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Accrual of Future Pension Benefits

Contributing Scheme members will be aware that under the provisions of the Public Service Pensions Act 2013 there was a requirement for the UKAEA defined benefit final salary pension schemes to close for future service accrual.  With the agreement of Her Majesty’s Treasury and the Cabinet Office UKAEA made plans to close the schemes to contributing members with effect from 31 March 2017.

Future benefits for those affected were to be provided under a different type of defined benefits known as a Career Average Revalued Earnings (CARE) Scheme.  Under these arrangements instead of using total reckonable service and applying pensionable final earnings to produce the pension benefits, the pension provided under the CARE scheme is calculated based on earnings each year to produce a pension which is revalued taking account of an index of price increases.


The UKAEA schemes planned to apply the same transition arrangements for members to join the alpha CARE scheme which were similar to those which had applied across the public service.  Under these arrangements individuals who were eligible to be contributing members who as at 1 April 2012 were:


  • within 10 years of normal pension age were not affected by the transition to the CARE arrangement and remained in the final salary scheme until they retire;

  • more and 10 years but less than 13½ years from normal pension age would transition to the CARE arrangement between 1 April 2017 to February 2022 depending on their date of birth;

 

  • more than 13½ years to normal pension age would join the CARE scheme from 1 April 2017.

  • eligible to join the joined the UKAEA schemes on or after 1 April 2012 (regardless of their age at 1 April 2012) would join the CARE scheme from 1 April 2017.
 

Following uncertainty about these transition arrangements as a result of two employment tribunal cases, entry to the CARE arrangement did not take place on 1 April 2017. 

Both the effective date for transition and the transition arrangements themselves will not be known until the legal appeals have been completed.  We do not expect to receive further information about the outcome of the appeals process before November 2017 and it is therefore anticipated that the CARE scheme arrangements will not apply to affected members of the UKAEA schemes before 1 April 2018.

The introduction of the CARE scheme arrangements will not affect those members receiving a UKAEA pension or those who have deferred benefits payable at normal pension age.