Civil Service Annual Benefit Statement (ABS) - Classic Pension

german_keeper

kassy64 said:

german_keeper said:

God knows what they are going to do with me with regards McLeod. In 2015 I went into Partnership rather than Alpha. I worked out that full drawdown of Partnership between 60 and 67 would give me about double p.a. than Alpha with 7 years AR applied. I was a bit wary of getting into investments but just went for a low risk lifestyle fund. If living to average life expectancy Alpha would have paid far more over the whole period but with a large difference in income pre and post SPA. Much lower contribution with Partnership too, which was handy at the time after 5 years of pay cuts, mortgage to pay and 3 kids still in education.

In those days the rules were a bit daft. You could only switch in April or October and couldn't switch from Classic to Partnership so I had to switch to Alpha in April 15 and then Partnership in October. I am pretty sure that was illegal too and it was changed shortly afterwards.

So from April 2015 to when I retired in August this year I have 6 months in Alpha and a DC pot with Legal and General. I took my Classic in 2019 when I went partially retired. I am still happy with my decision to join Partnership but the bottom line is if they hadn't broken the law I would have stayed in Classic until retirement. I know that because at the time I didn't even know Partnership existed; it was only the link to SPA with Alpha that caused me to investigate my options. I'm not going to get my knickers in a twist over anything but it will be interesting to see what happens next October.

Sorry I can't help you as have had no dealings with Partnership. Hopefully there will be someone along who does.
Can you send a message or email to CSP and ask the question, how they will deal with your case. Don't expect an immediate response but you may get something eventually.

Not overly concerned to be honest. They have already said that they will be leaving all the unusual cases till next October at least so I am happy just to wait. At least I expect to be able to convert the 6 months Alpha to Classic and receive a lump sum of a nice few hundred quid.

All a bit odd because even though I am happy with the situation I definitely wouldn't have left the Classic scheme had they not introduced the changes. Quite ironically, as someone who didn't get promoted since 1993, a career average scheme with CPI uprating at accrual throughout my 40 years would likely have been miles better for me than a final salary scheme. 

NedS

german_keeper said:

All a bit odd because even though I am happy with the situation I definitely wouldn't have left the Classic scheme had they not introduced the changes. Quite ironically, as someone who didn't get promoted since 1993, a career average scheme with CPI uprating at accrual throughout my 40 years would likely have been miles better for me than a final salary scheme. 

That's the thing all my colleagues who've been in the CS for 30 plus years fail to see - most on the same grade throughout and are still bemoaning how the pension isn't anywhere near as good as it used to be, but all they see is the increase in NRA and no lump sum. They do not see the higher accrual rate, or CPI uprating vs below inflation increases in salary, or understand the impacts that can have over the long term.

kassy64

NedS said:

german_keeper said:

All a bit odd because even though I am happy with the situation I definitely wouldn't have left the Classic scheme had they not introduced the changes. Quite ironically, as someone who didn't get promoted since 1993, a career average scheme with CPI uprating at accrual throughout my 40 years would likely have been miles better for me than a final salary scheme. 

That's the thing all my colleagues who've been in the CS for 30 plus years fail to see - most on the same grade throughout and are still bemoaning how the pension isn't anywhere near as good as it used to be, but all they see is the increase in NRA and no lump sum. They do not see the higher accrual rate, or CPI uprating vs below inflation increases in salary, or understand the impacts that can have over the long term.

When I left in August at 58, everyone was saying how lucky I was and that they (mostly aged in 20s 30s) wouldn’t get anywhere near the pension I was getting, but as you’ve mentioned above the career average scheme is not that bad, and I think a lot of younger workers just see that they won’t be getting the automatic 3 x pensionable pay lump sum and nothing else. 

Dazed_and_C0nfused

NedS said:

german_keeper said:

All a bit odd because even though I am happy with the situation I definitely wouldn't have left the Classic scheme had they not introduced the changes. Quite ironically, as someone who didn't get promoted since 1993, a career average scheme with CPI uprating at accrual throughout my 40 years would likely have been miles better for me than a final salary scheme. 

That's the thing all my colleagues who've been in the CS for 30 plus years fail to see - most on the same grade throughout and are still bemoaning how the pension isn't anywhere near as good as it used to be, but all they see is the increase in NRA and no lump sum. They do not see the higher accrual rate, or CPI uprating vs below inflation increases in salary, or understand the impacts that can have over the long term.

Let's hope they're not working in the Treasury or anywhere else involving maths 😳

Silvertabby

Dazed_and_C0nfused said:

NedS said:

german_keeper said:

All a bit odd because even though I am happy with the situation I definitely wouldn't have left the Classic scheme had they not introduced the changes. Quite ironically, as someone who didn't get promoted since 1993, a career average scheme with CPI uprating at accrual throughout my 40 years would likely have been miles better for me than a final salary scheme. 

That's the thing all my colleagues who've been in the CS for 30 plus years fail to see - most on the same grade throughout and are still bemoaning how the pension isn't anywhere near as good as it used to be, but all they see is the increase in NRA and no lump sum. They do not see the higher accrual rate, or CPI uprating vs below inflation increases in salary, or understand the impacts that can have over the long term.

Let's hope they're not working in the Treasury or anywhere else involving maths 😳

When the LGPS switched from 1/80th (with an automatic lump sum of 3 X pension) to 1/60th (with no lump sum)  I had many conversations with fund members who were adamant that they were being 'ripped off'.

I would explain that there was actually very little difference between the 2 rates when people took the usual option of commuting the maximum tax free cash.  However, the new accrual rate gave more flexibility to those who did prefer the bigger pension option.

If I had a £ for everytime I was told that 1/60th was less than 1/80th because 60 was less than 80.......

german_keeper

Silvertabby said:

Dazed_and_C0nfused said:

NedS said:

german_keeper said:

All a bit odd because even though I am happy with the situation I definitely wouldn't have left the Classic scheme had they not introduced the changes. Quite ironically, as someone who didn't get promoted since 1993, a career average scheme with CPI uprating at accrual throughout my 40 years would likely have been miles better for me than a final salary scheme. 

That's the thing all my colleagues who've been in the CS for 30 plus years fail to see - most on the same grade throughout and are still bemoaning how the pension isn't anywhere near as good as it used to be, but all they see is the increase in NRA and no lump sum. They do not see the higher accrual rate, or CPI uprating vs below inflation increases in salary, or understand the impacts that can have over the long term.

Let's hope they're not working in the Treasury or anywhere else involving maths 😳

When the LGPS switched from 1/80th (with an automatic lump sum of 3 X pension) to 1/60th (with no lump sum)  I had many conversations with fund members who were adamant that they were being 'ripped off'.

I would explain that there was actually very little difference between the 2 rates when people took the usual option of commuting the maximum tax free cash.  However, the new accrual rate gave more flexibility to those who did prefer the bigger pension option.

If I had a £ for everytime I was told that 1/60th was less than 1/80th because 60 was less than 80.......

Yes I remember when the Civil Service introduced the Premium pension about 2002 or so I think. The difference to Classic pension was that the accrual went to 1/60 but with no automatic lump sum. Me and a couple of colleagues who were in a similar position to me regards age and length of service went round the houses and back many times trying to work out the best option. Eventually we decided that the benefits of the 2 schemes balanced out so the extra 2% contribution to Premium wasn't worth it.

As it turned out I suspect Premium would have been much better for me with the inbuilt inflation protection but at that time we really didn't think our wages could lose over 20% compared to CPI as they did after 2010. 

OldBeanz

As someone who retired in 2016 my CS classic pension was based on my 2007 salary. The rot started  before 2010.

chubsta

I am always very interested in these threads as I am hoping to retire early in a couple of years and have been doing a million-and-one pension calculations over the last few years so I have a very good idea of my situation.
I deferred my Classic back in 2015 and as I haven't been promoted at all and have received basically no pay rises since, it appears to have been a very good idea and keeping Alpha for between 2015 and 2022 is basically 'free' money as the Classic increases due to CPI should pretty much match what I would have got for the extra years.
Speaking to my colleagues though I would agree 100% with another poster above who says to take every bit of help and advice the Department can give you - I am going on a 'pre-retirement' course in January as they have been recommended by colleagues who have left over the last few years as being very helpful - they won't talk specific finances but the systems and help available are explained well apparently.
As I said, I have researched my own particular scenario extremely deeply and a lot of colleagues come to me for help and advice and it is clear that everyones situation is different and there are no 'one answer' solutions - what works for one person would be a disaster for another.

german_keeper

OldBeanz said:

As someone who retired in 2016 my CS classic pension was based on my 2007 salary. The rot started  before 2010.

How did you manage that? I thought reckonable earnings for Classic were the best 12 months in the 3 years immediately prior to retirement.  

Regards the period 2007 to 2010, purely based on memory which could quite easily be failing me, I think I recall that if payrises were below CPI it wasn't significantly so. Although I couldn't absolutely swear to that and it may be that 2010 sticks in my mind due to the 3 year pay freeze. And of course different departments may have fared better than others through 2007 - 2010.