Minimum amount to transfer to lock in Civil Service Alpha in under 2 years?

Universidad

Very specific question I'm afraid - perhaps someone can help me?

I've recently left the University sector after pension cuts this year. After seeing how rough my retirement was looking, I've joined the civil service with an aim to fix that.

I'm overpaying on my civil service pension a lot, to try and get back on track. 

But I'm slightly worried that my pension benefits aren't locked in for 2 years and I might end up just getting my contributions back if I get hit by redundancies.

I was looking to transfer my USS pension, but the valuation from USS is so low that it probably isn't worth doing.

I've got a much older pension I can transfer in with a CETV of - genuinely - only about 1000 pounds.

Would completing such a small transfer mean I can relax that my civil service pension would be deferred even if I had to leave in under 2 years?

Marcon

Universidad said:

Very specific question I'm afraid - perhaps someone can help me?

I've recently left the University sector after pension cuts this year. After seeing how rough my retirement was looking, I've joined the civil service with an aim to fix that.

I'm overpaying on my civil service pension a lot, to try and get back on track. 

But I'm slightly worried that my pension benefits aren't locked in for 2 years and I might end up just getting my contributions back if I get hit by redundancies.

I was looking to transfer my USS pension, but the valuation from USS is so low that it probably isn't worth doing.

I've got a much older pension I can transfer in with a CETV of - genuinely - only about 1000 pounds.

Would completing such a small transfer mean I can relax that my civil service pension would be deferred even if I had to leave in under 2 years?

If you've been in the civil service pension scheme for at least 3 months but less than 2 years, you can choose to transfer out all your benefits (not just your own contributions) to another pension scheme.

If you transfer in benefits from any personal pension, however small the amount, then you get 'vesting' (i.e. the right to a deferred pension) immediately.

Normally, if you transfer in benefits from another occupational scheme (and a previous DB scheme will come into that category), it is the combined length of pensionable service in both schemes that counts, not the actual amount transferred.  If you had (say) 7 months of service in your old scheme, you'd need to have 17 months of civil service scheme membership to reach the magic 2 years - I think! I'm hoping someone will have had more luck checking that than I did - that certainly used to be the case with such schemes. Apologies for not giving a conclusive answer on this point, but I'm sure someone else will be able to confirm or correct me.

Universidad

Marcon said:

 Apologies for not giving a conclusive answer on this point, but I'm sure someone else will be able to confirm or correct me.

Thanks Marcon, that's super helpful, it gives me a reference point for looking into it a little deeper!

hugheskevi

Any transfer in of any amount will do what you want. 

However, transfers in tend to be unnecessarily long and drawn out which may be frustrating for a small amount 

But if you have patience, you may as well get the ball rolling ASAP by contacting MyCSP to get a transfer in quote - it doesn't commit you to anything. Note that you will probably have to chase either or even both administrators throughout the process, which will take months.

michaels

I joined late April and my transfer in completed mid November although I don't think they were able to start until early June as it was not until end of May that my pension got set up in the system.

Not sure if you transfer in in this FY you get the full annual inflation uplift applied to the whole transfer amount?

horsewithnoname

Universidad said:

Very specific question I'm afraid - perhaps someone can help me?

I've recently left the University sector after pension cuts this year. After seeing how rough my retirement was looking, I've joined the civil service with an aim to fix that.

I'm overpaying on my civil service pension a lot, to try and get back on track. 

But I'm slightly worried that my pension benefits aren't locked in for 2 years and I might end up just getting my contributions back if I get hit by redundancies.

I was looking to transfer my USS pension, but the valuation from USS is so low that it probably isn't worth doing.

I've got a much older pension I can transfer in with a CETV of - genuinely - only about 1000 pounds.

Would completing such a small transfer mean I can relax that my civil service pension would be deferred even if I had to leave in under 2 years?

Why are you concerned about redundancy? If it’s the political talk about reducing the CS then it’ll probably be via ‘natural wastage’, or not replacing people who leave. They don’t like paying redundancies, cheaper to just let people go and not replace them. 

p00hsticks

horsewithnoname said:

Universidad said:

Very specific question I'm afraid - perhaps someone can help me?

I've recently left the University sector after pension cuts this year. After seeing how rough my retirement was looking, I've joined the civil service with an aim to fix that.

I'm overpaying on my civil service pension a lot, to try and get back on track. 

But I'm slightly worried that my pension benefits aren't locked in for 2 years and I might end up just getting my contributions back if I get hit by redundancies.

I was looking to transfer my USS pension, but the valuation from USS is so low that it probably isn't worth doing.

I've got a much older pension I can transfer in with a CETV of - genuinely - only about 1000 pounds.

Would completing such a small transfer mean I can relax that my civil service pension would be deferred even if I had to leave in under 2 years?

Why are you concerned about redundancy? If it’s the political talk about reducing the CS then it’ll probably be via ‘natural wastage’, or not replacing people who leave. They don’t like paying redundancies, cheaper to just let people go and not replace them. 

You're actually perhaps bolstering the OP's fears, as you are only entitled to redundancy once you;ve worked for an employer for at least two years, so when considering the costs involved in reducing the workforce it would be cheaper for the CS to simply let those with less than two years service go than to have to pay redundancy to those with longer service.

Wher the OP's fears are unfounded is that if they did end up leaving before serving two years, they'd come away with only a refund of their own contributions. There is also an option in such cases to to get a lump sum of both the employees and (nominal) employers contributions transfered into a SIPP. (At least there was around five years ago when I ended up doing exactly that, and got a much higher amount back than I had personally paid in).

NedS

@Universidad Do you have a permanent contract, or are you on a fixed term contract? Not that it really makes much difference, but if it's permanent then hopefully that reduces the risks of termination/redundancy. I agree that we are unlikely to see arbitrary redundancies now the Government has stepped back from the figure of reducing the CS by 91,000 employees. Any reductions are more likely to be restricted to natural wastage and those affected by closures of specific sites.

Further, does purchase of added pension give you vested rights? I don't think you can purchase added pension unless you have at least 12 months in Alpha, but presumably you could make a lump sum payment in month 13 to purchase a small amount of added pension if that affords you vested rights, and effectively halve the 2 year period for you.

@p00hsticks states above, I believe you can transfer your CS pension to another scheme as receive both your employee and employer contributions rather than opting merely for a refund of your own personal contributions.

Universidad

NedS said:

 does purchase of added pension give you vested rights?

Pretty sure it does not, that's one part of the equation that's made clear on the website. They specifically call out EPA and Added Pension as things that don't give you a right to a deferred pension, though you do get an appropriately higher value if you transfer out.

They say "unless you have two years’ qualifying service (or have brought a transfer in from a personal pension) you are not entitled to a preserved pension in alpha."

Probably depends on what a "personal pension" is in this case. Marcon differentiated this from an occupational scheme, but I can't find any clarification with the civil service.

If I'm able to progress the USS transfer I might just do that anyway, even if the final package doesn't look quite as good. I had 15+ years in that, and It's set to lose some of its preserved value in April, versus having it in the Civil Service Scheme, due to the inflation cap.

p00hsticks said:

Wher the OP's fears are unfounded is that if they did end up leaving before serving two years, they'd come away with only a refund of their own contributions.

I'd forgotten about that, but it does make sense, and would take some of the sting out.

But I've basically changed my entire career path just so I can retire one day, and the civil service is the gold standard in DB pensions as far as I can tell, so I don't want to end up with an investment pot with more risk. I'm buying insurance for my old age more so I can relax a bit, more than I'm planning a retirement per se.

Ideally I'd lock in a package that would keep me off the breadline in my old age and then stop caring about pensions for a decade or two... though I will say that this forum has been eye opening, and I will probably overcontribute to the civil service scheme for only a few years and then put money into a SIPP so I can retire earlier without so much actuarial reduction.