CSPS Classic - acturial reduction

hildasmuriel

I have a small Classic pension built up from my long-ago days as a Civil Servant (1985-1998). NRA is 60

A couple of years ago I started playing with figures to see if I could afford to retire at 58 and emailed CSPS to ask for the amount I would get at 58.

They sent me an annual statement as a reply.
I asked again and they sent me a web link to a 404 page not found
Third time of asking, they sent me another annual statement
Then a link to website for current members only
Then another statement

Before I had enough statements to wallpaper my house, I escalated my query and eventually got sent a spreadsheet which I could use to estimate my amount.

Forward to now, when the big day is getting closer and I want to have some firm figures and I'm starting to wonder if I should trust the spreadsheet formula (in view of the earlier cocks-ups)

So - here's the question (finally) ..... does this seem right?

£5061 at 60   =   £4605 at 58    pension
£15184 at 60 =   £14500           lump sum

TIA

Dazed_and_C0nfused

Doesn't look obviously wrong

~9% reduction in pension for the benefit of having it paid 2 years longer seems about right.

I seem to remember taking a reduced pension doesn't impact the PCLS to quite the same degree but not 100% sure of this.

german_keeper

If you google something like "classic pension actuarial reduction" you will see the reduction factors. Pages 28 and 29 are the ones to look at I think (double check) and the factors look to be 0.91 for pension and 0.955 for lump sum. This assumes taking benefits at exactly 58; they are listed monthly so for example 58 and 1 month factors would be slightly higher.

ToneP

I researched the exact same thing a few years ago. Their reply was ".....If you wish to take your pension early, you can use the figures provided on your statement alongside the ‘Actuarially Reduced Pension Buy-out calculator’ on the Pension Scheme website: www.civilservicepensionscheme.org.uk/members/member-calculators". 

The one you need to use is the Early Retirement Buy Out calculator. Download the spread sheet and you can then model different dates. The relevant guidance document is here  https://www.civilservicepensionscheme.org.uk/media/g53hkoj5/early-and-late-retirement-factors-and-guidance-pcsps.pdf

I'd suggest waiting a few weeks until the annual increase from Sep 2022 inflation has been applied and then ask for an up to date statement with that applied. Failing that you could adjust your 2022 statement figures by +10.1% and you'd be pretty much on the money.

Hope that helps.