Change to cost of voluntary pension benefits and early retirement in public sector

michaels

jsinc said:

Some updated LGPS info here: https://lgpsregs.org/schemeregs/actguidance.php

They basically say for most things (added pension, early retirement factors) use the old rates - does this mean the rates are not going to change after all or that they just haven't updated them yet?

Silvertabby

michaels said:

jsinc said:

Some updated LGPS info here: https://lgpsregs.org/schemeregs/actguidance.php

They basically say for most things (added pension, early retirement factors) use the old rates - does this mean the rates are not going to change after all or that they just haven't updated them yet?

It means 'watch this space'.

jsinc

michaels said:

They basically say for most things (added pension, early retirement factors) use the old rates - does this mean the rates are not going to change after all or that they just haven't updated them yet?

As @Silvertabby says.

The 'June 2023 Transitional measures' doc linked on the LGPS page uses wording such as "Suspend until new factors are issued" or "Suspend for now. When new factors issued..." for a number of scenarios.

chubsta

Looking at a different post it appears the new % reduction rates may have been published but I can't seem to find them anywhere - anyone have a link at all?

jsinc

chubsta said:

Looking at a different post it appears the new % reduction rates may have been published but I can't seem to find them anywhere - anyone have a link at all?

For LGPS it's https://www.lgpsmember.org/your-pension/planning/taking-your-pension/#early-retirement-reductions

Universidad

hugheskevi said:

There should be updated factors online however, among with an updated calculator to assess impact before statements however.

In retrospect it looks like that "should" was doing a lot of heavy lifting, but coming back to this a few months later, it's still a really useful thread.

Universidad

Update - details in this thread, but the Added Pension calculator for Civil Service Alpha for 2024 is now available.

@NedS if we're very lucky we might get more pension from this year's Added Pension purchase than the discount rate change implied.  Fingers crossed.

hugheskevi

Quick update to note that the updated early retirement factors for the Civil Service pension scheme are available on the site - albeit in a not very user-friendly way.

The calculator for employers to calculate the cost of redundancy payments has been updated with the new factors, and if you enter fictitious age and pension details you can see the actuarial reduction factor for a pension of a particular age in any of the schemes. Note, the calculator doesn't cover EPA purchases, so doesn't work for anyone who has purchased EPA. It is also an Excel sheet, so you need to be able to edit Excel workbooks on your device for it work. Clicking the link at the start of this paragraph will download the sheet from the website (rather old-fashioned...)

As an example of the impact of the change, the reduction in pension for taking Premium (Normal Pension age=60) at age 55 has improved from being reduced to 79.4% before the change to now being reduced to 80.6%.

chubsta

Does this mean that when I retire early in a few months that the new figures will be applied or will I miss out if the new tables have not been published by that point?
Would someone be able to work out the reduction factors for me - I am going at 57 and 9 months so would be interested to know what the impact would be on my classic (NPA 60) and alpha (NPA 67) - unfortunately I have tried opening the file on an online site but for some reason it doesn't work!

hugheskevi

chubsta said:

Does this mean that when I retire early in a few months that the new figures will be applied or will I miss out if the new tables have not been published by that point?

The new figures are already in use and being applied to pension commencements.

Would someone be able to work out the reduction factors for me - I am going at 57 and 9 months so would be interested to know what the impact would be on my classic (NPA 60) and alpha (NPA 67) 

Classic pension would be reduced to 90.6% and lump sum reduced to 96.4%.

Alpha reduced to 63.5%.