Transferring into Civil Service Alpha

gog123

HI

I have tried all of the civil service guidance websites, but cannot get an answert to this, can anyone help?

I am about to join th Civil Service late in life (40), and have a small personal pension invested by St James' Place.

However, my frozen pension is only worth £95,000 and so would produce about £3k per annum i think, if i simply stopped now and took it at 67.

I want to know if i can transfer this into Alpha to buy extra years, and if so, how many years £95,000 would accrue. I only have 27 years until retirement so the maximum pension I could get without a transfer would be 27*2.32.

thanks in advance for any help.

JoeCrystal

You should be able to transfer it in. However, you would need to request a quote for the transfer. There are too many variables to work out what it will get but what is certain is that it should buy more than £3,000 per year and the pension will be iron-clad guaranteed with all the risks rest with your employer.

Looking at the previous threads, hugheskevi actually got a link to the spreadsheet used to work out what you can get:

hugheskevi wrote: »

You can use the actuarial factors to calculate the alpha transfer-in value, or ask the Scheme Administrator.

gog123

Thank you - i had guessed it would do better, even on the modest civil service salary. I will get the quote when I join.

cmayflower

I think the best thing to do would be to contact MyCSP the pension administrators, they would know the detail, there is a section on transferring into Alpha within the Alpha scheme guide. https://www.civilservicepensionscheme.org.uk/members/alpha-scheme-guide/

gog123

Thank you - I think (might be wrong) MyCSP requires you to be a member before answering queries, and I don't start until September. I might give them a go, anyway.


Thanks again

JoeCrystal

gog123 wrote: »

Thank you - I think (might be wrong) MyCSP requires you to be a member before answering queries, and I don't start until September. I might give them a go, anyway.


Thanks again

Using hugheskevi's spreadsheet and ignoring GMP elements and assuming there is 27 Aprils between today and your NPA, £95,000 works out at around £10,600 pension... (I am dubious that I got the calculation right now... It can't be that good a deal.) Let us know what you actually did get once you get the ball rolling.

hugheskevi

I have tried all of the civil service guidance websites, but cannot get an answer to this, can anyone help?

See section 01C of the main alpha scheme guide, linked above by cmayflower.

However, my frozen pension is only worth £95,000 and so would produce about £3k per annum i think, if i simply stopped now and took it at 67.

The pension is not frozen, it is invested and changes in value in line with the investments held.

Don't pay much attention to projected income, it is an assumption-driven figure and is generally very pessimistic. What you end up with is a pot of money, not an income, anyway.

and so would produce about £3k per annum i think, if i simply stopped now and took it at 67.

Note that your State Pension age (and so your alpha Normal Pension age) is 68.

I want to know if i can transfer this into Alpha to buy extra years

A transfer-in to alpha purchases a fixed amount of pension income, which then increases in line with CPI. Added years are a feature of the previous final-salary pensions so no longer relevant for you.

and if so, how many years £95,000 would accrue.

It will probably be something like £8,000 of pension p/a from age 68.

I only have 27 years until retirement so the maximum pension I could get without a transfer would be 27*2.32.

You can purchase Added Pension or EPA (Sections 02B and 02C of the alpha scheme booklet linked earlier in thread) to enhance your alpha pension, in addition to transferring-in.

Note that alpha will change soon, due to the McCloud employment tribunal case and the cost cap processes. You can read more about this at this link.

Looking at the previous threads, hugheskevi actually got a link to the spreadsheet used to work out what you can get:

The factors all changed on 1 April 2019, so these are all out-of-date now and haven't yet been updated on the website. They are a decent starting point to get a ballpark figure, but the amount of pension a transfer-in buys is now lower than it was prior to 1 April 2019.

Using hugheskevi's spreadsheet and ignoring GMP elements and assuming there is 27 Aprils between today and your NPA, £95,000 works out at around £10,600 pension... (I am dubious that I got the calculation right now... It can't be that good a deal.) Let us know what you actually did get once you get the ball rolling.

Sounds about right for the old factors.

Remember that there are 27 years before the pension comes into payment, during which time the pension is only increasing by CPI. The discount rate used in the calculation was CPI+2.8%, so that is 27 years of the difference between CPI and CPI+2.8% compounding to reduce the purchase price.

Even so, I agree it would be a good deal and better than anything available privately for an index-linked pension.

gog123

JoeCrystal wrote: »

Using hugheskevi's spreadsheet and ignoring GMP elements and assuming there is 27 Aprils between today and your NPA, £95,000 works out at around £10,600 pension... (I am dubious that I got the calculation right now... It can't be that good a deal.) Let us know what you actually did get once you get the ball rolling.

My "back of an envelope" calculation came out about the same. I assumed 28% cost per year for each 2.32%, and worked out about 10 years. 10x2.32% come out at about 10k per annum, so this confirms my unscientific guesstimate.

I will confirm the actual figures when I get them