Civil Service My CSP Modeller - help please.

Littletinks

Hello, I’m wondering if anyone is able to help me here please, and knows the answer to what I had hoped would be a straightforward question, but I’m going round in circles with My CSP and want to make sure I understand for certain how the online retirement modeller works, but have received the same response back twice which isn’t really helpful. 

My question is, if in theory, I resigned today and therefore made no further contributions at all to my Civil Service pension, is the retirement modeller on MY CSP estimating roughly what I may receive at the retirement date I enter in the modeller, based on the information it already holds from my 21/22 benefit statement? OR is the modeller assuming I will work up to the ‘date of retirement I enter’ and automatically calculating £x of additional contributions between now and the ‘date of retirement’ based on my current salary and working pattern. My thoughts are it’s the former but would like to know for certain which it is as this may make a significant impact on my future retirement planning.

MY CSP have said The retirement modeller uses your current working pattern and salary to estimate what your benefits maybe on your chosen retirement date. Which in my mind at least could be read either way. 

Thank you for reading.

Bravepants

If you "resigned today and made no further contributions at all" your benefits would remain as stated on your 21/22 benefit statement adjusted for what you have "contributed" since the date of your statement. It would also be uplifted by CPI (inflation) every year until you take the benefits.

 

Why do you need to use the modeller in the situation that you resign today?

Littletinks

Thank you so much for replying @Bravepants and for the clarification. 

I’m some years off being able to take my pension, so was trying to estimate what my potential pension might look like if retired in X amount of years. I can work this out long hand though, as Alpha is 2.32% of salary, then previous Septembers CPI added to over all Alpha pension pot but I was looking see if the modeller might help calculate this when looking at different options given the unknown values of CPI over the coming years. I’ll calculate with a conservative 2% each year post 2023, albeit I suspect it will be higher than that for next few years, but better to under estimate at the stage. Thanks again. 

MX5huggy

The best thing about Pensions such as this is you don’t need to do inflation modelling. If your statement says you will get £14000 or whatever that is in today’s money and will go up with inflation so you don’t need to think about it. 

Littletinks

Thank you for your response  @MX5huggy.  That’s a very good point. Whilst the actual figure will go up over time, the buying power (with no additional contributions made by myself) would remain the same as current figures show now. 

Golactico

Littletinks said:

Hello, I’m wondering if anyone is able to help me here please, and knows the answer to what I had hoped would be a straightforward question, but I’m going round in circles with My CSP and want to make sure I understand for certain how the online retirement modeller works, but have received the same response back twice which isn’t really helpful. 

My question is, if in theory, I resigned today and therefore made no further contributions at all to my Civil Service pension, is the retirement modeller on MY CSP estimating roughly what I may receive at the retirement date I enter in the modeller, based on the information it already holds from my 21/22 benefit statement? OR is the modeller assuming I will work up to the ‘date of retirement I enter’ and automatically calculating £x of additional contributions between now and the ‘date of retirement’ based on my current salary and working pattern. My thoughts are it’s the former but would like to know for certain which it is as this may make a significant impact on my future retirement planning.

MY CSP have said The retirement modeller uses your current working pattern and salary to estimate what your benefits maybe on your chosen retirement date. Which in my mind at least could be read either way. 

Thank you for reading.

Sorry to throw a spanner in the works, but I'm very familiar with the MyCSP modeller and it most definitely reflects the latter of the scenarios you mention in your post. To be clear, I am 55. If I put the slider on the modeller onto age 60, the results it will give will be an estimate based on me remaining in the Civil Service until my 60th birthday. I wish it were your first suggested scenerio - I'd leave work tomorrow and get any old job for 5 years, safe in the knowledge that I'd be extremely comfortably off at age 60!

I too would find it useful to have a projection based on a 'preserved award' (i.e. your pension benefits at the point you leave the Civil Service prior to the scheme's normal pension age). It would be great to be able to set a leaving date (say age 56), set the retirement age to age 60, then set the annual inflation assumption figure to say 2%, and then be told what pension benefits you would be looking at at age 60, based on your preserved award at age 56. As you say, simple enough to do the sums but a modeller is supposed to save you the bother. I have even written to MyCSP to suggest a facility for showing a projection for a preserved award, but that was over a year ago and it evidently hasn't happened.

Bravepants

Golactico said:

Littletinks said:

Hello, I’m wondering if anyone is able to help me here please, and knows the answer to what I had hoped would be a straightforward question, but I’m going round in circles with My CSP and want to make sure I understand for certain how the online retirement modeller works, but have received the same response back twice which isn’t really helpful. 

My question is, if in theory, I resigned today and therefore made no further contributions at all to my Civil Service pension, is the retirement modeller on MY CSP estimating roughly what I may receive at the retirement date I enter in the modeller, based on the information it already holds from my 21/22 benefit statement? OR is the modeller assuming I will work up to the ‘date of retirement I enter’ and automatically calculating £x of additional contributions between now and the ‘date of retirement’ based on my current salary and working pattern. My thoughts are it’s the former but would like to know for certain which it is as this may make a significant impact on my future retirement planning.

MY CSP have said The retirement modeller uses your current working pattern and salary to estimate what your benefits maybe on your chosen retirement date. Which in my mind at least could be read either way. 

Thank you for reading.

Sorry to throw a spanner in the works, but I'm very familiar with the MyCSP modeller and it most definitely reflects the latter of the scenarios you mention in your post. To be clear, I am 55. If I put the slider on the modeller onto age 60, the results it will give will be an estimate based on me remaining in the Civil Service until my 60th birthday. I wish it were your first suggested scenerio - I'd leave work tomorrow and get any old job for 5 years, safe in the knowledge that I'd be extremely comfortably off at age 60!

I too would find it useful to have a projection based on a 'preserved award' (i.e. your pension benefits at the point you leave the Civil Service prior to the scheme's normal pension age). It would be great to be able to set a leaving date (say age 56), set the retirement age to age 60, then set the annual inflation assumption figure to say 2%, and then be told what pension benefits you would be looking at at age 60, based on your preserved award at age 56. As you say, simple enough to do the sums but a modeller is supposed to save you the bother. I have even written to MyCSP to suggest a facility for showing a projection for a preserved award, but that was over a year ago and it evidently hasn't happened.

Shame we can't do algebra in MSE forums. but .....

Benefits_at_60 =  Benefits_at_56 * (100% + InflationPercent) ^ (Num_Years_To_Retirement)

Where:

"^" = to the power of, for example 3 squared is 3 ^ 2 = 9

You can of course change leaving date, assumed inflation and what you have called "Retirement Date", but I think you mean year of starting to take deferred benefits.

You can type the above into a calculator. I have this computation set up in Excel. You can also do it annually by changing InflationPercent each year and running the calculation down a column.

An example, Matt Hancock leaves the Government to start a glittering career in the entertainment industry. He leaves his job at age 44, having accrued an Alpha pension of £10,000 per year by that age.

He decides to take is differred benefits at his normal retirement age (NRA) of 67:

Benefits_at_67 = 10000 * (100% + 2%)^23 = £15768

We've assumed a rather optimistic value of 2% CPI for each of those years. This could be a reasonable assumption becasue the BoE target is 2%. But in any case as MX5huggy says inflation doesn't matter, as what you will get WILL be reflected by today's buying power.

Now, if he were to try to take his pension earlier than NRA he would also need to multiply the final amount by an actuarial reduction factor, for which tables are available from MyCSP as downloadable PDF files.

These calculations are indeed missing from the modeller and I have myself raised this issue with my own pension representative at my employer AND MyCSP. But you can certainly do the job manually.

Golactico

Quote:
You can of course change leaving date, assumed inflation and what you have called "Retirement Date", but I think you mean year of starting to take deferred benefits.
Unquote

Yes, I do of course mean 'year of starting to take deferred benefits'. However, I used the term "retirement age" as that is what the existing modeller (unhelpfully) refers to.    

Littletinks

@Golactico the modeller you describe is exactly what is needed and hopefully MyCSP will add these functions soon, perhaps as part of the McCloud updates. 

@Bravepants your example did make me laugh, thanks again for your help on this