Civil Service Pensions

new2allthis

I've just joined the Civil Service at the age of 42 and have to decide between the Alpha and Partnership schemes. I have 2 local government pension pots (I think). I don't understand any of it and have no idea which CS scheme to choose - although my first pay slip (which came through before the bumpf telling me I needed to choose a scheme) has Alpha on it.

Where can I go for independent help on any of this?

I need advice to choose between the CS schemes and understand the implications of that decision but also help to understand what I've already got.

The pensions team for my last local gov pension scheme refused to talk to me as they "don't give advice". I didn't want advice, I just wanted information because I'd not received a pension statement in years. Occasionally, I got a letter saying they couldn't send me a statement that year, but that was it. I finally got a statement after I left, but it might as well be written in Martian! Now I need someone to explain to me what it means, not advice on what to do with it (well, not till I've got my head round it anyway).

Does the Money Advice Service help with this stuff or is there another, equivalent service that deals with pensions?

Sambella

The partnership scheme is effectively havin your funds invested by a provider like Scottish Widows. Eventual pension depends on performance of funds. You have the choice of a request income or drawdown when the pension is taken. Government does not guarantee this pension.

Alpha is a career average schme like the LGPS one. Your pension grows by 1/43rd of your pensionable salary each year plus a little inflation. This comes with death in service payments etc

I'd opt for Alpha.

Kynthia

If you go to the website civilservicepensionscheme.org you can read the scheme guides for both to understand them.

Alpha is a career average scheme. Each year you are a member you will build an annual pension for life with spousal benefits. It will increase each year by CPI and while you are working for this employer you will have death in service cover. However you can't take it without reduction before state pension age.

Partnership is a Defined contribution scheme with an external pension provider. Your funds will be invested to give you a pot at retirement. However you can't predict how large this pot will be as it depends on the investments made. Plus if you live a long time the money could run out, unless you buy an annuity but thru are bad value at the moment. However it is more flexible if you want to retire early, as you can access it from 55 years and vary how much you take each year (so more when you need it or change the amounts depending on each year's tax situation). Plus it can be inherited by anyone you wish like your children.

As most people have investment pots from other pension schemes, either private or with past employers, they tend to go for Alpha so that they have a pension that covers them for longevity and is predictable and low risk. Plus defined benefit schemes pay out a very good amount compared to what you have paid in.

You already have defined benefit pensions it seems so it might be best for you to understand what you already have. At what age do these pay out and how much are they saying you will get?

kidmugsy

The LGPS schemes have the potential advantage that you can transfer them to a money-purchase scheme; this might mimic the attractions of the Partnership scheme. Presumably you are also entitled to transfer them into the Alpha scheme, in which case you would then have all your money tied up in one place until one particular age.

I suggest (i) you write to your LGPS schemes and ask them for quotations of your Cash Equivalent Transfer Values (CETVs), and (ii) you do seek advice on these possibilities. It could be money well spent.

hyubh

new2allthis wrote: »

I need advice to choose between the CS schemes and understand the implications of that decision but also help to understand what I've already got.

Proper 'advice' would cost, and would unlikely be worth it. In short, Partnership is a very good DC arrangement and Alpha a very good DB one. If you wish to heavily prioritise flexibility of contribution and what you do with the pension on retirement, then Partnership would be better, otherwise Alpha.

That said, a potential point in favour of Alpha is the ability to get a Club transfer from the LGPS. This would be sensible if:

• You left the LGPS less than 5 years ago
• Your LGPS pension involves pre-2014 service (i.e., has final salary benefits attached)
• Your rate of pay in the new job is higher, allowing for inflation, than the one you had when in the LGPS.

If you're outside the time limit to maintain a final salary link, or don't have any final salary benefits in the first place, then transferring into Alpha would be a bit pointless, and also lose any lower effective normal pension age that the LGPS benefits might have (I can clarify further if you specify your LGPS service dates).

Also, I'd not recommend transferring out of the LGPS into Partnership at all (assuming that's possible at the Partnership end) as that would be giving up your DB pension rights entirely, and the transfer value(s) from the LGPS are unlikely to make this worthwhile.

The pensions team for my last local gov pension scheme refused to talk to me as they "don't give advice" [...] I finally got a statement after I left, but it might as well be written in Martian!

What bits are you struggling with? Quote a phrase and we can help.

In general, it might be helpful to start with 'high level' descriptions of how the scheme works, then marry that up to what is said on the statement:

• For the CARE scheme (i.e. benefits earned from April 2014; it's very similar to Alpha), see here - http://www.lgps2014.org [personally I find this older site clearer than the newer https://www.lgpsmember.org, despite being by the same people].
• For the final salary schemes (i.e. pension earned on pre-April 2014 service), see here - http://web.archive.org/web/20101214024228/http://lgps.org.uk/lge/core/page.do?pageId=209493

Unless it's a diddly one, the pension fund probably has its own website with lots of info too. In practice, since the rules are the same, you could pick any LGPS fund's website. It could possibly do with a lick of paint, but I've always quite liked Wiltshire's (http://www.wiltshirepensionfund.org.uk).

Silvertabby

“ The pensions team for my last local gov pension scheme refused to talk to me as they "don't give advice" [...] I finally got a statement after I left, but it might as well be written in Martian!
”
What bits are you struggling with? Quote a phrase and we can help.

I'm a retired LGPS administrator. We didn't/couldn't give advice as we weren't legally qualified to do so - however, I'm sure I will be able to explain your statements if you post the basics.

new2allthis

Hi Kynthia

Thanks for your reply.

Not sure what or when they will pay out. I do not understand the only statement I have - the one I finally got when I left my last job - but I can tell that it doesn't include the first LGPS I had. Had I had a statement every year like I was supposed to, I would have known this years ago (grrr!!!).

What I need is to find someone who can explain the statement to me so that it actually makes sense. That's part of my initial query - who can do that? The LGPS team that provided the statement refused to discuss it with me. Very (un)helpful!

new2allthis

Hi kidmugsy

Thanks for your reply.

I would very much like to get advice. Part of my original question in this thread was who can provide that. The LGPS team that finally provided a statement after several years of not doing so are refusing to provide any information as they've not given me a statement - trouble is I don;t understand it. I completely get that they can't 'advise' me, but they won't even signpost me to where I can find out who can.

I'm at a total loss of what to do next, who to ask, who can help. I don't know what I don't know so I'm probably not even asking the right questions. I'm blundering around in the dark and am getting pretty frustrated by it all, to be honest.

Thanks for your advice about Cash Equivalent Transfer Values. I have no idea what they are but I presume the LGPS pension teams will?

new2allthis

Hi hyubh

Thanks for your reply.

I believe I have 2 LGPS pots. I worked continuously in local gov from 1999 to 2005, albeit for 2 authorities. I asked for (but have no idea if it ever happened) my pension with the first council to be transferred to the second council, as my job at the latter had a much higher salary.

For various reasons, I did not work in local gov again until 2007. Then, I had continuous service across 2 councils until October last year.

I presume the first LGPS pot was frozen when I left local gov in 2005. I doubt I would have asked for it to be transferred in 2007 because my salary was less at that point than it was when I left in 2005. My salary last October was higher than at any previous time in my local gov career. I took a pay cut when I took my current CS role.

I am due to get my state pension at 67, assuming no further government policy changes.

What is the CARE scheme? Sorry, I've never heard of it.

new2allthis

Hi Silvertabby

Thanks for your reply.

Which bits do you need to know? I don't understand any of it, I'm afraid.

Just to clarify, I wasn't wanting guidance from the LGPS team on what decisions to make about managing my pension provision. I completely understand they can't do that, from a capacity perspective if nothing else. What is was hoping for was that someone would talk me through the statement so I could understand what it was telling me. Unfortunately, all I got was a reflex "the computer says no" - aka "we don't give advice" - response. It felt like they hadn't even taken any time to read my request. It was a default "No", regardless of the actual ask. Very disappointing.

Kynthia

New2allthis I'm afraid I don't know the LGPS specifically. However you must be able to find a read your scheme booklets and a guide to understanding your statement. Is there a website? Also if you post some of what your statement says there are LGPS experienced members here who will help explain it to you.

If you think your previous pension hadn't been linked or transferred to your later one as requested then dig out any paperwork and evidence you requested it incase you can get it rectified. However it's possible there are rules on what service can be linked and how, and that your request didn't comply. Or a transfer did take place and you aren't understanding that your reckonable service had increased to reflect it.

CARE is a term for a career average scheme, which is what the Alpha scheme is.