Public Sector Pension Reform

Government Unified Scheme

• All scheme members will slowly transition to a minimum 5% contribution rate at 1% per year with effect from the implementation date of 1st April 2012.

• All past service will be protected and transferred at fair value (this will be independently verified and certified).

• All existing scheme members will have the opportunity to protect their existing level of benefits at their current normal pension age for all future service, but they will need to pay more (this is likely to cost between 2.25% and 4% extra. The cost varies depending on your current scheme) e.g. a Classic Member opting to protect is likely to pay 7.75% in total and will be able to retire at 60 with broadly the same value of benefits as they expected within Classic, but in a more flexible package.

• Existing scheme members who are due to retire within the seven years following the implementation date will be given this protection for free (but they will still need to pay the minimum 5% contribution rate or their current contribution rate if higher).

• Scheme members will be able to work later if their terms and conditions permit, but they do not have to do so. They will be able to retire at any age between 55 and 75.

• If members opt to work beyond their current normal pension age they will not only gain through earning additional years of pension but also through an actuarial increase to their benefits (this is not currently available in most of the existing schemes).

• New joiners will continue to be allowed to join the scheme and will pay the 5% contribution rate. Where appropriate, new joiners may be allowed to protect if they are joining from a relevant overseas scheme.

• The link with the UK will be broken – changes made by the UK Government will no longer control the Isle of Man pension arrangements.

Downloadable Documents