Civil Service pensions and the McCloud judgement

hugheskevi

Busy_Mee said:

I have been trying to work out my situation. My last day in classic was 31 Jan 2018, and then I moved to Alpha.

My retirement date is 31 August 2021 age 57. I have manually calculated what my classic pension would have been had I continued to 31 August 2021 and compared to my current classic + alpha forecast. As suggested above  the classic + alpha combo is the better option.

However I hadn't realised that I would get the choice to backdate my Alpha pension to 2015. Is that right ? Effectively I could choose to have my pension calculated on Alpha terms for the period from 2015 to 31 Jan 2018. If this is the case this could increase my pension but reduce my pension lump sum ? 

Would I need to pay back any underpaid contributions ( can't remember if there was any difference at that point).

Any wisdom Hugheskevi would be hugely appreciated.

Everything below assumes you retire on 31 August 2021.

At that time, your pension will be calculated and paid based on classic service to 31 January 2018 and alpha from 1 Feb 2018 to 31 August 2021. You will not have any choice at that time.

At some point over the next couple of years you will be asked to choose to have a pension based either entirely on classic service, or on classic service to 31 March 2015 and alpha service thereafter. You have to choose one of those options, you cannot just carry on receiving what you got put into payment when you retired. 

The consequence of your choice will result in different benefits - as you say, if you chose alpha from 2015 (and assuming you do not commute pension for lump sum) then you would probably have a lower lump sum but a higher pension. Depending on when the pension is corrected that might result in you owing the scheme money, and you may have to arrange a repayment plan.

Contributions to alpha and classic have been the same, so there are no changes needed there - but if you are unmarried when you retire the refund of widows contributions would be different.

Busy_Mee

Thank you so much. I will get my calculator out and try and calculate the two options.

The problem is now trying to decide what to do re my lump sum. I originally was going to commute some pension to lump sum, on the basis we wanted more funds earlier in our retirement and we both have SRP to come later.

However this will probably mean I would have more lump sum to repay. I think I need to do the comparison and if the Alpha back to 2015 is more advantageous, just take the minimum lump sum.