Civil Service Pension and SIPP

luvsbargins

Thank hyubh. I did choose Classic Plus in 2002 as I thought it would benefit me in the future, though I never fully understood the various civil service pensions available. So, if I started paying into the pension in 1982 and moved to Classic Plus in 2002, I had 20 years in the old pension, not 10. Is this correct? 

(Bearing in mind though that I was full time for the first 13 years then from 1995 part time due to having children, so each year worked from 1995 to 2002, was effectively only about half a year).

Thank you for explaining Classic Plus to me, 18 years after I signed up for it! 

hyubh

luvsbargins said:

Thank hyubh. I did choose Classic Plus in 2002 as I thought it would benefit me in the future, though I never fully understood the various civil service pensions available. So, if I started paying into the pension in 1982 and moved to Classic Plus in 2002, I had 20 years in the old pension, not 10. Is this correct? 

(Bearing in mind though that I was full time for the first 13 years then from 1995 part time due to having children, so each year worked from 1995 to 2002, was effectively only about half a year).

Yes, for both Classic and Premium, reckonable service = calendar membership pro-rated for part time working, final pay = whole time equivalent (my reference to '10' years was indeed a typo). Were you 'protected' from Alpha? My guess would be Alpha terms (higher accrual rate still for career average not final pay) would be better for you.

luvsbargins

Hi hyubh. I’m not sure when I was first given the option of going into Alpha. Could it have been as long ago as 2002? I was allowed to stay in Classic plus until I was 55, then I was forced into Alpha. Now you’re saying Alpha is probably a good product anyway. Looks like I can’t take my Alpha pension until state pension age of 67 unless I buy added years. That’s why I didn’t like Alpha, and why I was unhappy about having to move from Classic plus to Alpha on 01/12/18.

drummersdale

Hi, similar to Luvsbargins I will have 39 years in October, predominantly in Classic (I moved to Alpha this month after tapering ended) - I am interested in partial retirement myself so am I right in thinking that as long as I avoid abatement- so look to work for about 50% of the time I do at present - it would make sense to go at 60 - my normal pension age for Classic - as the pension would not attract any NI, so I may find my pension plus salary not wildly adrift to what I am on now (I realise there will be a difference but lack of travelling and other costs will factor into that)?  I am a little confused about the Alpha element which if I was to go at 60 would be around 2 and a half years worth - can that only be taken at 67 or can it be taken earlier but substantially reduced for taking it early?

Kind Regards 

hyubh

luvsbargins said:

Hi hyubh. I’m not sure when I was first given the option of going into Alpha. Could it have been as long ago as 2002? I was allowed to stay in Classic plus until I was 55, then I was forced into Alpha. Now you’re saying Alpha is probably a good product anyway. Looks like I can’t take my Alpha pension until state pension age of 67 unless I buy added years.

No, Alpha is from 2015. There was an options exercise in 2014:

https://www.civilservicepensionscheme.org.uk/members/the-new-pension-scheme-alpha/options-exercise/

Even with the higher normal pension age, for someone at your pay level, the much better accrual rate can make Alpha preferable.

That said, with McCloud, you'll probably end up with the better of both for April 2015+ service anyway...

luvsbargins

Hi hyubh. I’ll read up on the Alpha scheme now whereas I’ve just ignored pension literature in the past, and compare with Classic plus. It may well be that due to the McCloud judgement, I will be offered the opportunity to backdate my Alpha pension to 2015 and that would probably benefit me. Thanks for all your help.

luvsbargins

Hi drummersdale. I’m going to try and reply to your question now that I’ve been researching my situation for the past 24 hours! 

When you reach 60, you need to take your Classic, Classic plus, or premium pension. Otherwise like hugheskevi says, you would be working part of the week for nothing. You need to reduce your hours by about 50%. You’ll be no worse off, if your pay is £20000 now, you’d get half of that as a wage or salary, and around £10000 pension. You’d pay less or no NIC, and less travelling costs.

You would continue to pay into your Alpha pension, which you can only take at your state pension age (unless you buy added years).

I think this is right, we’ll have to see if anyone corrects me on here. 

Bravepants

luvsbargins said:

You would continue to pay into your Alpha pension, which you can only take at your state pension age (unless you buy added years).

You can take Alpha actuarially reduced independently of other CS pensions, whether you buy Added Years, or EPA or not.

drummersdale

luvsbargins said:

Hi drummersdale. I’m going to try and reply to your question now that I’ve been researching my situation for the past 24 hours! 

When you reach 60, you need to take your Classic, Classic plus, or premium pension. Otherwise like hugheskevi says, you would be working part of the week for nothing. You need to reduce your hours by about 50%. You’ll be no worse off, if your pay is £20000 now, you’d get half of that as a wage or salary, and around £10000 pension. You’d pay less or no NIC, and less travelling costs.

You would continue to pay into your Alpha pension, which you can only take at your state pension age (unless you buy added years).

I think this is right, we’ll have to see if anyone corrects me on here. 

Hi luvsbargins - thanks for the response - I’ve heard people saying that partial retirement is a great middle ground towards retirement as you work less hours but with Pension & Salary together you aren’t that worse off - which seems a great idea. My wife is 5 years younger than me so I would potentially work partial for 3 years so she can perhaps retire at 58 - I don’t want to be working until I’m 65 if I can help it! Good luck with whatever you decide to do!

luvsbargins

Hi Bravepants. If I were to retire at 62, I would make no further contributions into Alpha from that day up to my 67th birthday. The pension amount would remain static for 5 years. Therefore would there be any point in holding onto that pension for 5 years? If I took it at 62 would they reduce it for taking it early?