Changes to the civil service pension scheme
Civil servants belong to one of two schemes: those who became members before 30 July 2007 are in the Civil Service Classic Final Salary scheme, while those who joined after this date will be in the Civil Service Nuvos Career Average scheme.
The impact of the forthcoming changes - which come into force in April 2015 - are much greater on those in the original final salary scheme, with the value of pension benefit dropping from 28% of a member's salary before the reforms to 17% after. In contrast, those in the Nuvos scheme will see their pension benefits drop from 22% of their salary to 18%.
The normal pension age for the original final salary scheme is 60. The current normal pension age for Nuvos is 65, but following the reforms, members will have a normal retirement age set in line with the state pension age. Tapered protection for members will extend for three and a half years beyond the full protection provided for those within 10 years of their normal pension age.
The accrual rate will be 1/43.1 of each year's pensionable earnings, with no limit on pensionable service. This is slightly higher than the current rate for the Nuvos scheme.
However, average contributions made by members will also rise to 5.6% of salary, compared to 3.5% for the Nuvos scheme. The government says the majority of staff will pay less than 5.6%, but admits the higher average rate is "effectively a pay cut as a result of the announcement to limit pay rises to 1% of pay bill".
Those earning up to £21,000 will contribute 4.6% of pensionable pay, while those earning £21,001 to £45,000 will contribute 5.45%. Higher earners will see their contributions increase dramatically, however: those earning between £45,001 and £149,999 will contribute 7.35% while the highest earners on £150,000 and above will pay 9%.
The Civil Service provides a pension calculator at civilservice.gov.uk/pensions/reform/key-elements.