Civil Service Pensions

Mozette

I am in the 'Classic' scheme, and as I'm knocking on a bit I get to stay in it until 1 Aug 2020. Reading the literature, I believe that if I leave the pension scheme entirely at that point, then when I do retire my pension will be based on my pay at 1 Aug 2020, but uprated by CPI each year, so when I do retire (in 2023) my pension will have gone up a bit.
I realise that I won't get the contracted out rate of NIC - if indeed it still exists by then - and lose my death in service for the final period (but I don't have any dependants, so it's of no concern).
This is obviously vs. going onto the new scheme, and getting a bit more pension that way, although getting less take-home in the meantime because of the contributions.

Am I correct in what I think? Obviously if I do start getting pay increases in the meantime I would have a rethink.

I would ask the scheme provider, but it's like getting blood out of a stone, I've asked them things before...

Thanks in anticipation.

OldBeanz

The last thing you will want to do is to come out of the CS pension scheme. Go into the new scheme when the time comes, otherwise you are working for 20% less for the 3 years. The only people to advise you otherwise are likely to have their tongue firmly in their cheek implying that you would be saving the general tax payer some money.

BoxerfanUK

Like OldBeanz I would say think very carefully before leaving the CSPS as you'll be hard pushed to get better, although bear in mind that in 2023 (I assume you will be 60 then) you will have to wait until age 66 to draw the benefits you've paid into the new scheme.

I too am in Classic, although slightly older than you so I remain in Classic without any tapering. I've also been doing lots of number crunching over the last few months as I'm sure many other CSPS members have, and I decided the best route for me was to take 'Formal Retirement', draw my pension & lump sum, and have been re-employed full time with the same employer in a lower grade at under half my salary with no break in service. I remain in Classic in my re-employed grade, and any inflationary pay increases to my new grade will not incur any additional pension abatement.

I guess I'm fortunate that I have 'Reserved Rights' and have taken 41/80 pension and lump sum having just turned 55. I still have another 4/80 (max pension is 45/80) that I can earn, but as I haven't had a pay rise since April 2010 I thought if I stayed on in my previous role for another 4 years my final pension would still likely be based on my 2010 pay as it's not looking like their are much if any pay rises on the horizon. I therefore felt it was better to take the bulk of my pension now, as at least I'll get 4 CPI increases to my pension over the next 4 years, and in 4 years time my last 4/80 will be calculated on my pre-retirement pay as opposed to my much lower re-employed pay. (I still have to pay pension contributions based on my pre-retirement pay for this to happen of course).

I would advise anyone approaching their last few years service to at least consider other options such as Formal (if you qualify) or Partial retirement. You don't necessarily have to go part-time, you can stay full time but move to a lower grade and together with your pension could be even better off as a consequence if you plan it correctly.

For me it's turned out to be a complete no brainer, I now have no more management responsibility in my new role, pay no NI on my pension, work 2 hours less per week (37 instead of 39) and actually got an indirect pay rise as well because my pensionable pay (salary of reference for abatement calculation) was £670 pa MORE than my 'actual' earned salary. I've had a very small amount of my pension abated as my new salary and pension still took me slightly over the limit (of salary of reference) but all in all I calculate that my net pension and newly re-employed net pay means I'd have had to have got a 13% pay rise in my old job to take home what I am now and I'd still have all the crap to deal with in my old job!!!!

So there are ways that you can 'beat' the system, and hopefully my post may give some others some food for thought.


Good luck.

Mozette

Thanks for your replies. Yes I am 60 in 2023, and I do want to retire then for definite. Not that I want to be morbid, but my family are not especially long lived, so I was thinking re leaving the pension along the 'bird in the hand' lines, that I may as well have the money in my pay as possibly not live to get it at 66/67. I would have 35/80 built up and I could live on what I would get plus my lump sum & saving my mortgage equivalent once that is paid off.

I think I need to give the matter more thought, and you've raised some options I wasn't aware of, so many thanks.

Thrugelmir

If you've got any savings. Then buy extra pension. I've just done that with a lump sum to be paid in April. Though you can ask either for a % of your salary or fixed sum to be paid in every month.

Considering the outlay. You can't buy an inflation linked pension anywhere else for the same cost.

Mozette

What would happen to my preserved benefits if I left Classic in Aug 2020, then rejoined the new scheme in October 2020?
Would my classic go up by CPI?

Tromking

Mozette wrote: »

What would happen to my preserved benefits if I left Classic in Aug 2020, then rejoined the new scheme in October 2020?
Would my classic go up by CPI?

Much talk about the above issue in my area of the civil service at the moment and I know its been mooted by a couple of posters on here as well.
I have lodged a question re. this with Mycsp and have yet to get an answer back.

Mozette

Tromking wrote: »

Much talk about the above issue in my area of the civil service at the moment and I know its been mooted by a couple of posters on here as well.
I have lodged a question re. this with Mycsp and have yet to get an answer back.

If you do get an answer - not always easy! - would you be ever so kind and post it on here.

Thanks,

BoxerfanUK

I may be wrong but I think that if you leave Classic you will then not be allowed to join the new scheme.

Tromking

BoxerfanUK wrote: »

I may be wrong but I think that if you leave Classic you will then not be allowed to join the new scheme.

It maybe semantics I know, but technically we`re not leaving Classic as much as being asked to opt in to the new Nuvos type scheme because Classic is being closed to us. I`m told the 'opt in' packs will be sent out just before the end of year, it would be nice to know the ramifications of a delayed opt in before then.

Tromking

Mozette wrote: »

If you do get an answer - not always easy! - would you be ever so kind and post it on here.
Thanks,

I`ve had a reply (complete with a dead hyperlink!) on my question re. a delayed opt-in to the new 2015 scheme, very helpful!:)

Good Morning

Thank you for your e mail relating to the above highlighted , However on behalf of MyCSP I must apologise, we cannot currently answer your questions.

Until MyCSP have been passed the finalised guidance by The Cabinet Office; we cannot fully answer your questions concerning what would happen to your pension after the proposed 2015 new scheme introduction.

Once we have been introduced to the rules, impact and governanceMyCSP will be in a position to answer your enquiries.

I have attached the link below for your attention.

http://www.civilservice.gov.uk/pensions/reform/key-elements