Civil Service Pension - no more lump sum, what to do?

kindofagilr

Ah well I wasnt here 5 months ago

Thanks for that, thought they might have been doing what the did with the SP one

HenryMungo

I wonder if anyone can help.

After comparing my pension projections from 2007 to 2008 I have noticed that both my lump sum and annual pension has dropped significantly, this is despite having another year in service and higher pensionable pay.
We have contacted the PPPA but havent recieved an answer.

This has affected many of my colleagues who are all long term civil servants on the classic scheme.

Any help appreciated.

Henry

MikeJones_2

Hi Henry,

I'm not familiar with the format of the annual pension projections for the Civil Service - but let's see if we can tease this one out between us.

We'll begin with: are the projections based upon your pension and lump up to a given date. e.g. this year's projection for example based upon your pensionable service and pensionable salary up to say, 1st January 2009 - effectively, the pension benefit that you have already accrued to date? (What I'm looking for here is confirmation of whether there is any forward projection between now and your Normal Retirement Date).

Mike


I work in the field of Pension Education and Pension Guidance in the UK. I am a member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

Middlestitch

http://www.pensionsadvisoryservice.org.uk/

Free, expert and impartial advice - well worth a look.

Helpline: 0845 601 2923

marklv

worrypants wrote: »

does the cahnge in the law apply to new civil servants?

I joined in 1980 and left in 2005 and i want to take my pension in 2011 when im 50

does this mean I now will have to wait until 55:mad:

hope not
any advice hugely appreciated

Well, it's tough sh*t! Most people have to work until 65 or even 70 these days, so count yourself lucky you can even retire at 55. :mad:

marklv

Browntoa wrote: »

this is a copy of the original first post in the thread...that may be lost ??

Hello,

I am 28 yrs old, female and have just joined the Civil Service 'Premium' pension scheme, which no longer offers a lump sum on completion, and works on 1/60 contributions. I have about 5yrs worth of my old NHS pension scheme stored. I have the following questions:

Should I transfer my NHS contributions in to my new civil service pension, which I understand I can do as part of the Public Sector Transfer Club (I am tempted to do this as I feel that the benefits of leaving a 5yr pension are few...?)

What can I do to save / plan to get a lump sum for retirement - what are the best schemes or plans in order to achieve a little nest egg for retirement - which to be honest I was looking forward to from when I was in the NHS - drat the Civil Service for moving the goal posts!

What can I do to top up my Civil Sevice Pension - as I have no intention of working until I am 60 (or even 65 as it looks like it is going to be, yuk), and want a decent pension on which to retire.

Any advice would be most gratefully received,

Luis.

You are fortunate in your retirement age being only 60 as new joiners now have a retirement age of 65. Even if in 2013 you are forced on to the age 65 retirement it's only what most people will be retiring at anyway. Retiring early carries very heavy penalties (actual reductions) unless you manage to get on an 'approved' early retirement programme which the civil service offers from time to time, to reduce headcount. Chances are that you will probably be offered at least one such opportunity from age 55.

The move to a career average scheme is fairer and still offers a generous payout. 2.3% of your salary for every year of service gives you 75% of your average salary (index linked) after 40 years of service - the 75% is the maximum the scheme will pay regardless of length of membership. So what are you complaining about? I can't think of a better pension scheme than this one other than the military one and the police one.

Lumber_Joe

Good one


_______

marklv

I edited and corrected an earlier statement I made. The Nuvos scheme pays 2.3% of your salary each year for every year of service, but the cap is at 75% of average salary, so for instance, 40 years of service cannot give 92% of average salary as a pension. I presume that once you have reached the maximum level of benefits under the scheme (after 32.6 years of membership) you no longer need to be a contributing member and the benefits are preserved with inflation proofing until age 65.

It's a very good scheme; the only drawback I can see is if you wish to retire early, as the actuarial reduction can be very high if you opt to take the pension more than two years before age 65. That being said, many civil servants manage to obtain 'approved early retirement' from their employing department if it is deemed that their departure would improve efficiency (i.e. reduce overheads without negatively affecting productivity). This 'approved' form of early retirement allows employees to take the full pension benefits accumulated up to that point without the actuarial reduction. There are rumours that the Conservatives wish to curtail or even stop this practice if and when they come to power.

MattS

HenryMungo wrote: »

I wonder if anyone can help.

After comparing my pension projections from 2007 to 2008 I have noticed that both my lump sum and annual pension has dropped significantly, this is despite having another year in service and higher pensionable pay.
We have contacted the PPPA but havent recieved an answer.

This has affected many of my colleagues who are all long term civil servants on the classic scheme.

Any help appreciated.

Henry

(I'm not an IFA, so don't take this as gospel) I suspect that this is because the scheme is based on average salary. Previously they were probably assuming that there would be decent rises each year going forward, but with the current economic climate they're probably being rather more pessimistic.

Wannabedebtfree

I've just been looking on the civil service link and on one of them schemes

Your pensionable earnings are £20,000, and your reckonable
service is 30 years.
Pension = (£20,000 x 30) /80 = £7,500 a year or £625 a
month before deductions.

Mohammed leaves premium after 20 years’ reckonable service. His final pensionable earnings are £18,000 a year.
Mohammed’s premium pension = 1/60 x 20 x £18,000 =£6,000 a year

I thought they were meant to be good.....