pl plus us, pr premi mium um, nuvo nuvos (full-time e (f equivalent b basi asis) Curre Cu rrent ( (%) April ril 2012 2012 (%) Cu Curre rrent ( (%) April ril 2012 2012 (%) Up t to £15, £15,000 000 1. 1.5 1. 1.5 3. 3.5 3. 3.5 £15,001 £15, 001 - £21, £21,000 000 1.5 1. 2. 2.1 3.5 3. 4.1 4. £21,001 £21, 001 - £30, £30,000 000 1. 1.5 2.7 2. 3.5 3. 4. 4.7 £30, £30,001 001 - £50, £50,000 000 1.5 1. 3.1 3. 3.5 3. 5.1 5. £50,001 £50, 001 - £60, £60,000 000 1.5 1. 3.5 3. 3. 3.5 5.5 5. Over £60, r £60,000 000 1.5 1. 3.9 3. 3.5 3. 5.9 5. NB: The rates are gross - before tax relief. The amount of tax relief you receive will depend on your individual circumstances. You can find out what these contribution increases mean for your take home pay in more detail by using the 2012 contributions calculator on the Civil Service Website
Stage 2: 2: fro rom April ril 201 2015 New p pensi nsion s sche cheme On 9 March 2012, the Government reached a conclusion in its discussions with the trade unions on Civil Service pension reform. A ‘Proposed Final Agreement’ (PFA) has been put to the trade unions and it is now for them to consult their members. The Government has reserved the right to make further changes if the PFA does not receive sufficient trade union support. The two main differences of the new 2015 scheme are featured in this presentation. For further information on the PFA, see the Civil Service Website
Stage 2: 2: fro rom April ril 201 2015 New p pens nsion s sche cheme New scheme for most from April 2015 Two main changes: 1. 1. New age f age for cl clai aiming yo g your ur ful ull p pens nsion benefits: Scheme P Pens nsion Age Age i in n line wi with th S Stat tate P Pens nsion Age Age 2. . New wa way y of cal calculating y g your ur pens nsion b bene nefits: Ca Care reer er avera rage s e scheme
Stage 2: 2: fro rom April ril 201 2015 New p pens nsion s sche cheme 1. 1. New age f age for cl clai aiming yo g your ur ful ull p pens nsion benefits: Scheme P Pens nsion Age Age i in n line wi with th S Stat tate P Pens nsion Age Age Scheme Pension Age = the age at which you can take your pension in full. State Pension Age is due to increase to 68 over time. You can work out your State Pension Age on the Directgov website. Calculating your State Pension Age You would not have to work until this age. You can retire earlier but your new scheme pension would normally be reduced because it would be paid out for longer.
Recommend
More recommend
