Civil Service Annual Benefit Statement (ABS) - Classic Pension

montventoux

Hi 

I have just reviewed my latest (2022) ABS and compared with last years ABS.
Looking at my particular figures for Classic it appears that the % increase on my annual pension and tax free lump sum equates to 1.91%.
In terms, of Classic Pension for active members what is the formula for indexation increases?


Kind Regards 

westv

Increases are based on salary for active members prior to the pension commencing.

montventoux

So, not based on CPI figure (September each year) as is the case for Alpha which is my other Pension wef 01/04/2015.

Dazed_and_C0nfused

montventoux said:

Hi 

I have just reviewed my latest (2022) ABS and compared with last years ABS.
Looking at my particular figures for Classic it appears that the % increase on my annual pension and tax free lump sum equates to 1.91%.
In terms, of Classic Pension for active members what is the formula for indexation increases?

Kind Regards 

There is no such increase for a Classic pension unless it's deferred.

For an active member it is based on your salary for pension purposes.

Alpha has an inflation element, the September CPI (or maybe RPI) increase from the previous year.

german_keeper

The calculation for Classic is reckonable earnings x reckonable service/80. So an increase of 1.91% on last year's ABS figure would suggest a pay increase of just under 1.91% with another 1/80 service added to the calculation. Better mathematicians than me may be able to work out a more exact figure for the increase in pay.

Alpha increases are CPI not RPI. 

montventoux

Thanks German_Keeper.  

So, let’s assume the 2022 ABS classic pension figure is £10,000 and annual pay award (from 01/08/2022) is 2.5% then the 2023 ABS classic pension figure would be £10,250?

Dazed_and_C0nfused

montventoux said:

Thanks German_Keeper.  

So, let’s assume the 2022 ABS classic pension figure is £10,000 and annual pay award (from 01/08/2022) is 2.5% then the 2023 ABS classic pension figure would be £10,250?

No.  Your Classic pension does not increase by any specific % figure.

All things being equal your pensionable pay will increase by 1.667% and your Classic pension will be recalculated based on the new pensionable pay amount.

In may be £10,166 but you really need to work it out correctly, staring with the pensionable pay and length of service details.

montventoux

Thanks Dazed_and_C0nfused fully understood 

kassy64

Bit of advice, if you're a serving civil servant (which it sounds like you are) take advantage of all the assistance available to you through your employer. I left the Civil Service recently after 41 years service and in the last 12 months or so undertook many online pension presentations which usually include an interactive Q&A session. Speak to colleagues or just have a look at the department pension guidance available to you. Also, if you are a member of a CS union they also provide pension/retirement workshops. There is a lot of guidance out there for you, it really helped me a lot. Not being rude but you really need to understand the basics and these presentations will help you and you can ask questions to experts about your particular concerns, they are very helpful. Not sure if it applies to you but the Mcleod judgement may have an impact also. Good luck

montventoux

Kassy 64 - thanks for your post.

Thanks to Dazed_and_C0nfused earlier post I now have a full understanding of how Classic pension is recalculated each year and what my expected 2023 ABS Classic pension figure will be based on my pensionable earnings.

Yes, I am impacted by the McCloud judgement having moved to Alpha on 01/04 2015 after circa 31 years in Classic.  I’m aware I will have an option of accruing a further 7 years of Classic pension benefits for period of 01/04/2015 -31/03/2022 though doing the Maths for my particular circumstances Alpha pension benefits appear to be move favourable  for this period.  That said, I will wait until I have visibility (post October 2023 I believe) of both sets of figures from my MyCSP before making my decision.

I’m now planning my Great Escape, leaving the CS this October (aged 58) after 39 years service though will defer taking my pension benefits until October 2025 (aged 60).

kassy64

montventoux said:

Kassy 64 - thanks for your post.

Thanks to Dazed_and_C0nfused earlier post I now have a full understanding of how Classic pension is recalculated each year and what my expected 2023 ABS Classic pension figure will be based on my pensionable earnings.

Yes, I am impacted by the McCloud judgement having moved to Alpha on 01/04 2015 after circa 31 years in Classic.  I’m aware I will have an option of accruing a further 7 years of Classic pension benefits for period of 01/04/2015 -31/03/2022 though doing the Maths for my particular circumstances Alpha pension benefits appear to be move favourable  for this period.  That said, I will wait until I have visibility (post October 2023 I believe) of both sets of figures from my MyCSP before making my decision.

I’m now planning my Great Escape, leaving the CS this October (aged 58) after 39 years service though will defer taking my pension benefits until October 2025 (aged 60).

I left at 58 also (started when 17). I have also done some calculations regarding the McLoud ruling and suspect that Alpha and Classic for the period 2015-2022 will be very similar. I took my pension and lump sum for both Classic and Alpha early (18 months early for Classic which made up the large part of my pension). Enjoying life and feel much healthier and happier not doing shifts and weekends and getting up at 5am was a killer. All the best. 

Ps - for info I had to take the Classic and full Alpha at retirement as the McLoud ruling won’t be completed until late 2023. Told that a retrospective quote will be issued then for me to make a decision, all very strange as I will have been taking the pension for 18 months by then. I’m hoping it will be nice and clear as to which option is the most beneficial. For me it will be stay as I have been receiving or revert to Classic.