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Thursday, 3 December 2009

Civil Service Compensation Scheme

I would not normally write about the Civil Service - on the principle that you don't bite the hand that feeds you - but the proposal to change the scheme under which Civil Servants are made redundant has made me extremely annoyed. The current scheme allows for several ways of getting rid of surplus Civil Servants, both voluntarily and on compulsory terms.

I left on voluntary terms which meant my pension and lump sum was paid immediately though my pension wasn't increased as it would have been under compulsory terms. If I hadn't retired when I did then I would have had to continue working probably beyond 60 and could have been forced to move house as I wouldn't have been able to afford to go voluntarily under the new scheme as I would have had no income until I could take my pension at 60.

I know they have to make things affordable but the whole point of the CSCS is that it's a convenient way of reducing staff if need be without paying them on compulsory terms. Under the new set up they won't get as many people volunteering and they will have to make them redundant - potentially increasing the number on the unemployment register. I suspect this is all being done because the public think the scheme is much more generous than it is and think people are walking away with millions - which they aren't. Civil Servants have never been paid the going rate for the job because of the final salary pension scheme and the CSCS and of course the job security.

Unfortunately what the media don't tell you is the pension scheme has changed from final salary to career average for anyone joining since 2007 and they have to pay a lot more for it. The changes are going to happen - apparently - next year. The union for the majority of Civil Servants is PCS and they are trying for a Judicial Review of the whole thing. This is a good example of the Government listening to the vocal minority who think anyone who gets something they don't should be penalised. Instead of campaigning for better pensions for everyone this minority are only happy if everyone is suffering. If this change goes ahead it will be the thin end of the wedge for everyone working in the public sector.


kcm said...

Industry isn't too much different. We are currently all being thrown out of our final salary scheme. Fortunately the company is allowing those of us most badly affected to take early retirement (voluntarily), so I am. The alternative is if I were to stay past next year I'd lose something like 25% of my pension, when I'm almost at the point of beign able to get as much pension as HMRC will allow with no time to recover the loss. And it isn't being handled well. Senior management (and this seems to apply in all companies) are worried only about one thing these days: their stock options; everything else is expendable. And they wonder why morale is rock bottom.

Jilly said...

No I didn't think it was. I'm just glad I jumped ship when I did. It's good that you're going to get early retirement out of it though.
I don't think this sort of thing is ever handled well in either public or private sector as they always seem to have completely arbitrary cut off dates for changes which usually succeed in disadvantaging the very people they should be fighting to keep in jobs - ie. the experienced ones.
I could see them attacking the Civil Service Pension scheme if I'd stayed which was another reason for going. If I'd stayed later than 60 I would have only got some of my pension paid when I retired and the rest at 65 - which was crazy - so I was intending to go at 60 anyway.