Civil service Alpha pension (leaving)

Suzycoll

Hi all. Hope you can help 🙏
I'm a civil servant of 22 years. In 2018 I took some of my CS pension (classic) with a lump sum & monthly income. I then decreased my hours to 22 p/w & 

I am now paying in to Alpha since 2018. 
I have been offered a great job I really fancy which is WFH (I can't  WFH atm), same hours per week & similar p/t wage but not govt job. 
My only concern is my Alpha pension ! I have 9 years left in work so I am aware my pension will not be great (per month) at the end but still a DB pension. I pay 4.5% in employer pays ?

New job I pay 3% employer pays 6%

Can anyone do the math ? Struggling 😞. 
Thanks in advance 

sammyjammy

It doesn't really matter what Employer pays in now as its a DB pension,  you may only end up with 4 years alpha but you'll still have the Classic pension you have now and state pension at 66/67.

Guess it depends how much you value WFH.  Currently you have a very secure job how about the new one?

german_keeper

Currently you have a very secure job how about the new one?

Not necessarily. The wheels are in motion to reduce redundancy payments. When that is done the cull will follow.

michaels

Suzycoll said:

Hi all. Hope you can help 🙏
I'm a civil servant of 22 years. In 2018 I took some of my CS pension (classic) with a lump sum & monthly income. I then decreased my hours to 22 p/w & 

I am now paying in to Alpha since 2018. 
I have been offered a great job I really fancy which is WFH (I can't  WFH atm), same hours per week & similar p/t wage but not govt job. 
My only concern is my Alpha pension ! I have 9 years left in work so I am aware my pension will not be great (per month) at the end but still a DB pension. I pay 4.5% in employer pays ?

New job I pay 3% employer pays 6%

Can anyone do the math ? Struggling 😞. 
Thanks in advance 

Your alpha pension is worth about the same as a total employer/employee contribution of 30-35% of your salary.  So to get an equivalent pension in your new job you would need to pay 24%+ into your pension rather than the 3% minimum quoted.

NedS

michaels said:

Suzycoll said:

Hi all. Hope you can help 🙏
I'm a civil servant of 22 years. In 2018 I took some of my CS pension (classic) with a lump sum & monthly income. I then decreased my hours to 22 p/w & 

I am now paying in to Alpha since 2018. 
I have been offered a great job I really fancy which is WFH (I can't  WFH atm), same hours per week & similar p/t wage but not govt job. 
My only concern is my Alpha pension ! I have 9 years left in work so I am aware my pension will not be great (per month) at the end but still a DB pension. I pay 4.5% in employer pays ?

New job I pay 3% employer pays 6%

Can anyone do the math ? Struggling 😞. 
Thanks in advance 

Your alpha pension is worth about the same as a total employer/employee contribution of 30-35% of your salary.  So to get an equivalent pension in your new job you would need to pay 24%+ into your pension rather than the 3% minimum quoted.

I agree, your Alpha pension is worth around a third of your salary, so all things being equal you would need to earn (and contribute) around a third more in the new job to match the benefits of Alpha that you would be giving up.

What value to you place on being able to work from home? Clearly there are cost benefits (no travel). Are increased heating costs in Winter a factor, which could offset what you save in travel. Then there's the personal value of WFH.

sammyjammy

german_keeper said:

Currently you have a very secure job how about the new one?

Not necessarily. The wheels are in motion to reduce redundancy payments. When that is done the cull will follow.

I'll take a pretty educated guess that there will be less than 100 compulsory redundancy across the civil service!

NedS

sammyjammy said:

german_keeper said:

Currently you have a very secure job how about the new one?

Not necessarily. The wheels are in motion to reduce redundancy payments. When that is done the cull will follow.

I'll take a pretty educated guess that there will be less than 100 compulsory redundancy across the civil service!

Yes, voluntary exit (redundancy) exercise comes before any compulsory redundancies, and my guess is there will be people queuing up to take voluntary redundancy.

german_keeper

sammyjammy said:

german_keeper said:

Currently you have a very secure job how about the new one?

Not necessarily. The wheels are in motion to reduce redundancy payments. When that is done the cull will follow.

I'll take a pretty educated guess that there will be less than 100 compulsory redundancy across the civil service!

I'll take a very educated guess at zero compulsory redundancies. As Ned says voluntary has to be offered before compulsory and the terms are better. I am now retired and financially comfortable (one of the lucky ones) and I am aware of several people who worked in clerical grades in Preston and travelled from East Lancs, maybe 20 or 30 miles away at minimum wage who managed to get work locally (for example Aldi and Lidl paying a quid an hour more) and resigned without a pay off. Chuck a few grand redundancy payment into the equation and the generous pension suddenly doesn't look so good. Especially if you don't really understand how good it is or if you are at an age where you aren't really thinking about your pension and you have a family to feed.

The race to the bottom is alive and kicking!!

hugheskevi

german_keeper said:

I'll take a very educated guess at zero compulsory redundancies. As Ned says voluntary has to be offered before compulsory and the terms are better.

Compulsory redundancy is marginally better than Voluntary Redundancy for people with less than 12 years of service and who don't benefit from buy-out of actuarial reduction to pension. In this situation, Voluntary has 3 months of notice whilst Compulsory has 6. For someone simply wanting to stay as long as possible they may as well turn down Voluntary and move on to Compulsory, adding several months of employment prior to leaving. Granted that is a very niche population!

michaels

Out of interest, what are the pension benefits of govt vol redundancy schemes?

michaels

hugheskevi said:

german_keeper said:

I'll take a very educated guess at zero compulsory redundancies. As Ned says voluntary has to be offered before compulsory and the terms are better.

Compulsory redundancy is marginally better than Voluntary Redundancy for people with less than 12 years of service and who don't benefit from buy-out of actuarial reduction to pension. In this situation, Voluntary has 3 months of notice whilst Compulsory has 6. For someone simply wanting to stay as long as possible they may as well turn down Voluntary and move on to Compulsory, adding several months of employment prior to leaving. Granted that is a very niche population!

Presumably it might also be relevant to those who would otherwise not have 2 years of service?  I wonder how soon the schemes will be announced?  Looks like a vol scheme announced three months before you turn 55 would be a winner...