New to the civil service and Alpha - how do I...?

michaels

MakingUpGround said:

Presumably I would need life insurance then to fill this gap which is annoying/potentially very costly

I have life insurance exactly to fill this gap and add to pension pot for husband. I currently have life insurance and family income benefit, but I'm about to change the family income benefit to an increasing life insurance. You can also get decreasing cover which might be for you, more cover now decreasing as partner would need less if you paid into the pension pot for more future years. It might not be that expensive, I think my policies are reasonable for the security they provide 

I am thinking of spending 240k out of a sipp to purchase 20k pa alpha pension about 15 years before SPA so need to make sure DW is covered for those years.  Have 500k level term taken out when the kids were born but this will run out in a few years at which point I expect any renewal will be frighteningly more expensive. 

Spending the 240k and then dying before SPA and DW not benefiting beyond 37.5% would seem like a real down side.

Am thinking of getting a full medical before committing, anyone any experience of providers for this?

hugheskevi

Might well not be relevant, but one potential solution to consider if it fits wider plans could be to take alpha pension early with actuarial reduction. The 37.5% survivor benefits remain based on the original unreduced pension, and so would be a much higher percentage of the pension in payment. It would also bring forward the allocation decision.

michaels

hugheskevi said:

Might well not be relevant, but one potential solution to consider if it fits wider plans could be to take alpha pension early with actuarial reduction. The 37.5% survivor benefits remain based on the original unreduced pension, and so would be a much higher percentage of the pension in payment. It would also bring forward the allocation decision.

Thanks

Any advantages to purchasing EPA rather than added pension if going down this route or are the costs the same?  There is a calculator for actuarial reduction but it doesn't seem to cover Alpha so I can't see what sort of reduction would be applied.

I am limited to 50% of salary if transferring in which was the right amount at SPA but if I go the the actuarial reduction route then I may want to transfer in more - might be worth starting at 5 days per week and then reducing to my planned 4 days per week once the transfer in has been agreed - I wonder how long this might take?

hugheskevi

michaels said:

Any advantages to purchasing EPA rather than added pension if going down this route or are the costs the same?  There is a calculator for actuarial reduction but it doesn't seem to cover Alpha so I can't see what sort of reduction would be applied.

I am limited to 50% of salary if transferring in which was the right amount at SPA but if I go the the actuarial reduction route then I may want to transfer in more - might be worth starting at 5 days per week and then reducing to my planned 4 days per week once the transfer in has been agreed - I wonder how long this might take?

There would be a marginal advantage for Added Pension in that scenario - the base pension would be higher and hence survivor benefit would be higher than if you purchased EPA. However, the difference is likely to be insignificant in the context of all pension income.

Early retirement factors for alpha are at this link.

Transfers will almost certainly take a long time, even if you constantly nag both MyCSP and the exporting scheme. Anything under 4 months would be a good result.