The following Private Client guidance note provides comprehensive and up to date legal information covering:
Public sector pensions are occupational schemes for employees of central or local government, a nationalised industry or other statutory bodies. They include pension schemes authorised by statute for the:
armed forces (AFPS)
civil service (CSPS)
local government (LGPS)
National Health Service
Public sector pension schemes have around 12 million members including approximately 5 million active members. The LGPS in England and Wales is the largest public sector pension scheme.
Key features of public sector pensions are:
they are described as unfunded—the reality is that there is no pot of money paid in by workers in the past to pay today’s pensioners and the money to pay benefits comes from today’s workers and the employer (effectively the state) on a pay-as-you-go basis
most run at a deficit as there are not enough contributions to pay today’s pension benefits and the Treasury meets the shortfall
the LGPS is different as it has underlying investments
Points to note in relation to public sector pension contributions are:
contributions vary wildly between sectors and depending on the scheme
there are many scheme variations even within one employer—for example, there are five different CSPS schemes open to employees who joined at different times
contribution rates were increased for the financial year 2013/14 with the stated aim of ensuring a fairer
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234