Should I consolidate pensions?

Bongowhack

This sort of question will have been asked time and time again, I'm sure, but having a quick scan through the most recent posts, I can't see anything to give a definitive answer to my question so:

I've recently joined the Civil Service, have signed up to a new Alpha pension as part of the Civil Service Pension scheme and I plan to be here some time. I'm now 36 and have a couple of other pension pots and I'm wondering if it's worth consolidating them into my CSP but I'm not sure of the pros and cons.

I have pensions with the NHS, LGPS and a separate private one which, in total, are forecast to give an annual return of around £4k.

Assuming I can, what would I gain from transferring these benefits into the CSP and what would I potentially lose? My understanding of the Alpha CSP is that it's related to salary & years of service, so how does transferring a pot in from elsewhere affect things? Do I gain extra years of contributions?

I'm fairly comfortable with most financial matters like borrowing, savings, investments etc but when it comes to pensions I struggle to get my head round it all.

Many thanks.

hyubh

Bongowhack wrote: »

Assuming I can, what would I gain from transferring these benefits into the CSP and what would I potentially lose? My understanding of the Alpha CSP is that it's related to salary & years of service, so how does transferring a pot in from elsewhere affect things? Do I gain extra years of contributions?

Alpha is a 'CARE' scheme in which a percentage of your pensionable pay for each year you are an active member of the scheme becomes an annual pension amount, revalued by CPI to keep its value in real terms.

Years of service as such are irrelevant. If you were to transfer in the private pension, you would buy a set amount of extra pension, as if you had earned more in the year and so earned a higher regular pension accrual for it than you actually did.

Transferring in the NHS and LGPS pensions, in contrast, would be a bit different, so long as you left the job you earned them with within 5 years of joining the civil service. If you did, then any 'final salary' component - i.e. any pre-April 2014 service for the LGPS one, assuming England or Wales, otherwise pre-April 2015 for the NHS scheme and Scottish LGPS - would transfer as a final salary service credit, even though you don't have any final salary benefits in the civil service scheme currently. Any CARE component would then transfer over pretty much 'as is' - in particular, if your NHS pension is CARE, then you would transfer over the NHS scheme's higher revaluation rate (CPI+1.5%).

However, if the gap between you leaving the NHS or local government job and joining the civil service were more than 5 years, the pension would transfer over more like the private one would, i.e. buying extra Alpha pension on Alpha terms. One thing to keep in mind is that would push up the normal pension age of the transferred-in benefits, given Alpha is SPA and an old NHS or LGPS pension will be 65 at most. However, the Alpha CARE credit would reflect that.

Ultimately, the best way to see what you would get if you transferred in any of these pensions is to complete the necessary forms to get quotations:

http://www.civilservicepensionscheme.org.uk/media/95303/wte-tvin-final-v2.pdf

Keep in mind you need to apply to transfer in an old pension within 12 months of joining Alpha to be allowed to actually do it.