Civil Service Pension

Veeno1_123

Hello all I am looking for some advice on my pension scheme as this really is not my field of expertise.

I am 38 years old, have worked for the Prison Service for just over 18 years and feel I may have been placed on to the wrong Scheme.

I am currently on the 'Standard Life Partnership Pension Scheme' but it has come to my attention that I am the only person on this. All of my colleagues throughout the service are on 'Alpha  Civil Service Pension Scheme' and are paying nearly double what I am.

Is it worth changing over to Alpha? Is there any action I can take etc?  I am looking at staying within the service 


Any advice would be greatly appreciated


Many Thanks

Dazed_and_C0nfused

Chalk and cheese.

Partnership is a defined contribution scheme where you build up a pot of money for your retirement.

Alpha is a defined benefit scheme where you build up a guaranteed pension for life.  It is often seen on here as an exceptionally good pension.

For example two people both earning £30k it may be something like this (ignoring any tax relief).

Partnership you contribute 3% and get basic rate tax relief added so £1,125 from you and your employer 14% so £5,325 in total.  That money is available to you from normal scheme pension age and 25% can be taken as a TFLS.

Alpha you contribute 5.45% (£1,308 after tax relief) but the employer contributions are irrelevant.  In return you accrue a pension of £696.

I suspect it is unusual for someone your age to be in the Partnership scheme but it's much better than nothing at all.

It may be moving to Alpha is a sensible move.

What does your latest partnership statement show your fund value is?

TVAS

Did you join the Partnership scheme because at age 20 the contributions were lower? Now you are regretting that choice?

NedS

I believe it's normally your choice as to whether you enter the Partnership or Alpha pension:

https://www.civilservicepensionscheme.org.uk/media/95157/pco_avp_v1.pdf

As summarised above, Partnership is a DC scheme (meaning you have a pot of cash at retirement that you have saved/invested) and Alpha is a DB scheme (meaning you have a promise to pay you a guaranteed annual amount rising by CPI inflation).

I thought the default was the Alpha scheme unless you specifically chose to go into Partnership scheme, but I am no expert on such matters. Luckily there are quite a few very knowledgeable people on MSE who will be able to offer their view.

Veeno1_123

This was the advice I was given at the time and has only come to light now as mistakes have been made across the board. Thanks 

MACKEM99

Who gave you the advice?

hugheskevi

Veeno1_123 said:

I am 38 years old, have worked for the Prison Service for just over 18 years and feel I may have been placed on to the wrong Scheme.

So you joined around 2003. At that point you would have been automatically placed into the Premium pension scheme. Therefore you presumably elected to switch to Partnership on or soon after joining.

I am currently on the 'Standard Life Partnership Pension Scheme' 

This is not correct. The Partnership pension provider is now Legal and General, which changed on 1 September 2018. You may have a legacy pension with Standard Life (which is not a Partnership pension) if you decided not to switch your accrued pension over to Legal and General.

All contributions since the switch in September 2018 will have gone to Legal and General with whom you have an active Partnership pension and can log-in / register at this link.

Is it worth changing over to Alpha? Is there any action I can take etc?  I am looking at staying within the service 

You can switch back to alpha at any time you wish, subject to 2-3 months notice.

Veeno1_123

My apologies my pension is now changed to Legal & General (Previously Standard Life).

kuratowski

If you switch to Alpha now, aged 38, you still have time to build up a significant DB pension entitlement (Alpha) - one that many other regular posters on this forum would likely envy.

Equally, you by now have 18 years' accumulation of DC pension savings (Partnership, although you haven't stated its current worth) and that will have a couple of decades more to grow, and this kind of pension will give you more flexible options.

I mean it sounds a bit like the best of both worlds.

Can someone who is more expert on Civil Service Pensions state whether or not the OP's Partnership pension pot is permitted to be transferred out to a SIPP - thereby allowing drawdown, access at age 57, and so on?

Edit: I see Partnership is already accessible from age 55.

Veeno1_123

At the time it was the HR manager who advised and placed me on this scheme. This was something that seemed normal until I had seen a colleagues pay slip who was in the same position as myself .

 Thanks again and please keep the information/advice coming as the best way to move forward with this situation it’s all appreciated 👍🏻

Dazed_and_C0nfused

You should look at the PCSPS website and have a good read of all the information about both Partnership and Alpha.

Having the Partnership fund will be good for flexibility but you might want to reconsider your choice going forward.

Using the example earlier in this thread the Alpha pension, inflation proofed both before and after retirement, and paid each year from retirement age is going to mean the Partnership investments are going to have to do incredibly well to get anywhere near that level of income.