Public Sector Pension Reform In Trouble?

drummersdale

• the government is today announcing that the pause of the cost control mechanism, which was implemented in 2019, will be lifted.

• When the (cost control) mechanism was established, it was agreed that it would consider ‘member costs’: i.e. costs that affect the value of schemes to members. As the proposals in the consultation published today will increase the value of schemes to members, this falls into the ‘member cost’ category. As a ‘member cost’, this will be considered as part of the completion of the cost control element of the 2016 valuations process. 

Is this part about the contributions - the 2% "extra" the PCS union reckon members have been overpaying - or have I completely misunderstood - if it is then my reading of this is "don't expect any form of refund"...
I suspect I am wildly adrift of the facts...

german_keeper

I don't think it is just the Union, all parties have accepted that under the goalposts that were set we have been overpaying by 2%. I say goalposts as I also interpret this as meaning they will be moved. 

drummersdale

german_keeper said:

I don't think it is just the Union, all parties have accepted that under the goalposts that were set we have been overpaying by 2%. I say goalposts as I also interpret this as meaning they will be moved. 

So effectively it means go whistle for overpayment or by all means have it back and we will just make a tweak elsewhere to recoup.  I am one of the “tapered” people - was on Classic moved onto Alpha last month so if I’ve read correctly I may be given the opportunity to stay in Classic up to March 22 - which helpfully is when I was looking to retire....

german_keeper

drummersdale said:

german_keeper said:

I don't think it is just the Union, all parties have accepted that under the goalposts that were set we have been overpaying by 2%. I say goalposts as I also interpret this as meaning they will be moved. 

So effectively it means go whistle for overpayment or by all means have it back and we will just make a tweak elsewhere to recoup.  I am one of the “tapered” people - was on Classic moved onto Alpha last month so if I’ve read correctly I may be given the opportunity to stay in Classic up to March 22 - which helpfully is when I was looking to retire....

If I'm honest I don't really have an issue with the 2% contribution thing. Based on the amount we contribute our pensions are still very generous. So if I could actually understand this revaluation process I would probably accept that it is flawed to suggest that we are paying too much.

My issue is that we pay anything at all, apart from the old 1.5% widows and orphans. It was clearly documented that our salaries were adjusted to take account of the generous non contributory pension scheme. Deferred salary and all that. Dons tin hat and waits for the usual flak!    

DustyBlues

I was in a relevant public service pension scheme before 31 March 2012 and was transferred to Alpha on 1 April 2015. I did not qualify for transition. If I were to opt to return to Classic for the period between 1 April 2015 and 31 March 2022, and applied for IHR before 31 March 2022, would that mean I would be assessed under the Classic terms i.e. incapable of doing my current job up to the age of 60? Or would I still be assessed on Alpha terms i.e. the two-tier system, so effectively being deemed capable of doing any equivalent job - even in a different govt dept - until my retirement age which is 67? Any thoughts please as been struggling to continue in work for several years with incurable medical condition but know this could expedite what is an inevitable early departure.

drummersdale

german_keeper said:

drummersdale said:

german_keeper said:

I don't think it is just the Union, all parties have accepted that under the goalposts that were set we have been overpaying by 2%. I say goalposts as I also interpret this as meaning they will be moved. 

So effectively it means go whistle for overpayment or by all means have it back and we will just make a tweak elsewhere to recoup.  I am one of the “tapered” people - was on Classic moved onto Alpha last month so if I’ve read correctly I may be given the opportunity to stay in Classic up to March 22 - which helpfully is when I was looking to retire....

If I'm honest I don't really have an issue with the 2% contribution thing. Based on the amount we contribute our pensions are still very generous. So if I could actually understand this revaluation process I would probably accept that it is flawed to suggest that we are paying too much.

My issue is that we pay anything at all, apart from the old 1.5% widows and orphans. It was clearly documented that our salaries were adjusted to take account of the generous non contributory pension scheme. Deferred salary and all that. Dons tin hat and waits for the usual flak!    

Controversial as often mention of CS pension contributions on this forum can be like a red rag to a bull. Suffice to say I’m hoping someone comes up with a nice handy calculator to help the decision making process although I’m so close to 60 I suspect Classic will be my choice if offered. 

nigelbb

hugheskevi said:

nigelbb said:

I'm one of those affected as I was in the NHS 2008 scheme briefly as I started working in the NHS in 2014 at age 60 & was moved to the new NHS 2015 scheme in the following year. Even though I was near retirement I didn't get the option of staying in the 2008 scheme as I wasn't in the pension scheme in 2010 which was the qualifying date for protection. I've just claimed my pension & should start receiving it in the next month or two. I think that I am actually better off in the 2015 scheme but hopefully at some future date I will be offered projections on both options so I can make an informed choice.

2012 was the qualifying date for protection. Based on the above, I do not think you are affected, as the criteria is (my bolding):

• These proposals apply to all members who were in a relevant public service pension scheme on or before 31 March 2012 and remained in a relevant pension scheme on or after 1 April 2015.

Originally 2010 was the qualifying date for protection if near normal retirement age (in my case in 2019). I'm not sure why they have now brought forward the date to 2012 as there are still going to be some like me who were in the old scheme for a year or two & potentially disadvantaged.

As I said I think that I'm better off in the new scheme with just a few years at the higher 1/54 accrual rate but it would have been nice to be have it properly calculated & to be offered the choice.

hyubh

nigelbb said:

Originally 2010 was the qualifying date for protection if near normal retirement age (in my case in 2019). I'm not sure why they have now brought forward the date to 2012 as there are still going to be some like me who were in the old scheme for a year or two & potentially disadvantaged.

The covering legislation was always 10 years from current NRA in 2012, however various individual schemes (including the NHS one) implemented 'tapered protection' beyond that.

strawb_shortcake

I've just been reading about this, I was in premium before being moved on to Alpha. I think I'll defer my decision until I eventually retire so I can make my decision on facts rather than assumptions. 
I do suspect I'll be better off picking the 7 years to be under Premium going by the example, I also assume that the premium element can't be reduced by 5% per year should I decide to claim my pension be SPA? 
I really do need to understand my pension better though.

drummersdale

annabanana82 said:

I've just been reading about this, I was in premium before being moved on to Alpha. I think I'll defer my decision until I eventually retire so I can make my decision on facts rather than assumptions. 
I do suspect I'll be better off picking the 7 years to be under Premium going by the example, I also assume that the premium element can't be reduced by 5% per year should I decide to claim my pension be SPA? 
I really do need to understand my pension better though.

The more I read it the less I understand but hopefully when they come out with a few more worked examples the mist will start to clear....at least it's progress of sorts.