Civil Service Classic/Alpha Actuarial Reduction tables

Universidad

chubsta said:

Miser1964 said:

IMHO anyone in the age-group transitioned/tapered onto Alpha will likely be better off electing to roll-back onto Classic/Classic Plus once the McLeod judgement details come out.

Not necessarily - in my case I am thousands of pounds better off by keeping my Classic as-was and being on Alpha since 2015. 
The important thing is doing the maths and understanding everything, I have seen too many people have literally no idea of what their pensions will be.

It's not a matter of pure mathematics, though - some of it is still speculation. 

My wife has a teachers pension, and we've used the calculators and done some of our own maths, and it looks very much like she'll come out ahead sticking with the new CARE scheme over the old final salary one - by a few hundred pounds a year.

However, we're going to hook everything in to the final salary scheme anyway, because it has a protected retirement age of 60, and we don't trust the SPA that the CARE scheme is tied into not to rise, irrespective of changes in life expectancy. 

It's one lever the government can use to devalue their pension obligations, and we think there'll be more of that to come. But - as I say - that is speculation.

german_keeper

I think the point being made is that with Alpha a combination of the almost double accrual rate and CPI link at accrual, versus the way below CPI pay "rises" since 2015 which will likely continue for many years to come and which will influence the final salary for Classic, make Alpha better for many if retiring at 60 even with 7 years AR. So no need for speculation about govt increasing SPA.

Promotion(s) will of course potentially improve the Classic picture.

The numbers may of course be different with TPS, I don't know enough about the 2015 changes to that scheme. But I assume TPS is the same as Civil Service in that the decision is only made at retirement age and the details of both options will be clearly (hopefully) explained. 

Yorkie1

german_keeper said:

I think the point being made is that with Alpha a combination of the almost double accrual rate and CPI link at accrual, versus the way below CPI pay "rises" since 2015 which will likely continue for many years to come and which will influence the final salary for Classic, make Alpha better for many if retiring at 60 even with 7 years AR. So no need for speculation about govt increasing SPA.

Promotion(s) will of course potentially improve the Classic picture.

The numbers may of course be different with TPS, I don't know enough about the 2015 changes to that scheme. But I assume TPS is the same as Civil Service in that the decision is only made at retirement age and the details of both options will be clearly (hopefully) explained. 

I agree. 

I'm 52 and had about 20 years in Classic up to 2015, then Alpha since then.

My aim is to retire at 60, then take Alpha at 65 (EPA +2 from this year onwards when I got my EPA backside into gear). 

I had assumed that taking the McCloud period (up to 2022) as Classic would be best, but looking at the maths so far, my salary has gone up at such a slow rate, compared to the Alpha CPI inflation, it may well be better for me to stay in Alpha for the whole period, take reduction for the non-EPA years at age 65, and look to fund the years from age 60 - 65 in another way.

Just need to get my AVC backside into gear now!

Mr_Countdown

Hi. Just wondered if anyone had any thoughts on my situation.  

I’ve worked all my career in the civil service for 35 years up until April 2022. Like most I was moved from Classic to Alpha in 2015. Didn’t get any more promotions in the last 15 years of work. I’m 55 now and am using money from my AVC pension for a few years till it’s used up. I then plan to take all of my deferred civil service pension at aged 57 or 58. 

With the above information and the forthcoming McCloud judgement does anyone know if I would be better off taking it all as Classic or part Classic and part Alpha?
Many thanks. 

kassy64

Mr_Countdown said:

Hi. Just wondered if anyone had any thoughts on my situation.  

I’ve worked all my career in the civil service for 35 years up until April 2022. Like most I was moved from Classic to Alpha in 2015. Didn’t get any more promotions in the last 15 years of work. I’m 55 now and am using money from my AVC pension for a few years till it’s used up. I then plan to take all of my deferred civil service pension at aged 57 or 58. 

With the above information and the forthcoming McCloud judgement does anyone know if I would be better off taking it all as Classic or part Classic and part Alpha?
Many thanks. 

Depends when your taking it, as if in the next few months you wont have a choice it will be Classic/Alpha paid as your pension now and you will be contacted sometime in the future with your McLeod options (probably 2024). Its not something you/we have control over at present as it still hasn't been finalised. Presumably the time to make a decision is when you get your offer through the post and make a decision then nothing you can do at present unfortunately.

german_keeper

Mr_Countdown said:

Hi. Just wondered if anyone had any thoughts on my situation.  

I’ve worked all my career in the civil service for 35 years up until April 2022. Like most I was moved from Classic to Alpha in 2015. Didn’t get any more promotions in the last 15 years of work. I’m 55 now and am using money from my AVC pension for a few years till it’s used up. I then plan to take all of my deferred civil service pension at aged 57 or 58. 

With the above information and the forthcoming McCloud judgement does anyone know if I would be better off taking it all as Classic or part Classic and part Alpha?
Many thanks. 

I assume the ref to age 57 or 58 means you will be taking your deferred pension in 2 or 3 years. Hopefully by then the system will be working smoothly and when you apply for your pension MyCSP should give you the 2 options for the 2015 to 2022 period.

If you want to have a reasonably accurate idea before then it shouldn't be too difficult. If you have an ABS for the period to April 2022 that should show pretty much exactly what Alpha will pay because it started in 2015 and you coincidentally finished work at the point covered by McCloud. If you haven't got an up to date ABS MyCSP will provide one a year for deferred pensions without charge but you have to request it. 

For Classic the annual pension will be your reckonable earnings for the last 12 months of employment (unless you for some reason had a 12 month period in the previous 3 years that was higher) multiplied by 7 and divided by 80. The lump sum would be 3 times the pension.The problem may be whether you have access to the reckonable earnings info. For many years now my department has had online payslips and now I am retired I am not sure I would be able to work that figure out.

You would then add 10.1% to both to cover the April 23 CPI increase for deferred pensions. Those figures would also be increased by CPI each April from now on.

I think that covers it and is fairly accurate but of course if I have missed anything or made any elementary howlers someone will correct me.

hugheskevi

kassy64 said:

Mr_Countdown said:

Hi. Just wondered if anyone had any thoughts on my situation.  

I’ve worked all my career in the civil service for 35 years up until April 2022. Like most I was moved from Classic to Alpha in 2015. Didn’t get any more promotions in the last 15 years of work. I’m 55 now and am using money from my AVC pension for a few years till it’s used up. I then plan to take all of my deferred civil service pension at aged 57 or 58. 

With the above information and the forthcoming McCloud judgement does anyone know if I would be better off taking it all as Classic or part Classic and part Alpha?
Many thanks. 

Depends when your taking it, as if in the next few months you wont have a choice it will be Classic/Alpha paid as your pension now and you will be contacted sometime in the future with your McLeod options (probably 2024). Its not something you/we have control over at present as it still hasn't been finalised. Presumably the time to make a decision is when you get your offer through the post and make a decision then nothing you can do at present unfortunately.

If the pension is to be commenced on or after 1 October 2023 both options should be available. Note the judgment is the McCloud judgment, after the claimant, Victoria McCloud.

Pensions commenced prior to 1 October 2023 will be provided with their options by 1 April 2025. Members will have 12 months after receiving options to make their decision.

german_keeper said:

For many years now my department has had online payslips and now I am retired I am not sure I would be able to work that figure out.

It is prudent to download/scan and retain all payslips and P60s for your entire career (else from as soon as possible, and try to gather from as far back as possible). They are invaluable in the event of any dispute/mistake over pay or pension, which is bound to happen at least a few times over the course of a career. Not that this is relevant to you of course, but it might help someone else.

westv

Retaining all your payslips for your entire career sounds like overkill to me. If I did that I'd have over 500 pieces of paper/PDFs.

hugheskevi

westv said:

Retaining all your payslips for your entire career sounds like overkill to me. If I did that I'd have over 500 pieces of paper/PDFs.

It takes seconds once a month to upload to a folder in cloud storage, organized by year and month. Tiny sized files, which will very rarely - if ever - be needed or looked at, but invaluable when they are. Pension admin of DB schemes is too unreliable to trust.

Just60

kassy64 said:

I put my retirement request through in early April last year, to retire at the end of August (so 5 months). I actually retired without knowing what I would be receiving and finally got everything sorted in the October. 

Very helpful to see your experience. I gave 3 months notice recognising that  I was taking a risk of my pension not being sorted for a month or so, but here I am 6 months later still trying to get CSP to reply to my queries of 4 months ago on the quote they sent!