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The Principal Civil Service Pension Scheme (PCSPS) is a final salary scheme. Benefits are worked out as a proportion of final pensionable earnings multiplied by years of service. Men and women have paid the same level of contributions and received benefits calculated on the same basis, including contingent dependants’ benefits, in respect of service from 1 July 1987. To the extent that they have consistent career and salary patterns, the pension scheme therefore provides equal benefits.
New entrants to the civil service since October 2002 have, as an alternative to joining the PCSPS, been eligible to join partnership, a stakeholder pension arrangement, providing benefits on a money purchase basis. Employer contributions to partnership are between 3 per cent. and 12.5 per cent. of pensionable earnings based on the member’s age but regardless of gender. Employers also match employee contributions up to 3 per cent. of pensionable earnings.
In addition amendments to the rules of the PCSPS will be laid before the House before the summer recess. These amendments will ensure that the pension arrangements do not discriminate on the grounds of age without any objective justification.