DPF Circulars

DPF CIRCULAR NO. 17/07

29 June 2007

Pensions Update

Members are advised that the following changes are proposed to the existing classic and premium pension schemes.

1. Raising the 40 year limit on reckonable service to 45 years (for service from March 2008).
2. Introduction of flexible retirement so that members may draw down pension while continuing to work (from March 2008).
3. A bigger tax-free lump sum, which can be obtained if members commute more of their pension (from October 2007).
4. Replacing added years with added pension, enabling members including those over 60 - to buy up to £5,000 a year of pension (from October 2007 for over-60's, March 2008 for everyone else).

For new entrants: -

1. From July 30, a new "whole career" scheme called "Nuvos" is introduced. This will remain a defined benefit scheme with full RPI indexation of benefits.
2. It will feature a normal pension age of 65 and will link pension benefits to salary earned throughout a career, rather than final salary just before retirement.
3. Nuvos will have an accrual rate of 2.3 per cent of pensionable pay, equivalent to 1/43.5ths compared to 1/60ths in premium or 1/80ths in classic.
4. The benefits provided by the new scheme will be broadly the same as in premium and will have a 3.5% per cent contribution rate.

For more information go to www.civilservice-pensions.gov.uk

Paul O'Neill
General Secretary