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    • Doubtful
    • By Doubtful 1st Dec 17, 2:01 PM
    • 156Posts
    • 397Thanks
    Doubtful
    Civil Service Pension Alpha or Partnership?
    • #1
    • 1st Dec 17, 2:01 PM
    Civil Service Pension Alpha or Partnership? 1st Dec 17 at 2:01 PM
    Hi, I've just joined the Civil Service at 56 years of age. I am already receiving a pension and wondered whether to opt for the Partnership pension from the civil service, rather than the Alpha pension? I intend to work until I am 65. From the info I received I wouldn't be able to claim a pension from the alpha scheme until my normal state pension age which is currently 67. I can also contribute somewhere between 30 to 50% of my salary to the Partnership pension. Is it worth me doing that or would I be better to opt for the Alpha pension?
Page 1
    • marlot
    • By marlot 1st Dec 17, 2:38 PM
    • 3,134 Posts
    • 2,275 Thanks
    marlot
    • #2
    • 1st Dec 17, 2:38 PM
    • #2
    • 1st Dec 17, 2:38 PM
    You can buy an EPA, which allows you to take Alpha a couple of years early.
    • Doubtful
    • By Doubtful 1st Dec 17, 2:49 PM
    • 156 Posts
    • 397 Thanks
    Doubtful
    • #3
    • 1st Dec 17, 2:49 PM
    • #3
    • 1st Dec 17, 2:49 PM
    so Alpha pension with EPA or Alpha pension with EPA and also join the Partnership pension? It looks like I am being asked to choose between them, but I have read on this forum that people are in both?
    Last edited by Doubtful; 01-12-2017 at 2:51 PM. Reason: spelliing
    • BoGoF
    • By BoGoF 1st Dec 17, 2:51 PM
    • 2,722 Posts
    • 1,960 Thanks
    BoGoF
    • #4
    • 1st Dec 17, 2:51 PM
    • #4
    • 1st Dec 17, 2:51 PM
    To the best of my knowledge you cant be in both at the same time.
    • Kynthia
    • By Kynthia 2nd Dec 17, 10:00 AM
    • 5,042 Posts
    • 7,022 Thanks
    Kynthia
    • #5
    • 2nd Dec 17, 10:00 AM
    • #5
    • 2nd Dec 17, 10:00 AM
    Do you have any existing DB pensions? If not then 9 years worth of Alpha could be good diversification to your portfolio. It would be the stable bit tgat wouldn't be affected by stock market drops, wouldn't deplete your capital, would never run out even if you or your partner lived much longer than expected, wouldn't need any work or planning should finances become "confusing" to you when much older, etc.

    You could always contribute to a private pension in addition to your workplace one if you can afford to. You could use what you save to fund the gap between 65 and when Alpha kicks in if you wanted to.
    Don't listen to me, I'm no expert!
    • taking stock
    • By taking stock 2nd Dec 17, 6:58 PM
    • 144 Posts
    • 173 Thanks
    taking stock
    • #6
    • 2nd Dec 17, 6:58 PM
    • #6
    • 2nd Dec 17, 6:58 PM
    you cannot be in both.
    alpha can be taken any time from age 55, although actuarially reduced, eg 54.3% for an age-67 preserved pension taken at age 55.
    The older you get, the far superior the benefits in alpha become. this is why they increase partnership contributions with age. For a 20-year old, partnership wins, for someone in their 50s, alpha wins hands down. as a very rough example, compare someone aged 66 on £43k and alpha gets 43rds accrual, ie £1k earned p.a. that same person in partnership would get ~£8600 (at 14.75% contribution plus 3% matched contribution). most people would consider £1k pa for superior to £8600. For anyone under that age, you take into account the discount rate (ie what it would've increased at, for investment return), but still works out better.
    • Turned out nice.
    • By Turned out nice. 3rd Dec 17, 6:27 PM
    • 7 Posts
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    Turned out nice.
    • #7
    • 3rd Dec 17, 6:27 PM
    • #7
    • 3rd Dec 17, 6:27 PM
    Evening taking stock, I am being moved over to the Alpha in February after 37.5 years of classic. Is it worth considering a partnership pension at all as I would hope to retire after about 9 years when I'm 63 so a deduction of around 20% on the Alpha pension.

    I was thinking of just the 14.75% contribution so approximately £120 not being deducted each month on current earnings or is this the wrong way to think about it?

    Many thanks.
    • taking stock
    • By taking stock 3rd Dec 17, 6:40 PM
    • 144 Posts
    • 173 Thanks
    taking stock
    • #8
    • 3rd Dec 17, 6:40 PM
    • #8
    • 3rd Dec 17, 6:40 PM
    well I don't know your personal circumstances, but IF you were going to take partnership, it would be in your best interest to at least contribute 3% to get the matching 3%, ie total 20.75% of salary for just a 3% contribution.
    Technically, the alpha still works out better, but given that you've already got almost half of your final salary from the Classic, it depends on whether you'd like a bigger lump sum (remember 3xpension is already included as a lump sum in classic). If you were thinking of cashing in some of the annual pension for a lump sum, then I would say DON'T (terrible 12:1 government rate) and instead do Partnership (with 3% matched) to fund the lump sum.
    • sammyjammy
    • By sammyjammy 3rd Dec 17, 6:51 PM
    • 4,236 Posts
    • 4,585 Thanks
    sammyjammy
    • #9
    • 3rd Dec 17, 6:51 PM
    • #9
    • 3rd Dec 17, 6:51 PM
    Evening taking stock, I am being moved over to the Alpha in February after 37.5 years of classic. Is it worth considering a partnership pension at all as I would hope to retire after about 9 years when I'm 63 so a deduction of around 20% on the Alpha pension.

    I was thinking of just the 14.75% contribution so approximately £120 not being deducted each month on current earnings or is this the wrong way to think about it?

    Many thanks.
    Originally posted by Turned out nice.
    This doesn't sound right? Why are you only just being moved over? Who do you work for?
    "You've been reading SOS when it's just your clock reading 5:05 "
    • Turned out nice.
    • By Turned out nice. 3rd Dec 17, 7:44 PM
    • 7 Posts
    • 0 Thanks
    Turned out nice.
    I work for the MoD and due to my age my change over date is Feb 1st 2018. My workmate is staying on the classic by virtue of being just over 2 years older than myself, he will be on 40 years next August.

    Many thanks taking stock, plenty to think about but fortunately I have a good number of years in the classic.
    • Kynthia
    • By Kynthia 3rd Dec 17, 8:51 PM
    • 5,042 Posts
    • 7,022 Thanks
    Kynthia
    Evening taking stock, I am being moved over to the Alpha in February after 37.5 years of classic. Is it worth considering a partnership pension at all as I would hope to retire after about 9 years when I'm 63 so a deduction of around 20% on the Alpha pension.

    I was thinking of just the 14.75% contribution so approximately £120 not being deducted each month on current earnings or is this the wrong way to think about it?

    Many thanks.
    Originally posted by Turned out nice.
    Does moving to partnership break you final salary link? If it does, is that a good or bad thing in your circumstances? Just something else to think about amongst the other considerations.
    Don't listen to me, I'm no expert!
    • Turned out nice.
    • By Turned out nice. 3rd Dec 17, 9:04 PM
    • 7 Posts
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    Turned out nice.
    No my 37.5 years are banked as it were but the pension will be based on whatever my final salary is (best of the last 3years) when I decide to retire,so will start afresh next year on a new scheme.
    Last edited by Turned out nice.; 03-12-2017 at 9:26 PM. Reason: More information
    • Kynthia
    • By Kynthia 3rd Dec 17, 11:49 PM
    • 5,042 Posts
    • 7,022 Thanks
    Kynthia
    No my 37.5 years are banked as it were but the pension will be based on whatever my final salary is (best of the last 3years) when I decide to retire,so will start afresh next year on a new scheme.
    Originally posted by Turned out nice.
    If you moved to Partnership though, won't your Classic pension be calculated on your best year of pensionable pay in the last 3 years before leaving the DB scheme? Whereas if you move to Alpha you maintain the link between your salary and Classic pension so it will use your best salary in the last 3 years of employment.

    So has your full time equivalent salary been fairly consistent or increasing over the last 3 years and is that set to continue, were you previously on a better full time equivalent salary or do you anticipate your salary decreasing in the future?
    Don't listen to me, I'm no expert!
    • taking stock
    • By taking stock 4th Dec 17, 12:53 AM
    • 144 Posts
    • 173 Thanks
    taking stock
    worth noting - a crucial point that Kynthia is making - your Classic is based on the final salary when you finally leave service, not the final salary when you transition across. If you're anticipating any significant pay increase (ie more than CPI), then remaining in alpha makes even more sense.
    • Turned out nice.
    • By Turned out nice. 4th Dec 17, 4:29 PM
    • 7 Posts
    • 0 Thanks
    Turned out nice.
    Plenty to ask MyCSP next year as the Partnership schemes let you join in either April or October. As it's a Civil Service partnership and, how I read it I could transfer back into Alpha at anytime and also I haven't left my employment so understand that there has been no break in my continuous service.

    Don't see my wage changing too much in the next few years, it's been very consistent as most Government employees know all too well.

    Thanks for taking the time to answer.
    Last edited by Turned out nice.; 04-12-2017 at 4:54 PM.
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