refunding - The Civil Service

Spouses’ & Civil Partners’ Pensions 

Refunds: 5.contents 

Family Benefits 

Spouses’ and Civil Partners’ Pensions 

Section 5 

The PCSPS 

refund 

arrangements 

fam\5.m (1) Issue 4: April 2006



5.1 Refunds to unmarried/non civil partnership members 

leaving the PCSPS at age 60 or over 

The refund 

Information to be given to unmarried/non civil partnership members 

before they leave the PCSPS 

Action before refunding contributions paid for service on or after 6 

April 1978 (men) 6 April 1988 (women) 

Annex A 

Forms: refunding contributions to members 

5.2 Refunds to unmarried/non civil partnership members leaving the 

PCSPS before age 60 


Service before 6 April 1978 (men); 6 April 1988 (women) 

Service on or after 6 April 1978 (men); 6 April 1988 (women) 

Contributions paid for more than 40 years 

Unmarried/non civil partnership members who leave the PCSPS 

without qualifying for a pension 

Members who take a transfer value 

Information to be given to members before they leave the PCSPS 

Action before refunding contributions paid for service on and after 6 

April 1978 (men); 6 April 1988 (women) 

Annex A 

Forms: refunding contributions to former members 

5.3 Refunds to married/civil partnership members 


5.4 Refunds following the death of a member or former member 


Action following the death of a member 

Action following the death of a former member 

5.5 Calculating the refund: unmarried/non civil partnership 

members 

Contributions which are refunded 

Separating the refund into sub-calculations 

Interest on refunded contributions 

Deducting the premium 

Applying income tax to the refund 

Amount to be paid to the member 

Added years 

Reserved rights: members in post on 30 November 1989 

Members who left the PCSPS before 1 December 1989 




5.6 The interest calculation 

The interest calculation 

Enhancement of service 

The interest rate 

Service ended on or after 1 April 1990 

Service ended 1 December 1989 to 31 March 1990 (inclusive) 

Annual Building Society rate 

5.7 The premium calculation 

The premium 

Amount of the premium 

Unmarried/non civil partnership members whose marriage or civil 

partnership has ended 

Unmarried/non civil partner members with transferred-in service 


Annex A 

Annex B 

Marriage/civil partnership ended before leaving the 

PCSPS 

Members with transferred-in service 

5.8 Example of refund calculation 

5.9 Reserved rights: members in post on 30 November 1989 

The refund arrangements 

5.10 Refunds paid to unmarried/non civil partnership members who 

left the PCSPS before 1 December 1989 


Unmarried/non civil partnership members who did not receive a 

refund 

Interest 

5.11 Repaying a refund 

When refunds must be repaid 

Repaying a refund on marriage/civil partnership 

Repaying a refund on asking for a transfer value 

Repaying a refund on re-employment after a short break 

Action by departments 

Annex A 

Calculating the repayment of a refund 


Spouses’ & Civil Partners’ Pensions Refunds: 5.1 

5.1 Refunds to members 

who are neither married 

nor in a civil partnership 

leaving the PCSPS at age 60 or over 


5.1.1 Members are given a refund of contributions when the 

assessment of the contributions account (section 4) shows that the 

contributions they have paid are greater than the amount due. 

5.1.2 All contributions are refunded to members who have neither 

married nor entered a civil partnership throughout their service. Only 

part of the contributions are refunded to members who have been 

married or in a civil partnership for part of their service. The refund 

may include contributions paid by the member in respect of service 

both before and after 6 April 1978 (men); 6 April 1988 (women). 

5.1.3 A premium is deducted from the refund to cover the PCSPS’ 

contingent liability to pay a post-retirement spouse’s or civil partner’s 

pension (5.7). 

5.1.4 A refund is automatically paid to members who are neither 

married nor in a civil partnership when they leave the PCSPS at or 

after age 60 with immediate payment of a pension. A refund is paid as 

soon as possible after the last day of service and is treated as part of the 

member’s retirement lump sum. The refund calculation is explained in 

5.5. 

5.1.5 Members with a retiring age below 60 who are neither 

married nor in a civil partnership and leave the PCSPS at or after 

reaching their retiring age but before reaching age 60, receive an 

automatic refund when they leave the PCSPS and draw their pension in 

respect of their service during which they were neither married nor in a 

civil partnership. 

5.1.6 Details are set out in 5.2. 

fam\5.1 (1) PC268: September 2006

Refunds: 5.1 


NOTE – As from 5 December 2005 WPS contributions paid by members will 

provide for a contingent civil partner’s pension for reckonable service after 6 April 

1988. For the purposes of determining whether a member is entitled to a refund of 

contributions in respect of service from 6 April 1988, periods during which the 

member was in a civil partnership will be treated in the same way as if the member 

had been married during the period in question. 

Information to be given to members who are 

neither married nor in a civil partnership before 

they leave the PCSPS 

5.1.7 Employing departments must give members who have an 

entitlement to a contribution refund the information in table 1 before 

they leave the PCSPS. 

Table 1 Information for the member 

As an single member of the classic section of the Principal Civil Service Pension Scheme, you 

are entitled to a refund of family benefit contributions in respect of 

all your service 

your service since 6 April 1978 (men); 6 April 1988 (women) 

your service since your marriage or civil partnership ended. 

The contributions due to be repaid to you will be refunded with interest and paid with your lump 

sum at the time you draw your pension. 

Service on or after 6 April 1978 (men); 6 April 1988 (women). Any part of the refund in 

respect of service on or after 6 April 1978 (men); 6 April 1988 (women) will be subject to the 

payment by you of a single premium to cover the PCSPS liability to pay a post-retirement 

spouse’s or civil partner’s pension should you marry, re-marry or enter a civil partnership after 

leaving the PCSPS. The premium will be deducted from the refund of contributions. 

The calculations involved rely on information which we have to obtain from other sources. This 

will take several weeks. Please get in touch with the contact named below if you have not heard 

from us within 3 months of your last day of service. 

Contact ……………………. 



Action before refunding contributions paid for 

service on or after 6 April 1978 (men) 6 April 1988 

(women) 

5.1.8 Employing departments must obtain the information in 

table 2. 

Table 2 Information required when a member retires at age 60 or over 

Information required 

Action 

The member’s WPS contribution 

record in respect of service since 

6 April 1978 (men); 6 April 1988 

(women), plus interest. 

Add interest for the period up to a date 6 weeks after the 

member’s last day of service. This is calculated by the 

awarding authority. 

The accrued post-retirement 

spouse’s pension. 

This is obtained from the awarding authority. 

NOTE This information is not available until at least 6 

weeks after the member has retired. 

NOTE Those who received a WPS refund before 6 April 2006 were given the option of 

providing for a post-retirement spouse’s pension at either the PCSPS rate or the GMP rate. 

This option is no longer available and for those who receive a WPS refund from 6 April 2006 

the post-retirement spouse’s or civil partner’s pension is always at the PCSPS rate. 

5.1.9 (paragraph deleted) 

5.1.10 The employing department must pass the above information 

to the APAC, who will authorise the award (including the refund of 

contributions) for payment by the Paying Authority. 

WPS refunds from 6 April 2006 

5.1.11 From 6 April 2006, WPS contribution refunds are treated as 

part of the member’s retirement lump sum. This means that they must 

be paid at the time the member receives their pension. 

5.1.12 If, for whatever reason, the refund is not paid within twelve 

months of the member’s pension coming into payment, it cannot be 

paid as a single lump sum. In such circumstances, some of the refund 

can be converted into an additional pension for the member only (it will 

not result in an increase in the contingent spouse’s/civil partner’s 

pension). This calculation is carried out by Penserver. 

Deleted: three 

5.1.13 Eligible individuals should be given two options regarding 

their WPS refund: 


Refunds: 5.1 


 

 

Option 1: 25% of the value of benefits can be taken as a lump sum. 

No tax deduction will be made from this amount. The remaining 

value of the refund is converted to extra pension. 

Option 2: Taking the refund as a lump sum. They must be informed 

that they will be liable to pay tax on this amount. The tax charge 

will be at least 40% 

A member invited to choose from these options who does not reply 

should be paid as option 1. 

Note: Where a member retires before 6 April 2006 and had not reached 60 at the time 

they retired their WPS refund must now be dealt with as in 5.1.12 and 5.1.13 



Refunds: 5.1 Annex A 

5.1 Annex A Forms: refunding 

contributions to 

members 

These forms are now obsolete. 

fam\5.1a (1) Issue 4: April 2006


5.2 Refunds to members 

who are neither married 

nor in a civil partnership 

leaving the PCSPS before age 60 





5.2.2 All contributions are refunded to members who have neither 

married nor entered a civil partnership throughout their service. Only 

part of the contributions is refunded to members who have been 

married or in a civil partnership for part of their service. 

5.2.3 The refund calculation is explained in 5.5. 

A premium is deducted from the refund to cover the PCSPS contingent 

liability to pay a post-retirement spouse’s or civil partner’s pension 

(5.7). 

From 6 April 2006 members who are neither married nor in a civil 

partnership and leave the PCSPS on retirement before reaching 60, 

receive an automatic refund with their retirement lump sum. This will 

be in respect of service during which they were neither married nor in 

a civil partnership. 

Members who had already drawn their pension early before 6 April 

2006 will have two options for receiving their refund when they do 

reach 60: 

Option 1 – Contributions due to be repaid will be refunded with 

interest. 25% of the value of benefits can be taken with their lump sum. 

No tax deduction will be made from this amount. The remaining value 

of the refund is converted to extra pension 


Refunds: 5.2 


Option 2 – Individuals can still take the refund as a lump sum. They 

will be liable to pay tax on this amount. This charge will be at least 

40% 



Service before 6 April 1978 (men); 6 April 1988 

(women) 

5.2.4 A refund is automatically paid to members who are neither 

married nor in a civil partnership when they leave the PCSPS in 

respect of all or part of this period of service. 

NOTE This does not apply to members who take a transfer value 

(see below). 

5.2.5 The refund is paid with the retirement lump sum at the time 

they draw their pension. 

Note A: A member who retired before 6 April 2006 and had not reached 60 must 

wait until reaching 60 before receiving their refund. This is usually referred to as an 

orphan refund. 



Service on or after 6 April 1978 (men); 6 April 1988 

(women) 

5.2.6 Members who are neither married nor in a civil partnership 

are entitled to an automatic refund on drawing their pension in respect 

of all or part of this period of service if they: 

leave the PCSPS before age 60 with an entitlement to a 

preserved pension; 

do not marry, re-marry or enter a civil partnership between 

leaving and drawing their pension. 

NOTE For members entering a civil partnership from 5 December 

2005 the scheme has a liability to pay for a survivor’s civil partner’s 

pension for reckonable service since 6 April 1988 (men and 

women). Therefore men entering a civil partnership will only 

receive a refund for contributions made from 6 April 1978 to 5 April 

1988. Women entering a civil partnership from 5 December 2005 

will not receive any refund. 

5.2.7 No refund in respect of this period is paid to members who 

marry or re-marry between leaving the PCSPS and drawing their 

pension, even if the marriage ends and the member is single when they 

draw their pension. If the member is male and enters a civil 

partnership after leaving service but this ends before they draw their 

pension, they will receive a refund of their WPS contributions from 

6 April 1978 to 5 April 1988, provided they had not previously been 

married. 

5.2.8 The awarding authority calculates the amount of the refund. 

5.2.9 Interest on the contributions to be refunded is added as 

follows: 

when the main pension award is calculated and authorised. 

Interest for the period up to the last day of service; 

when the member draws their pension (see table 2). Interest 

for the period since the award was made. 

5.2.10 A premium is deducted from the refund to cover the PCSPS 

liability for a post-retirement spouse’s or civil partner’s pension (5.7). 

5.2.11 The refund is paid when the member draws their pension. 


Refunds: 5.2 


Contributions paid for more than 40 years 

5.2.12 When a member has paid contributions for more than 40 years 

before age 60, contributions are refunded with the retirement lump sum 

at the time the member draws their pension. Interest is added in the 

same way as for any other WPS refund. 

NOTE Before 6 April 2006, these refunds were treated as an 

underpayment of salary and refunded through payroll with tax applied at 

the appropriate rate. 

Members who are neither married nor in a civil 

partnership, who leave the PCSPS (classic) without 

qualifying for a pension 

5.2.13 As classic was generally closed to new members from 

1 October 2002, there should be no future cases of members leaving 

without qualifying for a pension. 



Members who take a transfer value 

5.2.16 No contributions are refunded when a member applies for a 

transfer value to be paid to another scheme when leaving the PCSPS. 

This is because provision for the spouse’s or civil partner’s pension is 

included in the transfer value. 

Information to be given to members before they 

leave the PCSPS 

5.2.17 Employing departments must give the information in table 1 

to members with an entitlement to a refund of contributions before 

they leave the PCSPS. 

5.2.18 Employing departments must explain the circumstances under 

which a refund of contributions would be recovered on re-employment 

(5.11). 



Table 1 Information to be given to members who are neither married 

nor in a civil partnership on leaving the PCSPS 

As an member of the classic section of the Principal Civil Service Pension Scheme who is 

neither married nor in a civil partnership, you may be entitled to a refund of your family benefits 

contributions on drawing your pension, provided you neither marry nor enter a civil partnership 

during the intervening period after leaving the PCSPS. 

This refund is in respect of 

all your service 

your service since 6 April 1978 (men); 6 April 1988 (women) 

your service since your marriage or civil partnership ended. 

Any refund due to you in will be refunded with interest at the time you draw your pension. 

Any refund due to you in respect of service on or after 6 April 1978 (men); 6 April 1988 (women) 

will be subject to the payment by you of a single premium to cover the PCSPS liability to pay a 

post-retirement spouse’s or civil partner’s pension should you marry, re-marry or enter into a 

civil partnership after drawing your pension. The premium will be deducted from the refund of 

contributions. 

Please advise your next of kin or personal representative(s) as appropriate that, in the event of 

your death before drawing your pension, they should claim the refund of family benefits 

contributions by notifying the Paying Authority. 

Members leaving with a preserved pension. You should apply to the Paying Authority at 

least one month before the date that payment of your pension is due. You will then be sent 

details of the arrangements for refunding family benefits contributions along the lines described 

above. 

Action before refunding contributions paid for 

service on and after 6 April 1978 (men); 6 April 

1988 (women) 

5.2.19 The following procedure applies for members who are neither 

married nor in a civil partnership who leave the PCSPS before age 60, 

having qualified for a pension. 

5.2.20 The member must apply to the Paying Authority at the same 

time they draw their pension. 

NOTE Employing departments are asked to forward any requests 

made to them to the Paying Authority. 

5.2.21 The Paying Authority: 

checks that the member has remained unmarried and not 

entered into a civil partnership since leaving the PCSPS; 

if the member left service on or after 6 April 2006, applies 

interest to the post 1978/88 refund figure from the member’s 

award and pays the refund together with the member’s 

retirement lump sum; 


Refunds: 5.2 


if the member left service before 6 April 2006, passes the 

details to the awarding authority together with the member’s 

updated post-retirement contingent spouse’s and civil 

partner’s pension. 

5.2.22 The awarding authority must take the action in table 2. 

Table 2 Action by the awarding authority (member left service before 

6 April 2006) 

Action 

● Work out the member’s spouse’s or 

civil partner’s pension contributions, plus 

interest, up to the last day of service. 

(This information may already be held by 

the awarding authority. In other cases the 

employing department will supply it.) 

Description 

Add interest to the member’s spouse’s or civil 

partner’s pension contributions for the period 

between the date the member left the PCSPS to 

the date of payment. 

NOTE Interest up to the last day of service will 

have been added when the pension or annual 

compensation payment was authorised. 

when the above information has been 

obtained 

Calculate the premium payments and 

balance of the refund. 

● Authorise a corrected award (where 

applicable). 

● Authorise payment of the refund by the 

Paying Authority. 

NOTE: There is no longer to be a post retirement pension GMP option from 

6 April 2006 for those qualifying for WPS contribution refunds. As a 

consequence, the contribution refund option forms (i.e. forms WP6 through to 

WP16) are no longer needed after 6 April 2006. 

Note: Refunds outstanding from prior to 6 April 2006 needed to be paid by 

APACs prior to 6 July 2006 

WPS Refunds from 6 April 2006 

5.2.23 From 6 April 2006 WPS contribution refunds form part of the 

member’s retirement lump sum. This means that they must be paid at 

the time the member receives their pension and are not subject to a 

deduction for tax. 




5.2 Annex A Forms: refunding 

contributions to former 

members 

These forms are now obsolete. 



5.3 Refunds to married/civil 

partnership members 





5.3.2 Married and civil partnership members are entitled to an 

automatic refund of any excess contributions when they leave the 

PCSPS. The refund is payable when they draw their pension. 

5.3.3 The refund is calculated as described in 5.5. A premium is 

not deducted from the refund, even though the excess contributions 

have been paid after 6 April 1978 (men); 6 April 1988 (women). 

fam\5.3 (1) Issue 4: April 2006


5.4 Refunds following the 

death of a member or a 

former member 


5.4.1 A refund of contributions is payable when the assessment of 

the contributions account (section 4) shows that the contributions the 

member or former member paid are greater than the amount due. The 

refund calculation is set out in 5.5. 

5.4.2 In all cases, the personal representative must make a request 

for the refund. 

NOTE A refund is not added automatically to the death benefit 

when a member has made a nomination in respect of the death 

benefit. The refund must be requested by the personal 

representative and paid separately. 

5.4.3 A refund is made to the personal representative in the 

following circumstances. 

when an member who is neither married nor in a civil 

partnership dies in service; 

when a former member dies, provided the member: 

- was neither married nor in a civil partnership on leaving the 

PCSPS and has never married nor entered into a civil 

partnership since; and 

- did not receive a refund prior to death. 

NOTE A member may have received a refund in respect of service 

before 6 April 1978 (men); 6 April 1988 (women). The personal 

representative is paid a further refund when there is an entitlement 

in respect of service after that date for which no refund was paid to 

the member. 


Refunds: 5.4 


5.4.4 The refund is paid as soon as possible after the date of death. 

A premium is not deducted from the refund even when 

contributions paid in respect of service on and after 6 April 

1978 (men); 6 April 1988 (women) are refunded. 

Action following the death of a member 

5.4.5 When a member dies in service, the employing department 

must advise the awarding authority to calculate a refund when the 

personal representative asks for one. 

Action following the death of a former member 

5.4.6 The Paying Authority will refer any application made to it to 

the deceased’s last employing department. 

5.4.7 The employing department must check that the person neither 

married nor entered into a civil partnership at any point between 

leaving service until death. When this has been confirmed the 

employing department must ask the awarding authority: 

to calculate the amount of the refund, with compound 

interest up to the date of death; and 

to authorise the Paying Authority to make the payment. 


Spouses’ and Civil Partners’ Pensions Refunds: 5.5 

5.5 Calculating the refund: 

unmarried/non civil partnership members 

This chapter does not apply where the excess contributions arise: 

out of a misapplication of the PCSPS rules (3.4); or 

from an overpayment of additional periodical contributions in respect 

of a member with more than 40 years’ service at the retiring age (4.3); 

or 

when a member paid additional periodical contributions in the 

expectation of a grant of added years (arising out of an incentive 

scheme for retaining members who have passed the retiring age) 

which does not then take place (3.2). 

Contributions which are refunded 

5.5.1 The refund may consist of: 

excess periodical contributions; 

a lump sum contribution (for example, when the member 

paid a lump sum contribution to cover a period of 

enhancement on being retired for health reasons); and 

family benefit pension contributions made under the added 

years provisions. 

5.5.2 The refund of contributions is limited to contributions actually 

paid by the member. When a member has transferred-in service a 

refund is not due in respect of that period of service if the transfer 

value paid to the PCSPS purchased the spouse’s or civil partner’s 

pension arising from that service. 

5.5.3 Section 4 sets out the steps which determine whether, and 

what, contributions are to be refunded. 


Refunds: 5.5 


Separating the refund into sub-calculations 

5.5.4 The refund calculation is divided into a number of subcalculations 

set out in table 1. A calculation in respect of a member 

may include some or all of these sub-calculations. 

Table 1 The refund calculation 

Service 

Before 6 April 1978 (men); 

6 April 1988 (women) 

Sub-calculation 

● Contributions actually paid before 6 April 1973. (NOTE A) 

● Contributions actually paid on and after 6 April 1973 in 

respect of service before 6 April 1978 (men) 6 April 1988 

(women). (NOTE B) 

Including any additional periodical contributions paid on and 

after 6 April 1978 (men); 6 April 1988 (women) in respect of 

service before that date. 

On and after 

6 April 1978 (men); 

6 April 1988 (women) 

● Contributions paid in respect of service on and after 6 April 

1978 (men); 6 April 1988 (women). (NOTE B) 

Any period of service. 

● Any lump sum contributions paid as a deduction from the 

retirement lump sum. 

NOTE A For administrative simplicity, contributions paid from 1 April 1973 are taken as 

contributions paid from 6 April 1973. 

NOTE B For administrative simplicity, contributions paid from 1 April 1978 (men); 1 April 1988 

(women) are taken as contributions paid for service on or after 6 April 1978 (men); 6 April 1988 

(women). 

Interest on refunded contributions 

5.5.5 Compound interest is added to the contributions to be 

refunded. The yearly average of the Building Society basic rate was 

used from 1 April 1990 to 31 March 1995 and the average of the 

Building Societies Average Share rate from 1 April 1995. Different 

interest rates have applied in the past. The interest calculation is set 

out in 5.6. 

NOTE The yearly average of the Building Societies Average Share 

rate is announced by the Cabinet Office each year. 



Deducting the premium 

5.5.6 Having arrived at a sub-total (contributions plus interest) in 

respect of each sub-calculation, a single non-refundable premium to 

cover the PCSPS liability for a post-retirement spouse’s or civil 

partner’s pension is deducted from the sub-calculation in respect of 

contributions paid for service on and after 6 April 1978 (men); 6 April 

1988 (women) when the member is unmarried. 

NOTE A premium is not deducted: 

when the member is neither married nor in a civil partnership and 

has not qualified for a pension; or 

when the refund is being paid to a personal representative. 

Applying income tax to the refund (refunds paid 

before 6 April 2006 only) 

5.5.8 Refunds of periodical contributions (and interest paid on the 

refunds) were reduced by 20% (10% for members who left the PCSPS 

before 1 June 1988) on account of income tax from each subcalculation 

with the exceptions in table 2. 

Table 2 † 

Circumstances when no reduction is made for income tax 

Circumstances 

Income tax deducted 

Contributions which were originally 

paid before 6 April 1973. 

No reduction is made for income tax on either the 

contributions or the interest paid on the refund. This is 

because such contributions were not given tax relief. 

Members with more than 75% of 

service in an overseas country. 

No reduction is made for income tax. 

Enhancement of service. 

No reduction is made at source for income tax. 

Individuals must consult their own tax inspector. 

Death of the member or former 

member. 

No reduction is made for income tax when the refund 

is paid to a personal representative. 

5.5.9 The reductions is made irrespective of the amount of tax relief 

allowed when the contribution was originally paid. 

This can no longer be applied to cases where the refund was not paid 

by 6 July 2006 

_______________________ 

† 

Reproduced in 5.10. 


Refunds: 5.5 


5.5.10 Income tax is applied after the deduction of the premium. See 

examples in 5.8 

NOTE Refunds paid on or after 6 April 2006 are paid as part of the retirement lump 

sum, and are, consequently, not subject to a deduction for tax. 

Amount to be paid to the member 

5.5.11 The amount to be refunded is the balance of the contributions 

plus interest, less the premium (where appropriate), less tax (not 

refunds paid after 6 April 2006). 

NOTE: A member who retired before 6 April 2006 but had not reached age 60 at the 

date they retired receives a refund of their WPS contributions on reaching 60. These 

are known as orphan refunds and will be subject to new tax rules if paid as a lump 

sum after 5 April 2006. Eligible individuals should be given two options: 

Option 1–25% of the value of benefits can be taken with their lump sum. No tax 

deduction will be made from this amount. The remaining value of the refund is 

converted to extra pension 

Option 2 – The refund paid as a lump sum. Tax rules mean that this is classed as an 

unauthorised payment and subject to tax of at least 40%. The refund is paid without 

tax deducted and notified to Her Majesty’s Revenue & Customs (HMRC). It should 

be made clear to the member that they will be personally responsible for paying tax 

due to HMRC. 



Added years 

5.5.13 Members who opted to buy added years are eligible for a 

refund if the contributions they have paid are greater than the 

contributions due in respect of the added years bought. The 

assessment of the account is set out in 4.4. 

5.5.14 The refund covers the element for a spouse’s or civil partner’s 

pension which they have paid in their contributions. 

5.5.15 When a member has made more than one option, each option 

is treated separately for refunded purposes. 

5.5.16 The refund is calculated separately from the calculation in 

respect of the ordinary spouse’s or civil partner’s pension 

contributions, but it is calculated in the same way. A premium is 

deducted from the refund when the added years option was made on or 

after 6 April 1978 (men); 6 April 1988 (women). 



5.5.17 The refund is paid, along with any other refunded 

contributions, when the member draws their pension. 

5.5.18 When the spouse’s or civil partner’s cover in respect of the 

added years was bought by a lump sum payment during service, 

interest is calculated from the date the employing department received 

payment to the appropriate date (explained in 5.6). Interest is 

compounded on 1 October each year (5.6). 


Refunds: 5.5 


Reserved rights: members in post on 30 November 

1989 

5.5.19 Members had a reserved right to the refund arrangements 

which applied before 1 December 1989 if they: 

were in post on 30 November 1989; and 

left the PCSPS on or after 1 December 1989 and on or 

before 30 November 1991. 

5.5.20 Details are given in 5.9. 

Members who left the PCSPS before 1 December 

1989 

5.5.21 The refund arrangements which apply to members who left 

the PCSPS before 1 December 1989 are set out in 5.10. 



Annual Building Society rate 

5.6.10 The arrangements for refunding WPS contributions were 

introduced on 1 December 1989. As from 1 April 1990, the 

arrangements changed from a fixed annual rate of compound interest 

paid on such contributions to a rate based on average building society 

rates. This was amended in 1995 to the average of the building 

societies’ average share rate. 

5.6.11 The annual Building Society rate (BS in the tables) is 

announced annually by the Cabinet Office. The rates are given in 

table 6 and take effect from 1 April each year. 

Table 6 † 

Annual BS rate 

Year 

1990-91 

1991-92 

1992-93 

1993-94 

1994-95 

1995-96 

1996-97 

1997-98 

1998-99 

1999-00 

2000-01 

2001-02 

2002-03 

2003-04 

2004-05 

2005-06 

2006-07 

2007-08 

2008-09 

2009-10 

2010-11 

2011-12 

2012-13 

2013-14 

Interest rate 

% 

6.20 

6.60 

3.35 

1.50 

0.66 

4.04 

4.17 

3.58 

4.34 

5.03 

3.93 

4.36 

3.75 

2.95 

2.68 

3.21 

3.39 

3.34 

3.91 

3.13 

0.94 

1.03 

1.18 

1.19 

_______________________ 


Refunds: 5.6 


† 

Reproduced in 5.11 Annex A 



5.7 The premium calculation 

This chapter applies only when a refund is paid to an unmarried/non civil 

partnership member. 

The premium 

5.7.1 A single (non-refundable) premium is deducted from the 

refund of contributions paid at age 60 to unmarried/non civil 

partnership members who leave the PCSPS having qualified for a 

pension. It is deducted from the refund in respect of service from 

6 April 1978 (men); 6 April 1988 (women) only. 

5.7.2 This premium is to cover the PCSPS liability to provide a 

pension to the spouse or civil partner of a member who marries (or 

remarries) or enters into a civil partnership after leaving the PCSPS. 

Paying a premium means that members do not have to repay the refund 

on marriage or re-marriage or entering into a civil partnership after 

leaving the PCSPS. 

5.7.3 - 5.7.8 (paragraphs deleted) 

Amount of the premium 

5.7.9 The premium needed is 30% of the current value of the postretirement 

widow’s or widower’s pension. 

A man retired on 31 March 1990. 

The member had 40 years’ reckonable service. 

Example 

1 

Pensionable pay: £8,081 

Contributions paid since 6 April 1978 (including interest at 5%) 

Post-retirement PCSPS widow’s pension 

£ 1,365.45 pa 

£ 605.38 pa 

Premium: 30% x £605.38 = £ 181.61 

Balance of refund payable: £1,365.45 - 181.61 = £1,183.84 


Refunds: 5.7 


Unmarried/non civil partnership members whose 

marriage or civil partnership has ended 

5.7.10 A reduced premium is due when a member’s last marriage or 

civil partnership ended after 6 April 1978 (men) or 6 April 1988 

(women) but before PCSPS membership ended. 

5.7.11 Details are set out in Annex A. 

NOTE Although a reduced premium is paid, the post-retirement 

pension is paid in full if the person subsequently marries or enters a 

civil partnership. 

Unmarried/non civil partnership members with 

transferred-in service 

5.7.12 A reduced premium is due when a member has transferred-in 

service which included either or both of the following: 

an element for a half-rate spouse’s or civil partner’s pension; 

a liability for a spouse’s or civil partner’s GMP. 

5.7.13 Details are set out in Annex B. 

NOTE Although a reduced premium is paid, the post-retirement 

pension is paid in full if the person subsequently marries or enters 

into a civil partnership. 


5.7.14 Where a period of enhancement has been credited as ‘service 

on or after 6 April 1978 (men); 6 April 1988 (women)’, the 

enhancement is included in the service used to calculate the pension. 

A premium is due in respect of it. 




5.7 Annex A Marriage or civil 

partnership ended 

before leaving the 

PCSPS 

Reduced premium 

1 A reduced premium is paid by members: 

who are neither married nor in a civil partnership when the 

premium is due (age 60 or over); and 

who have been previously married or in a civil partnership; 

and 

whose last marriage or civil partnership ended: 

- before the member left the PCSPS; and 

- after 6 April 1978 (men) or 6 April 1988 (women) 

2 In these circumstances the refund of spouse’s or civil 

partner’s pension contributions is based on the period from the date the 

last marriage or civil partnership ended to the date of leaving the 

PCSPS. The premium is reduced to cover this period only. 

NOTE This applies even when the PCSPS service includes a 

period after 6 April 1978 (men) or 6 April 1988 (women) before the 

marriage or civil partnership ended. 




Calculating the reduced premium 

3 The premium is calculated in the way set out below: 

Premium: 

period member paid contributions since end 

of last marriage or civil partnership x 30% x post-retirement pension 

period used in calculating the post-retirement 

spouse’s or civil partner’s pension 

Example 

1 

A man joined the PCSPS before 1978. 

His marriage ended on 30 September 1987. 

He retired on his 60 th birthday - 15 October 1992. 

Deleted: 

NOTE Any period of enhancement is 

excluded from the calculation of the 

premium for GMP cover. 

 

 

Premium: 

5.0041 x 30% x PCSPS pension 

14.5288 



Refunds: 5.7 Annex B 

5.7 Annex B Members with 

transferred-in 

service 

Reduced premium 

1 A reduced premium is paid by members who have 

transferred-in service following a transfer value payment to the PCSPS 

which included either or both of the following: 

an element for a half-rate spouse’s or civil partner’s pension; 

a liability for a spouse’s or civil partner’s GMP. 

2 When the transfer value included an element for a half-rate 

spouse’s or civil partner’s pension, the premium is limited to cover the 

actual service in the PCSPS only. 

NOTE The transfer value payment will have bought spouse’s or 

civil partner’s pension cover for the transferred-in period of service. 

No contribution refund is paid in respect of the transferred-in 

service. The premium is required, therefore, to cover only the 

period of service for which spouse’s or civil partner’s pension 

contributions have been paid into the PCSPS by the member (since 

6 April 1978 for men; 6 April 1988 for women). 

3 When the transfer value included a liability for a spouse’s or 

civil partner’s GMP, the GMP includes any period of contracted-out 

service for which the PCSPS has accepted liability as a result of the 

transfer value. It could, therefore, include a period of previous 

employment before entering the Civil Service. 

NOTE For the purpose of calculating the premium, service can 

start no earlier than 6 April 1978 (men); 6 April 1988 (women). 

fam\5.7b (1) Issue 4: April 2006



Calculating the reduced premium 

4 The premiums for PCSPS and GMP cover are calculated in 

the way set out below. 

Premium for PCSPS cover: 

period member paid spouse’s or civil partner’s 

pension contributions † x 30% x PCSPS post-retirement pension 

period used in calculating the post-retirement 

spouse’s or civil partner’s pension 

Premium for GMP cover: (no longer an option from 6 April 2006) 

period member paid spouse’s or civil partner’s 

pension contributions † x 20% x spouse’s or civil partner’s GMP 

period used in calculating member’s GMP †† 

† the ‘period member paid contributions’ covers only the period from 6 April 1978 

(men); 6 April 1988 (women). 

†† including any period of contracted-out service for which the scheme has accepted 

liability as a result of a transfer value. (This may be different from the service 

actually credited to the PCSPS.) (Annex B) 

NOTE Any period of enhancement is excluded from the calculation of the premium for GMP 

cover. 




A man joined the PCSPS on 6 April 1985. 

Example 

1 

The member was credited with 6 years’ reckonable service. 

(Notional start date 6 April 1979.) 

The member retired on 5 April 1990 with 11 years’ reckonable service. 

Premiums for PCSPS cover: 5 x 30% x PCSPS post-retirement pension 

11 

Premium for GMP cover: 5 x 20% x widow’s GMP 

12 

The GMP under the previous pension scheme actually covered a period of 7 years since 6 April 

1978. (Total contracted-out service = 12 years.) 

Example 

2 

The member in example 1 had been married, but his marriage ended on 5 April 

1988. 

Premiums for PCSPS cover: 2 x 30% x PCSPS post-retirement pension. 

11 

Premium for GMP cover: 2 x 20% x widow’s GMP 

12 



5.8 Example of refund 

calculation 

(Chapter deleted) 



5.9 Reserved rights: members in 

post on 30 November 1989 


5.9.1 Members who met the following conditions were given a 

reserved right to be treated under the refund arrangements in operation 

before 1 December 1989 ( see 5.10). 

5.9.2 The reserved right applied only to the refund of contributions 

paid in respect of service on or after 6 April 1978 (men) or 6 April 

1988 (women). A refund of contributions paid in respect of service 

before that date was calculated in accordance with 5.5. 

5.9.3 To qualify the member was required: 

to have been in post on 30 November 1989; and 

to have left the PCSPS on or after 1 December 1989 and on 

or before 30 November 1991; and 

on leaving the PCSPS, to have been: 

- aged 60 or over; or 

- aged under 60 and leaving with immediate payment of a 

PCSPS pension or annual compensation payment. 

5.9.4 Details of the options given to members are set out in table 1. 


Refunds: 5.9 


Table 1 The reserved right (members who left 1 December 1989 - 

30 November 1991) 

Age on leaving the PCSPS 

Refund of contributions in respect of service on or after 

6 April 1978 (men); 6 April 1988 (women) 

60 or over. Member could opt for a contribution refund to be calculated: 

in the way set out in 5.5; or 

under the arrangements which applied before 1 December 

1989 (if the refund under these arrangements was greater 

than that calculated under 5.5). 

Under 60 

with immediate payment of 

PCSPS pension or annual 

compensation payment. 

Member could opt for a contribution refund to be calculated: 

in the way set out in 5.5. This would be paid at age 60 

provided that the member remained unmarried or not 

entered into a civil partnership during the period from 

leaving the PCSPS until reaching age 60; or 

under the arrangements which applied before 1 December 

1989. This would be paid on leaving the PCSPS. 

5.9.5 Compound interest at the rate of 4% was applied throughout 

the calculation up to a date 6 weeks after the last day of service. 

5.9.6 Details of the two refund calculations were given to the 

member who then made an option on the form provided. 

5.9.7 The member had to sign the undertaking to repay the refund 

in the event of marriage or re-marriage (this also applies to civil 

partnerships from 5 December 2005) after retirement. ( see 5.11) 



5.10 Refunds paid to 

unmarried members who 

left the PCSPS before 1 December 1989 


5.10.1 A refund of widows’ and widowers’ pension contributions 

was paid to unmarried members when they left the PCSPS before 1 

December 1989 as follows: 

contributions paid in respect of service before 6 April 1978 

(men); 6 April 1988 (women). Contributions were refunded 

automatically as soon as possible after the last day of service; 

contributions paid in respect of service on or after 6 April 

1978 (men); 6 April 1988 (women). The main points 

concerning refunds of these contributions are set out in tables 

1 and 2. The refunds were paid as soon as possible after the 

last day of service. 

NOTE The reason unmarried members ceased to be entitled to 

automatic refunds was because of the obligation of the PCSPS to 

provide post-retirement widows’ pensions (from 6 April 1978) and 

post-retirement widowers’ pensions (from 6 April 1988). 

5.10.2 The undertaking to repay described in table 1 placed a legal 

obligation on the individual and these arrangements continue to apply 

to anyone who took a refund on this basis. 

NOTE If repayment is not made for any reason, only a postretirement 

widow’s or widower’s pension at the level of the 

Guaranteed Minimum Pension (GMP) is put into payment. 

(Since 1 December 1989) 


Refunds: 5.10 


5.10.3 The undertaking to repay is held by the employing 

department. The former member who signed an undertaking must 

notify the Paying Authority of a marriage or re-marriage. 

NOTE The Paying Authority informs the employing department 

when they are told of a marriage or re-marriage. The employing 

department is responsible for: 

seeking repayment of the refund, plus interest. The calculation 

is set out in 5.11; and 

passing the repayment to the Paying Authority for 

appropriation-in-aid of the Civil Superannuation Vote. 

Table 1 Refunds of contributions paid in respect of service after 6 April 

1978 (men); 6 April 1988 (women) 

Condition 

Application 

Eligibility 

Member who left the PCSPS: 

without qualifying for a pension; or 

at age 60 or over; or 

under age 60 with the immediate payment of a PCSPS pension or an annual 

compensation payment. (NOTE A) 

Application 

Members (apart from those who left before qualifying for a pension) had to apply 

for the refund. 

Members who did not apply lost the right to a refund under these arrangements, 

but may have rights under subsequent arrangements (see below). 

Requirement 

to repay 

Members (apart from those who left without qualifying for a pension) were 

required to sign an undertaking to repay the refund if they married or remarried 

during retirement. (NOTE B) 

The method of calculating interest on contributions to be repaid by the former 

member is set out in 5.11. 

NOTE A Men under 60 who left between 6 April 1978 and 31 July 1984. Refunds were paid 

during this period only to men leaving with an ill health pension or an annual compensation 

payment. 

NOTE B This was to make sure that the PCSPS received back the contributions in respect of 

service on and after 6 April 1978 (men); 6 April 1988 (women) when a post-retirement widow’s or 

widower’s pension became payable. When the member married or remarried during retirement 

the refund could not be paid again to the member even when the husband or wife died before the 

member. 



Table 2 Calculation of refund 

Factor 

Calculation 

Contributions by members who had not qualified for an 

award 

Interest paid to 

the last day of 

service. 

Interest at 4% 

(compound) 

added to 

contributions to 

be refunded 

Members who 

qualified for an 

award 

Contributions in respect of 

service before 6 April 1978 

(men); 6 April 1988 (women) 

Interest paid to 

the last day of 

service. 

Contributions in respect of 

service paid on or after 6 April 

1978 (men); 6 April 1988 

(women) 

Interest paid to a 

date 6 weeks 

after the last day 

of service. 

Income tax 

Member left the 

PCSPS 1 June 1988 

to 30 November 

1989 

Member left the 

PCSPS before 

1 June 1988 

Income tax at 20% was normally deducted from the 

refund (contributions plus interest). 

The exceptions are given in table 3. 

Income tax at 10% was normally deducted from the 

refund (contributions plus interest). 

The exceptions are given in table 3. 

NOTE A Unmarried civil servants who left the PCSPS before 6 April 1978 received an automatic 

refund of contributions as soon as possible after the last day of service. Interest at the rate of 

3% was added. 

NOTE B Reserved rights to pre-1 December 1989 arrangements. (The member must have left 

before 1 December 1991.) An interest rate of 4% is used throughout the calculation in respect of 

contributions paid to cover service from 6 April 1978 (men); 6 April 1988 (women). (5.9) 

Table 3 Circumstances when no reduction was made for income tax 

Circumstances 

Contributions which were originally 

paid before 6 April 1973. 

Income tax deducted 

No reduction was made for income tax on either the 

contributions or the interest paid on the refund. This was 

because such contributions were not given tax relief. 

Members with more than 75% of 

service in an overseas country. 

No reduction was made for income tax. 

Enhancement of service. 

No reduction was made at Service for income tax as the 

lump sum received only limited tax relief. 

Following the death of the member 

or former member. 

No reduction was made for income tax when the refund 

was paid to a personal representative. 


Refunds: 5.10 


Unmarried members who did not receive a refund 

5.10.4 Under the refund arrangements before 1 December 1989, the 

following members were not entitled to a refund of contributions in 

respect of service from 6 April 1978 (men); 6 April 1988 (women): 

members who left the PCSPS with a preserved award; 

members who were retired early on redundancy (between 

6 April 1978 and 31 July 1984), and: 

- were over 55 and in a non-mobile grade; and 

- opted for the immediate payment of preserved benefits; 

members who were retired early for inefficiency (between 

6 April 1978 and 31 July 1984), and: 

- were over 55; and 

- opted for the immediate payment of preserved benefits; 

members who retired voluntarily under a scheme of 

voluntary early retirement (between 6 April 1978 and 31 July 

1984). 

5.10.5 These members may be eligible for a refund under the refund 

arrangements which now operate. To qualify the member must: 

have left the PCSPS before 1 December 1989; 

have been unmarried on leaving the PCSPS; and 

have remained unmarried until reaching age 60. 

5.10.6 Before 1 December 1989, members who were eligible for a 

refund of contributions were required to apply for it. A refund is 

payable (under the arrangements which now operate) to any member 

who did not apply to receive one under the previous arrangements. 

The refund is not payable until the person reaches age 60. 

NOTE The Paying Authority advises former members who have left 

the PCSPS with a preserved pension as follows: 

when the preserved award comes into payment at age 60. The 

Paying Authority explains the new arrangements when the former 

member reaches the retiring age and applies for benefits; 

when a preserved award is in payment before the 60 th birthday. 

The Paying Authority contacts the former member and explains the 

new arrangements when the former member reaches age 60. 



The Paying Authority passes details of those who are eligible to the 

awarding authority so that they can be considered as 

unmarriedmembers who retire before age 60 ( see 5.2). 

5.10.7 Table 4 gives the interest rates and the interest period 

applicable to contributions refunds where a former member who has 

qualified for a pension now reaches age 60 and takes a refund under 

the current arrangements. 

Table 4 Last day of service 6 April 1978/88 to 30 November 1989 

Circumstances Interest calculated up to: Rate of interest 

Immediate payment of benefits. Last day of service. 4% 

Immediate payment of benefit. 

Members were eligible for a refund 

under pre-1 December 1989 

arrangements but did not take it. 

(NOTE A) 

Preserved award 

(contributions paid for service from 

6 April 1978/88). (NOTE A) 

Last day of the month in 

which the awarding 

department receives the 

application. 

6 weeks after 60 th birthday. 

(NOTE B) 

4% to last day of service; 

5 % after last day of 

service to 

31 March 1990; 

BS from 1 April 1990. 

NOTE A 6 April 1978/88 means 6 April 1978 (for a man) and 6 April 1988 (for a woman). 

NOTE B Members who were unmarried for all or part of their service before 6 April 1978/88 will 

have received a refund for contributions in respect of that service at the time they left the 

PCSPS, with interest at 4% applied to the last day of service. 

NOTE C Where a pension was already in payment to a former member who was aged 60 or 

over at the time the revised refund arrangements were introduced on 1 December 1989, the 

interest was calculated up to the last day of the month in which the awarding department 

received the refund application. Such former members were invited to apply for a refund as part 

of a special exercise. 

NOTE D When the member had not qualified for a pension, interest at the rate of 4% was added 

up to the last day of service. A refund was not payable when the member had applied to transfer 

accrued pension benefits out of the PCSPS. 



5.11 Repaying a refund 

When refunds must be repaid 

5.11.1 Refunds of contributions must be repaid by certain former 

members in the following circumstances: 

on marriage or entering into a civil partnership; or 

on asking for a transfer value payment (5.2); or 

on rejoining the PCSPS after a short break. 

Repaying a refund on marriage or civil partnership 

5.11.2 This applies to former members who signed an undertaking to 

repay their refund of contributions on marriage or remarriage and this 

also applies to former members entering into a civil partnership. 

5.11.3 An undertaking to repay the refund of contributions (on 

marriage or remarriage) was made by unmarried members who: 

left the PCSPS between 6 April 1978 (men); 6 April 1988 

(women) and 1 December 1989 (5.10); or 

exercised the reserved right to the pre-1 December 1989 

terms before 30 November 1991 (5.9). 

This also applies to members entering civil partnerships as 

from 5 December 2005. 

5.11.4 The calculation is explained in Annex A. 


Refunds: 5.11 


Repaying a refund on asking for a transfer value 

5.11.5 No spouse’s or civil partner’s pension contributions are 

refunded when a member applies for a transfer value to be paid to 

another scheme when leaving the PCSPS. 

NOTE This is because provision for the spouse’s or civil partner’s 

pension is included in the transfer value. 

5.11.6 When a member asks for a transfer value payment to be made 

after a refund has been paid, the member has the option of: 

repaying the refund with interest; or 

retaining the refund. In this case a deduction is made from 

the retirement lump sum before the transfer value is 

calculated. 

5.11.7 The calculation is explained in Annex A. 

Further 

information 

Transfer values. 

Information 

Reference 

Pensions Manual 

Transfers from the PCSPS: 4.4 Annex B 

Repaying a refund on re-employment after a short 

break 

5.11.8 The refund must be repaid when a former member re-joins the 

PCSPS on re-employment in the Civil Service after a break not 

exceeding 6 months (or pregnancy/confinement terms). 

NOTE This does not apply to members who left the PCSPS 

between 6 April 1975 and 5 April 1978. 

5.11.9 Repayment (without interest) must be made: 

by the payment of a single lump sum within 3 months of the 

start of re-employment. A decision to repay by lump sum 

must be taken before or immediately on re-employment; or 

by deduction from pay of equal instalments over a period of 

no longer than 5 months starting from the date of reemployment. 



Further 

information 

Information 

Compulsory aggregation: Members who left 

between 6 April 1975 and 5 April 1978. 

Reference 

Pensions Manual 

Service & Pay: 6.2 Annex A 

Action by departments 

5.11.10 Employing departments are responsible for: 

calculating the amounts to be repaid to the PCSPS; and 

seeking repayment from the former member. 

5.11.11 Repayments must be passed to the Paying Authority for 

appropriation-in-aid of the Civil Superannuation Vote. 




Table 2 Compound interest calculation 

Period 

Amount 

£ 

Interest (Note A) 

£ 

Total 

£ 

11.2.90 - 31.3.90 

(49 days) 

2560 17.18 (5% x 49) 

(365) 

2577.18 

1.4.90 - 31.3.91 2577.18 159.79 6.2% 2736.97 

1.4.91 - 30.9.91 

(183 days) 

2736.97 90.57 (6.6% x 183) 

(365) 

2827.54 

total interest 267.54 

NOTE A Compound interest rates 5% to 31.3.90 

Annual BS rate (table 3) from 1.4.1990 

Table 3 † 

Year 

Annual BS rate 

Interest rate 

% 

1990-91 

1991-92 

1992-93 

1993-94 

1994-95 

1995-96 

1996-97 

1997-98 

1998-99 

1999-00 

2000-01 

2001-02 

2002-03 

2003-04 

2004-05 

2005-06 

2006-07 

2007-08 

2008-09 

2009-10 

2010-11 

2011-12 

2012-13 

2013-14 

6.20 

6.60 

3.35 

1.50 

0.66 

4.04 

4.17 

3.58 

4.34 

5.03 

3.93 

4.36 

3.75 

2.95 

2.68 

3.21 

3.39 

3.34 

3.91 

3.13 

0.94 

1.03 

1.18 

1.19 

_______________________ 

† 

Reproduced in 5.6

refunding - The Civil Service

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