CSP - no freedom at all

GunJack · 26 November 2017 at 7:02PM

OP - you made a choice 30 or whatever years ago....to work in the CS for probably a slightly lower salary but with probably one of the pest pensions going and amongst the best terms & conditions of employment going....

You should be very, very happy about that....I know I am for my 20 yrs CS career, would have stayed CS if they hadn't privatised most of my Department :mad:

..and you spent 25 years working for the public good..what's not to like about that??

xylophone · 26 November 2017 at 9:55PM

with probably one of the pest pensions

Specially for nuisances?:)

bigadaj · 26 November 2017 at 10:31PM

Mpb wrote: »

How is it a “civilised” society if some arbitrary decisions are just imposed? It’s honestly frightening that so many people are now soooo comfortable with being told what to do and how to live and what to think...

Depends how and in what respect you view things but people now have more freedom in many areas then ever before, and a significant proportion make a right hash of it.

bigadaj · 26 November 2017 at 10:43PM

Mpb wrote: »

It’s scary that so many have the attitude that nanny knows best. Whatever happened to being an adult and being able to make my own choices, whether good bad or indifferent? Whether it’s a “good” plan or not is irrelevant the issue is that people are being prevented from having any choice at all. The only choice we have is to just get on with it. What if the goalposts get moved again in future? With the attitudes shown on here it’s not out of the realms of possibility that that will happen. Maybe I’m
Just too libertarian and want to be responsible for my own choices now that I know more than I knew as a you person starting out in the working world.

Right let's try a bit more constructive and positive.

People will typically accrue a pension of any flavour by saving up money contributed by both themselves and their employer, in a tax advantaged way such that at some point in the future they retire and the income from that pension replaces the salary they used to live on.

Traditionally this was fulfilled by either a final salary pension or an annuity, only in the last few years have options like drawdown been available.

So given the above a guaranteed pension payment forms a fantastic underpin to retirement income. This gives the opprotunity of taking in more risk and consequently reward with other DC pensions and other investments such as isas, unwrapped, p2p, vct etc etc

The reason there has been a clamour for pension freedoms in the last few years is that low interest rates, qe and very low gilt yields have inflated transfer values hugely, so the jam today looks attractive. Whether it is remains to be seen, just look at the number of people who transferred out in the nineties and are clamouring for redress because it wasn't such a good deal. At that time higher interest rates and good stockmarket returns made transfers from db to DC arrangements look very attractive, as it turned out the boring db scheme worked out better and advisers frequently paid out large sums in compo, or at least their insurers did.

hugheskevi · 26 November 2017 at 11:05PM

The ban on transfers from unfunded public service pension schemes was announced at Budget 2014 on 19th March 2014. The ban applied from 6th April 2015, so there was over a year between the announcement and the ban starting, when members could transfer if desired.

For Civil Servants who started service after 2002, there has been and continues to be the option to join or switch to Partnership, a Defined Contribution alternative to the main Defined Benefit arrangements. The value of the Defined Benefit pension could be transferred to Partnership up until 6th April 2015. Partnership pensions can be transferred and use the pension flexibilities.

The transfer ban to flexible pension schemes only applies to unfunded public service pension schemes, the funded Local Government Pension Scheme still permits transfer out, as do the funded MP and Ministerial pension schemes. Transfers can be made to other Defined Benefit schemes, as JoeCrystal says above, the most practical way to do that would be via the LGPS.

The ban is not about paternalism, it is simply a cashflow issue - anyone transferring their pension from an unfunded scheme brings forward a future cash-flow obligation to current expenditure, which is very undesirable if you are trying to reduce a budget deficit (as the future cashflow obligations are not part of the national debt). The pension liabilities of the unfunded NHS scheme alone are over £500bn - even if only a very small percentage transfer out to take advantage of the pension flexibilities that is very sizable hole created in the UK Budget as future liabilities are brought forward (whether the current national accounting methods for unfunded pensions are the most appropriate and sensible is another matter).

Kynthia · 26 November 2017 at 11:16PM

When you joined 30 years ago you were promised a DB pension from age 60 for life, with a portion after your death for your spouses life, as well as other benefits should you die young. For all of this you only had to pay 1.5% of your salary just to fund the widows bit, and you would even get this back if you never married. You are getting exactly what you were promised, which is much better than most people can hope to get now. So coming here and complaining about getting what you signed up for, and for which you paid very little towards, isn't going to get you any sympathy.

As someone has said, you could get a job with an employer who uses the local government pension scheme, transfer in your csp, then leave and transfer out your whole pension to a DC scheme. However tgats the only way of getting a pot of money for your csp pension. No-one is saying you should do that or it's a good idea though.

BobQ · 26 November 2017 at 11:46PM

Mpb wrote: »

It might have been a good one at one point but I’m not confident that will be the case in future. I’d like to have the same “freedom” of other pension participants to move my pot to another scheme, to be able to choose. As it is there’s no choice at all.

What choice do you really want to exercise? It does not matter what happens in the future, your accrued pension when you left it will retain its value as it is guaranteed and index linked to inflation.

One of the reasons the Government can use to justify not providing this benefit to transfer your "pot" is that you do not have one. What you have is a promise to pay you the pension. Another is that it is unlikely that you can find a better pension with the guarantee it gives.

Mpb wrote: »

There are a couple of options tbh but I’m struck by the fundamental difference in attitude. When I joined nearly 30 yrs ago I was told I’d be paying pension contributions to MY pension pot - ie paying into my own scheme. Not paying to an IOU scheme. And for the rules for pensions to be changed to grant “freedom” for everyone else but not CSP is discriminatory really. I don’t want the government making decisions for me. I want to make my own decisions for my future pension arrangements the same as other pension customers.

Are you sure you joined the CS Pension Scheme? Nobody would have told you that you had a pension pot, then or now.

The Government is not making decisions for you. Inflation is defined in law. All the Government is doing is promising to pay your pension plus inflation since you left.

hyubh · 27 November 2017 at 12:00AM

BobQ wrote: »

One of the reasons the Government can use to justify not providing this benefit to transfer your "pot" is that you do not have one.

That goes for any DB scheme though - and doesn't explain why transfers to a DC arrangement from the PCSPS were possible until not so long ago. Put another way, while circumstances are obviously different, there is clearly a fundamental restriction on Darwin Award self-nominations from CSPS members compared to 3 let alone 30 years ago...

BobQ · 27 November 2017 at 12:06AM

Mpb wrote: »

Newby here, I’ve been lurking and having a good read. Nice to “meet” folks.
I’ve been working hard to start my own business but having to jump through myriad bureaucratic hoops and also contend with “its not what you know...”.. Anyway, I’ve been looking into rationalising my pension arrangements and with 25 yrs of CSP contributions I wanted to move them to another product. However pension freedom doesn’t apply to former civil service as we can’t move anything from the CSP Ponzi scheme. I’m infuriated that I can do nothing at all. I have no control right now and have to wait til I’m 55 to possibly have a chance to make any changes... As a rational adult I’m incensed st the patronising “nanny knows best” attitude. It’s my pension, I should be able to make decisions on what and how things are done with my money...

Instead of ranting about this try asking what you really want to know.

If you started work at 18 and expect to reach state pension age at at 66 you have up to 48 years to work. Of these 25 years will have earned you 5/8ths of your FS (plus inflation) paid at 60. plus a lump sum. Say that you want to retire at 60. What have you been doing to earn a pension in the other 15 years?

A reasonably sound retirement plan would be to keep your guaranteed CS pension and then build a further personal pension from contributions in the 15 years, taking some of the risks that you seem to want the freedom to take.

So why not tell us your plan rather that whine about the CS which has given you a firm basis on which to build?

jamesperrett · 27 November 2017 at 12:39AM

It would be worth finding out a few more facts before having a rant - if you've had 25 years service in the CS you'll be able to take a reduced pension at the age of 50 rather than 55.

CSP - no freedom at all

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free