Civil servant? Don't let them steal your pension!

simonm_3

With the Civil Service about to reduce numbers, its likely that this will be partly accomplished through early retirement along with incentives.

My wife was offered this and despite a great deal of email exchanges with the organisers to nail down the benefits, confirm the salary used in calculating everything, it all went wrong and she has effectively been forced into retirement with a pension that is a fraction of that which she had accumulated over 18 years service.

We are still 'negotiating' prior to going to court and so I will avoid giving too much real info to avoid prejudicing her position, however the following might help others avoid having the civil service steal their pension from them.

After taking a period off to raise kids she returned to work, a very different organisation to the one that she had left so rather than start again looked at the FERS (Flexible Early Retirement Scheme ) that was offered. This involves applying, being accepted, getting an estimate based on time served and final salary.

Being what might be a relatively special case having been on unpaid leave we went to the n'th degree with a whole series of emails checking on everything, from salary used to what benefits would be indexed linked. It had been confirmed that best salary in last 3 years would be used and the estimate of benefits bore this out.

Here's the evil bit. You've gone through the whole process, got an estimate which is just about acceptable (she's a bottom level civil servant so we're not talking the salaries that hit the headlines), accepted it and are told agree to the retirement and we will confirm the final figures.

Then a whole series of emails asking for the final figure before confirmation, No! You must sign before we tell you. Can you believe this from our civil service!

Yes it was a scam, based on the estimate she accepted retirement, a week later the final figures came through and were a small fraction of the estimate. Basically she had lost her pension and the incentives to retire early were also knocked down to about 1/3rd of the promised amount.

I immediately went back to them asking what was going on! All we have had back is that she agreed to retire and should be thankful for what she's got! They insist that the final figures are correct and that the estimate was correct????, and that it was her decision to retire!

So surely if she never had a valid estimate she didn't retire? I have no doubt that we will have to fight this - as we will - every step of the way.

This is the thing to watch for.

Where do I think it has all gone wrong? I think the estimate was correctly based on the best of her last 3 years in service. The figures seem to add up to this. These figures were also constantly confirmed running up to the retirement date as the correct figures to use.

On retirement they appear to have changed the calculation to the best of the most recent 3 years! She had just returned to work so of course had very little income for them to work with, thus they were able to wipe out her pension! Sick isn't it. They even had the spite to say it was her fault!

And something else to take care of

What also to watch for? If you have been employed full time for many years, don't go part time. After a small number of years the final salary figure on which they base your pension could make it worthless.

What we are doing.

1st step was union - PCS - as she has been a member all her working life. Apart from being totally indifferent, the rep even said you should be happy with what you've got, we've got nowhere.

Spoke to a friend who is a solicitor, "No problem, got an employment law specialist" After 10 minutes on the phone it was clear I had more knowledge than she did, when she mentioned £500 for a discussion and even then said we would need a barrister at £1,000s to tell them what to do - so why claim to be an employment law expert? No, been down the lawyer route before, loads of money for nothing!

Its not ACAS as its pension, but it might be as its constructive dismisal but then again - see a lawyer they said

Pensions Advisory Service, fantastic so far. They even had a description of part of a our problem on their website, said to try one more letter detailing the problem, we are, failing that send them details and they would get on with it.

We've also written to our MP who comes across as very effective and the head of the particular part of the Civil Service's HR section.

The upshot of all this is, even if you work for the most apparently honest and rule bound organisation on earth, if they get it wrong, despite confirming everything is correct, its your fault!

With regard to civil service pensions, with no apparent change in years, status and pay she has had 4 different quotations as to what she will retire on (which is why we took so long analysing the etsimate dpension and benefits) . It is a total mess!

And if you suffer, its your fault!

Goldenyears

This is an obscure area even for a retired civil servant of long service like me. There should be a (on-line) scheme guide that interprets the rules. Which guide is it exactly and how does your wife's treatment deviate from it ? How old is she and which scheme was she in - classic, classic plus, premium etc ?

bigfreddiel

Hi,

You said in your post:

"On retirement they appear to have changed the calculation to the best of the most recent 3 years! She had just returned to work so of course had very little income for them to work with, thus they were able to wipe out her pension! Sick isn't it. They even had the spite to say it was her fault!
"

Well if your wife was in the Classic sheme, that is absolutely correct. So can you tell which scheme she was in please.

Also was she working fulltime or partime, not that that matters but if you don't factor that in correctly you will get the wrong answer. Again its quite simple, for example if you work for 10 years in a job-share with one other person, you quite obviously have only woerked for 5 years not 10, or whatever the ratio is. So thats not too complicated, just go through your figures again and se if it makes sense, if not psot them here - loads of us can help.

Also if taking early retirement, even just a few years can havea huge affect, your wife may have been better to just exit the scheme and leave all her pension contributions till normal retirement age at 60., doing that it will still increase each year by cpi and as civil servant are having a pay freeze for teo yeasr her salary won't increase, just hear years of service (probably not relevant in her cae) but each year of service is 1/80ths of you salary as a pension per annum.

So if you earn £20,000 per annum you get £20,000/80 pension i.e. £250 plus £750 lump sum (3 x £250)

The othwer civil service schemes, are based on 1/60th, but of course you contrinute more.

Cheers fj

simonm_3

Hi I'll read the comments again, but for info its the premium scheme. Years built up are 17 all full time working.

NB. The estimate, under FERS, - which they repeatedly said was the correct calculation - was based on 17 years full time, based on final salary best of the last 3 years working. The final figures appear to be best of most recent 3 years when of course she was on unpaid leave apart from 2 months!

themull1

Not all civil servants are having a pay freeze, just ones on over £21000. Was her first period of service before she left preserved? so she wouldn't get it until she was 60?

mjm3346

What also to watch for? If you have been employed full time for many years, don't go part time. After a small number of years the final salary figure on which they base your pension could make it worthless.

Should make no difference, the FTE is used for the earnings part of the calculation, it is the length of service that is adjusted (if someone works half time then they only earn 6 months service for each year worked but the salary used would be the same as a full time one).

Stargazer57

simonm

I understand you want to leave the correct figures out of your post if you are still taking action, but you'll have a better chance of getting sensible responses if you do put some flesh on what is otherwise a bare post.
Is the issue that you are wanting the 18 years of pension to be calculated based on the salary earned in the 2 months since the career break whereas they are actually offering one based, mostly or entirely, on the salary before the break was taken?
You describe the break as unpaid leave, but don't say how long it lasted. I suspect if you did say you might get a different answer, because most people wouldn't expect a pension calculated a few months after a lengthy career break to be based on the salary earned in the last two months.

simonm_3

Basically the FERS offer is: This is our estimate of what your benefits and pension will be if you agree to retire. These are calculated based on in our case 17 and a bit years at final salary prior to career break. On agreeing that they were satisfactory, the final figures came through after the point of being retired. These were about 1/3rd of the stated 'estimate'. The final figures appear to be based on a short period worked at a higher salary. 2 months at £30K is a lot less than a full year at £20K

As to teh other poster saying that part time has no impact on accumulated pension, take great care, it can and does. If your pension is based on the best of the last three years...

mjm3346

simonm wrote: »

As to teh other poster saying that part time has no impact on accumulated pension, take great care, it can and does. If your pension is based on the best of the last three years...

No it does not (if it has then it is wrong)

example

10 years full time at 20k followed by 10 years full time at 30K.
Pension will be calculated on 20 years service @ 30k

10 years full time at 20k followed by 10 years part time (50% hours) at 30k FTE (actual pay received will be pro-rata so 15k)
Pension will be calculated on 15 years service (the full time equivalent of 10 + 10 @ 50%) but still at 30k.

mjm3346

premium scheme

I don't have the scheme to hand but I am pretty sure countback on premium is 10 years not 3 (classic)

Thanks will-in-estoril this is the bit

your highest average pensionable earnings in any period of three

complete scheme years during the last 13 years ending on your last day of service.

mjm3346

For someone on the scale maximum the longer countback can often be of benefit. The salary is index linked for the pension calculation and it almost always increases by more than the scale maximum does.

(difference will not be as large with the CPI increases)