Civil Service Classic/Alpha Actuarial Reduction tables

chubsta

As I am retiring early my pension will be actuarially reduced and I have the tables (published in 2019 I believe) to allow me to calculate this. However, I have seen reference in a post here (which I can't find now!) that there may have been a revaluation of the figures and that at least some (I think for the LGPS) have now been published which show slight reductions in the percentages lost when retiring early.

So, two questions, will these changes likely also apply to the Alpha and Classic pension schemes, and if so are there tables available with the new figures, preferably showing it in monthly terms as I go at 57 and 9 months rather than a full year.?

Thanks for any and all advice as always!

westv

When I've wanted a rough idea of any potential reduction for my wife if she retired early, I've used the online retirement modeller rather than the reduction tables. This allows a specific retirement date to be used.

chubsta

westv said:

When I've wanted a rough idea of any potential reduction for my wife if she retired early, I've used the online retirement modeller rather than the reduction tables. This allows a specific retirement date to be used.

Thanks for the quick reply, unfortunately the modeller isn't much use to me as my Classic was deferred in 2015 and does not calculate correctly.

westv

chubsta said:

westv said:

When I've wanted a rough idea of any potential reduction for my wife if she retired early, I've used the online retirement modeller rather than the reduction tables. This allows a specific retirement date to be used.

Thanks for the quick reply, unfortunately the modeller isn't much use to me as my Classic was deferred in 2015 and does not calculate correctly.

Ok but weren't most people's Classic deferred in 2015?

chubsta

I don't think so, although many did - there was an option of leaving the Classic for 28 days and then going back into it for a month before the transfer the Alpha. This meant that the service up until the end of January 2015 was preserved and subsequently subject to CPI increases each year - I get a yearly Classic statement which shows the increases applied according to CPI whereas the modeller only shows once month of Classic, it makes a massive difference as due to low/no pay rises in the intervening years my Classic has gone up by far more than it would do if taken as 'extra years' if you know what I mean?

westv

Ah ok. My wife just transferred to Alpha from Classic in 2015 (like many others) so her Classic pension is still fixed to her current salary - which has hardly increased at all. 
I'm not aware of her being offered any options at the time.

chubsta

Unfortunately we heard about it very last minute with just a couple of days to go, through 'word of mouth'. Of course, there was no official guidance or notification of it (I wonder why?!). It was a bit of a risk at the time as we had no idea of knowing what the future would bring but as there hasn't really been any increases in wages then if you didn't get promoted between then and now it was a good idea.

hugheskevi

chubsta said:

However, I have seen reference in a post here (which I can't find now!) that there may have been a revaluation of the figures and that at least some (I think for the LGPS) have now been published which show slight reductions in the percentages lost when retiring early.

The thread is at this link.

So, two questions, will these changes likely also apply to the Alpha and Classic pension schemes, and if so are there tables available with the new figures, preferably showing it in monthly terms as I go at 57 and 9 months rather than a full year.?

The changes will apply to alpha and classic once the factors are updated. When they are published, they will be at this link. The new figures will show monthly terms.

westv said:

Ok but weren't most people's Classic deferred in 2015?

When people moved to the new career average schemes they remained active members of their old schemes, not deferred. Their final salary remained linked to their salary but they ceased to accrue further qualifying years. Added Pension and Additional Year contracts in the old scheme also continued.

chubsta said:

Unfortunately we heard about it very last minute with just a couple of days to go, through 'word of mouth'. Of course, there was no official guidance or notification of it (I wonder why?!). It was a bit of a risk at the time as we had no idea of knowing what the future would bring but as there hasn't really been any increases in wages then if you didn't get promoted between then and now it was a good idea.

A pension scheme could be on very dubious grounds in relation to inducing opt-out under automatic enrolment rules if it were to embark on an exercise to inform members that they should consider opting out to game the rules. Many members would probably also consider it advice. So I would be very surprised if any scheme decided to do something like that. I know some unions did however publicise this information.

Cases like this could be more difficult to process under the 2015 Remedy roll-back should a member now argue under a contingent decision case that they would not have left had it not been for the introduction of the 2015 scheme.

kassy64

chubsta said:

I don't think so, although many did - there was an option of leaving the Classic for 28 days and then going back into it for a month before the transfer the Alpha. This meant that the service up until the end of January 2015 was preserved and subsequently subject to CPI increases each year - I get a yearly Classic statement which shows the increases applied according to CPI whereas the modeller only shows once month of Classic, it makes a massive difference as due to low/no pay rises in the intervening years my Classic has gone up by far more than it would do if taken as 'extra years' if you know what I mean?

Hi Chubsta, I also did this, came out of the scheme for 28 days prior to joining Alpha. My Classic pension was not then linked to my final salary as we were being hit with cuts to allowances (did you work shifts for the Home Office by any chance?) it made sense and as you say it increased by CPI every year. I retired 2 years early with an actuarial reduction. I did have the reduction rates somewhere, I think mine was reduced by about 9.something % for going 2 years early. When I retired the MyCSP got in all sorts of a jumbled up mess and I ended up telling them, how my pension should look, they tried to pay me twice for the service period 1982-2015. Ended up getting it right in the end and as it turned out leaving for 28 days back in 2015 worked out well as allowances continued to be cut plus minimal pay increases after that date.

The advice below is incorrect as long as you had the 28 day gap out of the pension then the link to your final salary (when you eventually retire) was lost (your final salary was used at the point you had the 28 day gap and linked to CPI from that point ie salary at 2015), and you signed a disclaimer stating that you were aware of the steps you were taking. That's why we did it as we were on decent allowances (being reduced rapidly) and as long as no promotion it was probably the right call (was for me anyway). All the best and good luck

When people moved to the new career average schemes they remained active members of their old schemes, not deferred. Their final salary remained linked to their salary but they ceased to accrue further qualifying years. Added Pension and Additional Year contracts in the old scheme also continued.

kassy64

When people moved to the new career average schemes they remained active members of their old schemes, not deferred. Their final salary remained linked to their salary but they ceased to accrue further qualifying years. Added Pension and Additional Year contracts in the old scheme also continued.

Just to clarify, above is what would happen if you did not opt out for at least 28 days, however if you did opt out then the final salary link was lost.

chubsta

Hi, yes I was, and still am, a shift worker, and any absolutely minimal pay-rises we got were completely taken out by drops in allowances, although our shifts never changed! Looking at my figures, due to the large increase in CPI over the last two years it has increased my Classic to the point that my Alpha is effectively a 'free' pension, and as I was not interested in promotion it was a very good decision to have made. I am lucky in being part of the Golden generation who were in Classic long enough to get a decent pension and lump sum put aside when the switch happened in 2015.

I am dreading dealing with MyCSP but I do have full records of everything going back to 2009, spreadsheets showing what I should be getting according to CPI uplift expected next April, as well as actuarial reductions figures, hence my interest in making sure they are up-to-date.

Knowledge is power and having seen many of my colleagues have problems but also absolutely no idea of what they should be getting has really focussed my mind.