Deferred Civil Service Pension Lump Sum

anotherdollar55

I left the Civil Service in 1999. I was in the PCSPS, which is known as the 'Classic' scheme. I'm now approaching 55 and going to take my pension and lump sum on my 55th birthday. It's not big money, but I have decided I can make very good use of it now. As I left before the 2007 Civil Service pension reforms, I am not sure whether I may get the option of extra lump sum / commutation which is offered at a trade of £1 pension for £12, but it does suggest that I might do. I know I'll get the automatic lump sum of 3 times my annual pension.

Those who left after 2007 get this option to commute a percentage of their pension, but looking at the info on the website and the PCSPS code, it's not clear about those who left prior to the October 2007 changes.

Does anybody know the answer to this please, or have any of you been in a similar situation? I've put my paperwork in, so will know in approximately the next 10 working days, but I'm doing my sums and a little excited too as I have plans! Ty.

Dazed_and_confused

What you have you seen on the website that suggests you might not be able to take additional lump sum?

And be prepared for several comments about the 12:1 conversion rate and how poor this is considered.

Silvertabby

How much lump sum would you like to take?

The above links to the LGPS - but will work for the CS as they both use 1:12 commutation rates.

anotherdollar55

Dazed_and_confused wrote: »

What you have you seen on the website that suggests you might not be able to take additional lump sum?

And be prepared for several comments about the 12:1 conversion rate and how poor this is considered.

Hi, thanks. Yes, it's a poor exchange rate, but I may still look at this. The bit that made me wonder off the Civil Service Pension Scheme website, is where it states: "At retirement, all members who left the scheme on or after 1 October 2007 are given the option to give up some of their pension in exchange for a lump sum, up to the maximum allowed by HMRC.
If your pension was deferred before 1 October 2007, there may be different lump sum options available to you. Your retirement quote will provide details of the lump sum options available to you".

I imagine this reflects the difference between the old classic with its automatic lump sum of three times the annual pension and the newer schemes when things had changed. Maybe I am looking for the best of all worlds here, but I'll soon find out.

anotherdollar55

Thankyou. I'll have to weigh up whether x12 is a good enough rate to sell £1000 worth of annual pension for £12000. Tasty money now and I'm tempted as I can put it to very good use now and hopefully that will offset the losses in 12+ years, when I hopefully live a long youthful pensionhood and keep doing half marathons into my 70s and 80s. If I was a time lord, I would know the answer. Many thanks.

westv

I'd see it is way, where would I be able to get an inflation linked annuity at 8.3%?

anotherdollar55

westv wrote: »

I'd see it is way, where would I be able to get an inflation linked annuity at 8.3%?

Yes, that's a good point. I imagine the State knows it's going to win from this deal overall as most of us will live well over 12 years from retirement. But, yet the carrot is dangled.

anotherdollar55

Ok folks. Here's the answer. Because I left the Civil Service before 1st October 2007, commutation is not an option. My lump sum is 3 times my annual pension and that's it. The Pensions Dept in Liverpool have confirmed this.

GunJack

anotherdollar55 wrote: »

Ok folks. Here's the answer. Because I left the Civil Service before 1st October 2007, commutation is not an option. My lump sum is 3 times my annual pension and that's it. The Pensions Dept in Liverpool have confirmed this.

This may be a blessing in disguise for you, tbh....f you need an extra lump personal loans are v.cheap, paid for with the unreduced pension

anotherdollar55

Thanks. Very true. Had the option been open to me, I would not have traded for 12:1, it is a poor deal and the nice lump sum I'm getting is enough anyway. It's worked out well.