updates on FBU, Civil service pensions

mapleoak

“... and that will have to be resolved (by MyCSP - god help us!)” :-)

tigerspill

Does anyone know (or is prepared to speculate) if this will also be reflected in the Teachers Pension Scheme?

Trying_to_be_good

Re the tax position of the changes to be implemented

I was part of the team in the Inland Revenue that wrote the tax legislation to ensure that those who were victims of the mid-selling of personal pensions were put back in the same tax position as if they’d not left their occupational scheme.

I think that’ll be the precedent followed.

As someone ill-health retired under alpha, I would be entitled to an additional 6 years 8 months reckonable service in Classic as an enhancement, so 6.6667/80 times final salary (8.3%) additional annual pension. Though it’s partially offset by 948 days (from 1 Apr 15) switching from alpha (2.32%pa = 6%) to Classic (1/80pa = 3.2%). But as alpha didn’t have a lump sum, that’s a chunky (8.3% + 3.2%) x 3 = best part of 35% salary as a tax free lump sum.

I need to work out the annual allowance implications.

sammyjammy

tigerspill wrote: »

Does anyone know (or is prepared to speculate) if this will also be reflected in the Teachers Pension Scheme?

Yes it applies to all the affected Public sector pensions.

Mr_Countdown

Really impressed with your workings out there Trying To Be Good.

I’m not so great with figures so would be really interested to hear your thoughts on if I would benefit much based on your workings out.
I’m nearly 52 and have over 32 years in the civil service and was moved from classic to alpha in 2015. I was hoping to retire at 56 so if I was moved back to classic would I benefit much or not really?

For info at 56 I would get £11,983 max pension and £27,972 min lump sum or £9,202 min pension and £61,346 max lump sum. These figures are from the earlier retirement calculator on MyCSP and take into account the penalties for retiring early.
Many thanks.

chubsta

Mr_Countdown wrote: »

Really impressed with your workings out there Trying To Be Good.

I’m not so great with figures so would be really interested to hear your thoughts on if I would benefit much based on your workings out.
I’m nearly 52 and have over 32 years in the civil service and was moved from classic to alpha in 2015. I was hoping to retire at 56 so if I was moved back to classic would I benefit much or not really?

For info at 56 I would get £11,983 max pension and £27,972 min lump sum or £9,202 min pension and £61,346 max lump sum. These figures are from the earlier retirement calculator on MyCSP and take into account the penalties for retiring early.
Many thanks.

I am in a similar position as yourself as I am just over 53 with 35 years service, also moved over to Alpha in 2014.

I 'locked' my Classic as the best of my last 3 years a couple of months before we were switched over to Alpha, and that has been increasing with RPI or whatever it is ever since. The Alpha goes up at a decent rate, the annual pension I will get from that goes up by approx £1000 per year of contributions, so if I retire at 60 and take the Acturial Reduction on the Alpha portion then as far as I can see I am much better off staying on the Alpha until then.

Dazed_and_confused

I don't think there is an easy answer to this, it would likely depend on each individual's personal circumstances and their view on having more lump sum etc.

For example if you opted (assuming the resolution is going to be a choice) back into Classic then by April 2020 you would have got an extra 5 years in Classic. This could be taken at 60 alongside the extra lump sum that would be due.

If you opted to stay on Alpha you would have a significantly higher pension for those 5 years but without a lump sum and not payable till 67/68.

So for many the obvious choice would be to move back to Classic as the pension is payable from 60.

But Classic is only building up 1.25%/year (1/80th). Whilst Alpha is nearly double at 2.32%.

So a third option might be to stay in Alpha but take that at 60 and even with the actuarial reduction the annual pension may actually be more than moving back into Classic.

You would have to weigh up if the extra accrued under Alpha is better for you or if converting this to Classic, which has the lump sum as well, is better.

Time to fire up your calculator

crv1963

stoozie1 wrote: »

Thanks for this.

I thought they had had to retire and return to be able to draw down their 1995 scheme monies?

My knowledge is only of NHS though, you are knowledgeable about the CS?

To be able to work in the NHS and claim a 1995 scheme pension you do have to retire and return, then your new income of pension plus NHS wage must not exceed your finishing salary at the point of retirement, hence why most return to part time roles.

You can continue to work and build pension from NPA up to 45/80ths - assuming you have 40/80ths at NPA. you can work 5 years more and increase your pension for ordinary classes. For Special Classes you work 2.5 years past NPA to get to 45/80ths.

Once someone reaches 45/80ths no matter how many years more they have reached the maximum. Alternatively you can retire and work/earn as much as you want as long as it is not directly on the NHS payroll.

sammyjammy

chubsta wrote: »

I am in a similar position as yourself as I am just over 53 with 35 years service, also moved over to Alpha in 2014.

I 'locked' my Classic as the best of my last 3 years a couple of months before we were switched over to Alpha, and that has been increasing with RPI or whatever it is ever since. The Alpha goes up at a decent rate, the annual pension I will get from that goes up by approx £1000 per year of contributions, so if I retire at 60 and take the Acturial Reduction on the Alpha portion then as far as I can see I am much better off staying on the Alpha until then.

Your Classic pension will pay out on whatever the best of your last actual three years salary is when you retire not when you left Classic.

Dazed_and_confused

Not if you actually leave the pension scheme it wont.

Some people are savvy enough to leave and later rejoin. Which means they are a deferred pensioner for the purposes of their Classic pension.

Can have two advantages, locks in a temporarily high "final salary" value and then gets inflation increases not pay rise increase