Opting out of police pension (with reasons)

xylophone

I will probably opt out of Care scheme though.

And lose the employer contribution?

Do you have a wife and children? Your pension protects them in the event of your death in service.

You can simply leave it deferred and pay into your new employer's pension scheme when you leave?

atush

That is what I would do.

ed67812

And lose the employer contribution?

Isn't employer contribution a bit of smokes and mirrors in a defined benefit scheme? There is no pension pot with my name on it.

You can simply leave it deferred and pay into your new employer's pension scheme when you leave?

But transfers into defined contribution schemes from public defined benefit schemes will not longer be allowed.

atush

no, it isn't smoke and mirrors, it is COLD HARD CASH- yours and ours as taxpayers. Whatever your % paid in is, it will be far below the 25-30% requried to make up the benefits of a FS/PS pension incl death in service.

TBH, you have been given the actual facts and advice pertinent to you.
And you are resistant to the logic behind it.

Resistance to logic (to my mind as a scientist) is the sign of a closed mind who has already decided their course?

ed67812

no, it isn't smoke and mirrors, it is COLD HARD CASH- yours and ours as taxpayers. Whatever your % paid in is, it will be far below the 25-30% requried to make up the benefits of a FS/PS pension incl death in service.

TBH, you have been given the actual facts and advice pertinent to you.
And you are resistant to the logic behind it.

Resistance to logic (to my mind as a scientist) is the sign of a closed mind who has already decided their course?

Perhaps smoke and mirrors isn't the right term, but it is not cold hard cash. It is cold hard cash for somebody who intends to complete a full service.
Their pension is employee contribution of 13.44% and the annual pension is accrued at 1/55.33 of annual salary. Therefore if I earn £35000, I pay out £4704 (including tax relief) to accrue an annual salary of approx. £633.
This is then uprooted by CPI+1.25% and so if (for ease of this) CPI were zero then that £633 would be worth £930 in 31 years’ time when I am due to retire.
However, if I leave the job as planned, then that £633 would only be increased by CPI and still only be worth £633. Also, having left the scheme the deferred pension would be only payable at state retirement age.

So, the two outcomes are;
Annual pension of £930 in 31 years time. (remaining in job)
Annual pension of £633 in 37+ years time. (leaving job)

Couple to this the fact that as of April 1st, transfers out from public sector pensions are not possible, then to say that anybody who is going to be leaving the job is getting the full benefit of employer contributions doesn’t seem right.

Don’t get me wrong, I appreciate how good (relative to the rest of the world but not relative to the old schemes) the new police scheme is. I also appreciate the value that they represent for those completing a full service, but I’m not sure that they represent such amazing value for those of us who plan on leaving. Particularly when that £4704 does a lot for a young family.

atush

a 4704 contribution cannot buy a pension of 633 per annum in the real world, certainly not an indexed one with spousal pension. It buys a level pension (not increasing at all and w/o spousal pension) of 282 pounds.

and instead of 13.4%, you'd need to put in at least 25% into a DC pension.

but dont let maths get in the way, your mind is clearly made up?

ed67812

But if I put that £4704 on a horse and it wins.......yeah, you're right, there is no sense in opting out before I leave the job. Thanks for all the input.

xylophone

But transfers into defined contribution schemes from public defined benefit schemes will not longer be allowed.

I said "leave it deferred" (ie leave your CARE pension deferred, just like the 2006) and pay into a scheme with your new employer.

but I’m not sure that they represent such amazing value for those of us who plan on leaving. Particularly when that £4704 does a lot for a young family.

Your pension protects your young family.
"I wanna tell you a story" as the late Max Bygraves used to say.

A certain young father ( an environmental health officer) went out on call one night- there was a freak accident - a bollard ended up through his car window.

He left a widow and toddler and infant daughters - mercifully he had not opted out of his DB pension scheme.....