Civil Service partial retirement - salary of reference

Freeman24reverseFpenny

If you take partial retirement in the Civil service, your subsequent combined pension and salary cannot exceed your "salary of reference", which typically, are your best pensionable earnings out of the last three years before partial retirement.

Does anybody know if this salary of reference is increased annually by the CPI rate of inflation?

Thanks

sammyjammy

I would say no unless you receive a pay increase that equals CPI, the salary of reference is your salary. The salary it refers to is the full time salary, I guess if your highest salary in the three years is not what you are receiving now it maybe different.

german_keeper

I partially retired in April and I assumed the same as sammyjammy, that in future (note the absence of that ridiculous phrase going forward!) the relevant salary for abatement purposes would be my full time equivalent salary. To be honest I didn't overly fret about it as I gave myself a bit of leeway with the number of PT hours I decided on, making the reasonable assumption that FTE salary would be highly unlikely to keep pace with the CPI increases to my pension.

My situation may be unusual in that I am in Partnership so my Classic was deferred/preserved and I went PR at the relatively young age of 54. But it seems, at least in my case, that my current FTE salary, let alone future salaries, is already irrelevant. The only salary of reference I have been quoted was as at 1 April 19 when I took PR, this was my pensionable earnings at Oct 15 (when I joined Partnership) multiplied by 1.0403, CPI increases since then. When I turned 55 a couple of weeks ago and the backdated CPI increases were applied, no salary of reference was quoted, just that the CPI increase factor for my pension and lump sum was 1.0653, ie taking into account the April 19 CPI increase.
I have looked at the guidance on the MyCSP site and I am not sure the method of ongoing potential abatement calculation is covered, at least not as I can understand it.

BobQ

german_keeper wrote: »

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I have looked at the guidance on the MyCSP site and I am not sure the method of ongoing potential abatement calculation is covered, at least not as I can understand it.

I wonder what happens if, having been given a salary of reference your employer offers you extra work as (non pensionable overtime). ... I have been told of people doing this overtime or claiming travel time which means they are paid more than their salary of reference.

I have found this on the site.

This states that the SoR is increased for inflation and abatement is applied after partial retirement. The SoR is also increased by any pensionable increases (higher salary, some allowances) but not for non-pensionable amounts (some bonuses or overtime).

macjonny

This is not actually an answer to your question, but FYI, there has been quite a lot of discussion where I work about salary of reference for abatement. The consensus is that it is based on your last year of service, even if your final pension is based on a different year. The wording on the civil service pension website is ambiguous - it says the salary of reference ‘may’ be based on an earlier year. I’m anxiously awaiting clarification from MyCSP.