Effect of Civil Service Pension opt out on Civil Service Compensation Scheme

njtt

I wonder if anyone could help me? I am 60 in December this year. I joined the Civil Service (and the Classic Scheme) in September 2000 and have been with the same employer since then.  On 1 October 2020 I was transferred into Alpha. In May 2022 I opted out of the Civil Service pension scheme (PCSPS). My reason for opting out is that 95% of my pension has built up under Classic on a final salary pension. While my salary is unlikely to increase much, inflation is likely to be very high and so it made sense to preserve the pension to rise in line with inflation - recognising that there are a lot of unknown variables.

What I want to understand is the impact of this opting out on any application for voluntary exit under the (to be revised) Civil Service Compensation Scheme (CSCS). In particular:

1. If I am opted out from the PCSPS, am I also opted out of the voluntary exit schemes in the CSCS? Am I out of scope for voluntary exit payments? Is there any discretion?

2. If I am, it may make sense to opt back in. What would be the impact of opting back in vis a vis any exit terms? Voluntary exit terms are based on length of qualifying or reckonable service but would my length of service be carried back to when I first joined (2020) or when I opted back in (2022)? In other words, does the opt out somehow 'break' the length of service for voluntary exit? Again, is there any discretion?

3. And if I opt back in , what would be the the impact on my pension? I had thought originally that I would have a 'preserved' pension (up to May 2022) and then a new pension - but when I asked Mycsp they said - "If you decide to opt back in within 5 years your service will be linked and you will only have one award when you leave." Presumably my pension would then be based on my final salary when I eventually leave (with a 'gap' for the period of opt out but otherwise the same as before).

What I am worried about is that I opt back in to be within scope of CSCS but then fine that I lose the benefit of getting inflation-linked increases to a preserved pension and also do not qualify for exit payments based on 20 years service (if they say the link is broken).

Can anyone help?

Thank you!

Marcon

njtt said:

I wonder if anyone could help me? I am 60 in December this year. I joined the Civil Service (and the Classic Scheme) in September 2000 and have been with the same employer since then.  On 1 October 2020 I was transferred into Alpha. In May 2022 I opted out of the Civil Service pension scheme (PCSPS). My reason for opting out is that 95% of my pension has built up under Classic on a final salary pension. While my salary is unlikely to increase much, inflation is likely to be very high and so it made sense to preserve the pension to rise in line with inflation - recognising that there are a lot of unknown variables.

What I am worried about is that I opt back in to be within scope of CSCS but then fine that I lose the benefit of getting inflation-linked increases to a preserved pension and also do not qualify for exit payments based on 20 years service (if they say the link is broken).

I wonder if your reasoning is quite right in respect of opting out? I take the point about increases to your preserved pension being higher than salary increases, but by opting out you are also giving up future periods of pensionable service, which might improve your pension more than inflationary increases on a deferred pension. You may well have done the sums and that's not the case, in which case apologies for flagging something you've already worked through.