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

chubsta

hugheskevi said:

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%.

Thanks very much for both bits of info, time to redo my calculations!

michaels

hugheskevi said:

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%.

Thanks HK. Have been waiting for this. Will have a play on pc in a bit. Do they match the updated lgps ones?

hugheskevi

michaels said:

hugheskevi said:

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%.

Thanks HK. Have been waiting for this. Will have a play on pc in a bit. Do they match the updated lgps ones?

The LGPS factors appear to have a slightly larger reductions.

michaels

hugheskevi said:

michaels said:

hugheskevi said:

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%.

Thanks HK. Have been waiting for this. Will have a play on pc in a bit. Do they match the updated lgps ones?

The LGPS factors appear to have a slightly larger reductions.

For me for 12 years early it is showing 43.2% reduction vs 45.2% in the previous/current tables (and 41.8% in the LGPS tables)

It is a shame it is not possible to buy out the reduction using a DC pot

chubsta

hugheskevi said:

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%.

If you don’t mind would you be able clarify the bit about the lump sum - I was under the impression that the lump sum was basically just 3x the pension, so if I went at npa of 60 for classic and the pension was for example £20,000 then the lump sum was £60,000, and that if I went earlier at 57 and 9 months that the pension would be reduced accordingly - to 90.6% according to the figures you have kindly worked out for me. And therefore that the lump sum would be just 3x the adjusted pension, is that not the case?

hugheskevi

chubsta said:

hugheskevi said:

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%.

If you don’t mind would you be able clarify the bit about the lump sum - I was under the impression that the lump sum was basically just 3x the pension, so if I went at npa of 60 for classic and the pension was for example £20,000 then the lump sum was £60,000, and that if I went earlier at 57 and 9 months that the pension would be reduced accordingly - to 90.6% according to the figures you have kindly worked out for me. And therefore that the lump sum would be just 3x the adjusted pension, is that not the case?

It is 3 times salary if taken at normal pension age, but if taken early the pension and the lump sum are reduced by different factors - I don't know why, just the way it is.