All Spouses’ and Children’s Pension Schemes are contributory. Spouses’ and Children’s pension contributions are in addition to contributions that may be required under the member’s main scheme, and the Additional Superannuation Contribution. The contribution arrangements that apply under the civil service Spouses’ and Children’s Pension Schemes, as well as the majority of equivalent schemes in the public service, are summarised below. The arrangements are the same under both the Original and the Revised Spouses’ and Children’s Pension Scheme rules, with the exception of the rules on refund of contributions.
Periodic Spouses’ and Children’s Pension Contributions
Spouses’ and Children’s Pension Scheme members are required to pay a periodic contribution of 1.5% of salary in respect of all periods of pensionable service. This is normally deducted from salary at source on a continuous basis.
Non-Periodic Spouses’ and Children’s Contributions
Non-periodic Spouses’ and Children’s contributions are payable by deduction from retirement lump sum, preserved lump sum, death gratuity or preserved death gratuity, as appropriate, where for whatever reason a member has not made periodic contributions in respect of the entirety of their pensionable service. For example, service given prior to the introduction of the Spouses’ and Children’s Pension Scheme (‘pre-scheme service’), cases of death in service or retirement on ill health grounds where the member is credited with notional service, other notional service such as awards under schemes of Professional Added Years.
Non-periodic contributions are also payable at retirement in respect of pensionable allowances which form part of final pensionable remuneration, where Spouses’ and Children’s contributions have not already been paid in respect of those allowances.
The non-periodic contribution rate is 1% of final salary for each year of pensionable service for which periodic contributions have not already been paid. In the case of pensionable allowances, the contribution is calculated at 1% of the relevant pensionable allowances for each year pensionable service.
Under both the Original and Revised Schemes, non-periodic contributions owed at retirement are not deductible where a member has remained unmarried throughout the entirety of their service.
Refund of Spouses’ and Children’s Contributions
Where a member of the Original Scheme is unmarried at the time of retirement (or on ceasing service in the case of preserved pension/death in service) and has remained unmarried throughout the entirety of their membership of the Spouses’ and Children’s Pension Scheme, and they do not transfer their service to another organisation, a full refund of Spouses’ and Children’s Pension Scheme contributions is payable. This is because the Original Scheme does not provide survivor benefits for a marriage or children born or adopted after retirement.
A partial refund may also be paid in certain circumstances, including where the member’s spouse dies before the member’s retirement or where contributions have been paid for a period in excess of 40 years.
Refunds under the Revised Scheme are only available where a member resigns without an entitlement to pension benefits and does not transfer their service to another organisation, or where they have paid periodic contributions for a period in excess of 40 years, in which case a partial refund may be payable. In such cases, the amount to be refunded is generally based on contributions paid from the earliest period of service, working forward.
This is because the Revised Scheme provides additional benefits to the member, covering spousal benefits where the marriage takes place after retirement, and children born or adopted after retirement. Although the Revised Scheme provides this additional coverage, the contribution rate remained the same at 1.5% of salary. The provisions relating to refunds were therefore made more restrictive to finance the increased costs arising from the wider class of beneficiary under the Revised Scheme.