Treasury response to consultation on the McCloud Pension ruling

Silvertabby

jamjar92 said:

Golactico said:

I'm no expert by a long stretch, but in a nutshell, I think this is what the decision means:

1. It affects anyone with service in a relevant public sector pension scheme prior to 01 April 2012 and also has a period of service between 01 April 2015 and 31 March 2022. 
2. As a result of the McCloud judgement, people within this scope are entitled to decide whether they want their pension during the period from 01 April 2015 and 31 March 2022 to be treated as being under their old pension scheme, or under the new pension scheme that they were transferred in to from 01 April 2015 (NB some people may actually be better off sticking with the the new scheme for this period).
3. All that the Consultation decision means is that these individuals don't have to decide now whether they want the period of service in question treated as being under their old or new scheme, but can wait until they are due to retire, when they will have clear and accurate figures of what each scheme will pay them for that period, and THEN decide which is best for them.

Well summarised. For my case my Salary grade as not changed since 2012 (ignoring any cost of living rises). I am now assuming that if I decide at retire at 60 under r85, I can use get old membership rules until March 22 with no actuarial reduction. From 2022 until I retire reduction of 7 years. This surely as got to result in more pension for me?

Not as clear cut as that.  The new rules accrual rate of 1/49th (plus annual revaluation) is way more generous than the old rules 1/60th (with no revaluation).  

german_keeper

Hopefully for the civil service scheme the pension provider MyCSP will be able to incorporate this on the Annual Benefit Statement in future. Seems to me all that is needed is the annual earnings and CPI rate for the 7 year period concerned and then the annual CPI uprate after 2022. That would enable accurate calculation of Alpha. Legacy schemes would be easier with just salary at retirement multiplied by 7/80 or 7/60.

I suppose AR may also be relevant in Alpha for those wishing to retire prior to SPA so that may be a bit more tricky. 

hugheskevi

german_keeper said:

Hopefully for the civil service scheme the pension provider MyCSP will be able to incorporate this on the Annual Benefit Statement in future. Seems to me all that is needed is the annual earnings and CPI rate for the 7 year period concerned and then the annual CPI uprate after 2022. That would enable accurate calculation of Alpha. Legacy schemes would be easier with just salary at retirement multiplied by 7/80 or 7/60.

I suppose AR may also be relevant in Alpha for those wishing to retire prior to SPA so that may be a bit more tricky. 

Like most administrative things, it will be an 80/20 issue. For example, how is someone who moved to alpha, purchased EPA and Added Pension, paid an Annual Allowance charge, got divorced and split their pension then took partial retirement at age 56 before taking their full pension and paying an LTA charge at age 57 going to be remedied?

So whilst many members will be straightforward, that 20% of more complex cases will require the bulk of the work.

westv

Silvertabby said:

jamjar92 said:

Golactico said:

I'm no expert by a long stretch, but in a nutshell, I think this is what the decision means:

1. It affects anyone with service in a relevant public sector pension scheme prior to 01 April 2012 and also has a period of service between 01 April 2015 and 31 March 2022. 
2. As a result of the McCloud judgement, people within this scope are entitled to decide whether they want their pension during the period from 01 April 2015 and 31 March 2022 to be treated as being under their old pension scheme, or under the new pension scheme that they were transferred in to from 01 April 2015 (NB some people may actually be better off sticking with the the new scheme for this period).
3. All that the Consultation decision means is that these individuals don't have to decide now whether they want the period of service in question treated as being under their old or new scheme, but can wait until they are due to retire, when they will have clear and accurate figures of what each scheme will pay them for that period, and THEN decide which is best for them.

Well summarised. For my case my Salary grade as not changed since 2012 (ignoring any cost of living rises). I am now assuming that if I decide at retire at 60 under r85, I can use get old membership rules until March 22 with no actuarial reduction. From 2022 until I retire reduction of 7 years. This surely as got to result in more pension for me?

Not as clear cut as that.  The new rules accrual rate of 1/49th (plus annual revaluation) is way more generous than the old rules 1/60th (with no revaluation).  

But no automatic lump with alpha and can't be taken unreduced until SPA.

Silvertabby

westv said:

Silvertabby said:

jamjar92 said:

Golactico said:

I'm no expert by a long stretch, but in a nutshell, I think this is what the decision means:

1. It affects anyone with service in a relevant public sector pension scheme prior to 01 April 2012 and also has a period of service between 01 April 2015 and 31 March 2022. 
2. As a result of the McCloud judgement, people within this scope are entitled to decide whether they want their pension during the period from 01 April 2015 and 31 March 2022 to be treated as being under their old pension scheme, or under the new pension scheme that they were transferred in to from 01 April 2015 (NB some people may actually be better off sticking with the the new scheme for this period).
3. All that the Consultation decision means is that these individuals don't have to decide now whether they want the period of service in question treated as being under their old or new scheme, but can wait until they are due to retire, when they will have clear and accurate figures of what each scheme will pay them for that period, and THEN decide which is best for them.

Well summarised. For my case my Salary grade as not changed since 2012 (ignoring any cost of living rises). I am now assuming that if I decide at retire at 60 under r85, I can use get old membership rules until March 22 with no actuarial reduction. From 2022 until I retire reduction of 7 years. This surely as got to result in more pension for me?

Not as clear cut as that.  The new rules accrual rate of 1/49th (plus annual revaluation) is way more generous than the old rules 1/60th (with no revaluation).  

But no automatic lump with alpha and can't be taken unreduced until SPA.

No automatic lump sum with 1/60th either.  

Dazed_and_C0nfused

westv said:

Silvertabby said:

jamjar92 said:

Golactico said:

I'm no expert by a long stretch, but in a nutshell, I think this is what the decision means:

1. It affects anyone with service in a relevant public sector pension scheme prior to 01 April 2012 and also has a period of service between 01 April 2015 and 31 March 2022. 
2. As a result of the McCloud judgement, people within this scope are entitled to decide whether they want their pension during the period from 01 April 2015 and 31 March 2022 to be treated as being under their old pension scheme, or under the new pension scheme that they were transferred in to from 01 April 2015 (NB some people may actually be better off sticking with the the new scheme for this period).
3. All that the Consultation decision means is that these individuals don't have to decide now whether they want the period of service in question treated as being under their old or new scheme, but can wait until they are due to retire, when they will have clear and accurate figures of what each scheme will pay them for that period, and THEN decide which is best for them.

Well summarised. For my case my Salary grade as not changed since 2012 (ignoring any cost of living rises). I am now assuming that if I decide at retire at 60 under r85, I can use get old membership rules until March 22 with no actuarial reduction. From 2022 until I retire reduction of 7 years. This surely as got to result in more pension for me?

Not as clear cut as that.  The new rules accrual rate of 1/49th (plus annual revaluation) is way more generous than the old rules 1/60th (with no revaluation).  

But no automatic lump with alpha and can't be taken unreduced until SPA.

I'm sure someone posted on an earlier thread that Alpha taken at 60 with actuarial reduction may be worth more than Classic would be.  Without the lump sum of course.

westv

Silvertabby said:

westv said:

Silvertabby said:

jamjar92 said:

Golactico said:

I'm no expert by a long stretch, but in a nutshell, I think this is what the decision means:

1. It affects anyone with service in a relevant public sector pension scheme prior to 01 April 2012 and also has a period of service between 01 April 2015 and 31 March 2022. 
2. As a result of the McCloud judgement, people within this scope are entitled to decide whether they want their pension during the period from 01 April 2015 and 31 March 2022 to be treated as being under their old pension scheme, or under the new pension scheme that they were transferred in to from 01 April 2015 (NB some people may actually be better off sticking with the the new scheme for this period).
3. All that the Consultation decision means is that these individuals don't have to decide now whether they want the period of service in question treated as being under their old or new scheme, but can wait until they are due to retire, when they will have clear and accurate figures of what each scheme will pay them for that period, and THEN decide which is best for them.

Well summarised. For my case my Salary grade as not changed since 2012 (ignoring any cost of living rises). I am now assuming that if I decide at retire at 60 under r85, I can use get old membership rules until March 22 with no actuarial reduction. From 2022 until I retire reduction of 7 years. This surely as got to result in more pension for me?

Not as clear cut as that.  The new rules accrual rate of 1/49th (plus annual revaluation) is way more generous than the old rules 1/60th (with no revaluation).  

But no automatic lump with alpha and can't be taken unreduced until SPA.

No automatic lump sum with 1/60th either.  

Classic does.
Edit: Classic is 1/80th isn't it?

german_keeper

Alpha would be better for me than Classic even with 7 years AR retiring at 60, although it's academic because I am in Partnership. Key factors are that I haven't been promoted since 93 and my gross pay has only increased by 5.2% these last 10 years. So the better accrual rate and CPI increases at accrual in Alpha are more valuable to me than the final salary element with the legacy schemes.

westv

My wife has mentioned in passing that, when she started, the Classic NRA was 57. I assume that's no longer the case.

german_keeper

hugheskevi said:

german_keeper said:

Hopefully for the civil service scheme the pension provider MyCSP will be able to incorporate this on the Annual Benefit Statement in future. Seems to me all that is needed is the annual earnings and CPI rate for the 7 year period concerned and then the annual CPI uprate after 2022. That would enable accurate calculation of Alpha. Legacy schemes would be easier with just salary at retirement multiplied by 7/80 or 7/60.

I suppose AR may also be relevant in Alpha for those wishing to retire prior to SPA so that may be a bit more tricky. 

Like most administrative things, it will be an 80/20 issue. For example, how is someone who moved to alpha, purchased EPA and Added Pension, paid an Annual Allowance charge, got divorced and split their pension then took partial retirement at age 56 before taking their full pension and paying an LTA charge at age 57 going to be remedied?

So whilst many members will be straightforward, that 20% of more complex cases will require the bulk of the work.

Indeed a very good point, never thought of that. And these more complex situations are where MyCSP seem to struggle. A while ago I was trying to get access to the online portal. Because I am partially retired and taken my Classic pension, but am now in Partnership, the helpline operator couldn't get past the fact that I was in Partnership and therefore not allowed access to the portal. Which would of course make sense had I been in Partnership my whole career. Eventually the 3rd person I spoke to got it and realised that the important information was that I am a Classic pensioner and therefore entitled to access.