Civil Service Pension - quick questions...

chubsta

Hopefully simple enough questions - I am within 6 months of my retirement so have notified my employer and am listed as 'terminated'! Leave balances etc are updated to reflect my finish date of April 30th but my questions are:

I am retiring on April 30th 2024, therefore I will have made a whole years (and 1 months) contributions since my last pension (Alpha) statement was calculated. As I will be getting my pension forecast probably some time in February or March will it include the projected increase or will it solely be based upon the balance as of the last statement from April 2023? If the latter, then what happens about the extra years contributions?

Similarly, I have a deferred Classic pension from 2015 - the benefit statements show this as having increased by CPI each year since that date, and I expect it to do so again in April 2024, again just before I retire. So, the same as the Alpha part - will the calculations made by CSP reflect any CPI increase that its due at the beginning of April or will they be based upon old figures and therefore what happens to the CPI increase for the year 2023-2024?

I am aware that pensions-in-payment do not get the full increase when it is applied so If I retired in January 2024 I would only get in April 2024 25% of any CPI increase applied for the year 23/24 but I am retiring after any such increases should be applied so hopefully that is not a factor - by retiring at the end of April 2024 I presume in 2025 I would get whatever September 2024s CPI increase is divided by 12 x 11 as I would have only had my pension in payment for 11 months?.

TLDR - how are your pension figures calculated by CSP to reflect any changes to pension values that may occur between the day they calculate them and the day you start receiving it?

(final bit - how is the day of the month you receive your pension worked out as I would like mine on either the last working day or the 1st of the month if possible?)

NedS

I cannot answer all of your questions, but I can get the ball rolling until other more knowledgeable folks come along.

Your Alpha pension entitlement should be easy for you to work out. You accrue 2.32% of your pensionable salary each year, so add that to your April 2023 statement, and then adjust the combined amount upwards for 6.7% CPI inflation (Sept figure) what will be applied from 1st April 2024. Then add on one additional month's accrued pension for April 2024. That's roughly what your Alpha entitlement will be on 30th April 2024.

I'm not so knowledgeable on Classic, but you can check the scheme rules and similarly work out roughly what your pension entitlement will be.

Then there's the McCloud remedy to consider which should now offer you the option as if you had been allowed to stay in Classic for the affected period, which may or may not be better for you, based on your circumstances.

Pensions are paid like salaries through a payroll system, so I suspect all pension payments will be made on the same day of the month and you will not have a choice as to when payments are made. Others may know differently.

Dazed_and_C0nfused

I am aware that pensions-in-payment do not get the full increase when it is applied so If I retired in January 2024 I would only get in April 2024 25% of any CPI increase applied for the year 23/24 but I am retiring after any such increases should be applied so hopefully that is not a factor - by retiring at the end of April 2024 I presume in 2025 I would get whatever September 2024s CPI increase is divided by 12 x 11 as I would have only had my pension in payment for 11 months?

This bit has puzzled me and have found something referred to as a second bite in respect of the similar NHS scheme but nothing for Classic.

In the op's retire in January example losing 75% of the April 2024 increase is covered on the civil service website.

But is that somehow compensated for by the initial pension calculated at January 2024 having the other 75% of the inflation increase added, albeit retrospectively 🤔

chubsta

Thanks for the replies - I have been calculating my pension for ages so have a good idea of what it should be but am not sure as to how that will tally with MyCSP - for instance, with the CPI increase in April added lets say my figures make the Alpha worth £10670 for instance,  will myCSP give me a quote of £10000 because the quote is being done just before the increase has officially been applied, even though the Treasury Order applying it is done in late January?

Hope this makes sense!

MrsBrooks13

I was ill health retired last year with a CS pension which is paid on the 7th of each month, which was my last day of service. I had no choice in this payment date.

Money5

Hopefully the OP has their pension sorted by now ? I have only just read this thread but hope to offer/ receive some advice!
MyCSP have the worst reviews I have ever read on Trustpilot and my own experience with them has been frustrating to say the least. I believe they are going to have a new administrator in place by the end of 2025.
I retired in March this year with a deferred Classic pension and was bamboozled by the lack of information regarding how the 2023/24 pay increase would be applied.
However as another commenter has guessed- a 'second bite' lump sum payment was made into my account on the 8th April to cover the increase. I also only heard about 'second bite' lump sum payments from the NHS website 😅 and then had this confirmed by phoning the MyCSP number to ask why a large sum of money had arrived in my bank account a few weeks after my 'official' lump sum payment.
My original lump sum payment had been calculated using my salary from my latest pension statement. However, once the 2023/2024 pay increase of 6.7% had been applied on 8 April to all civil service salaries across the board,  a new figure was calculated and the difference paid into my account to cover the 11 months from 1 April 2023 to 2 March 2024 when I retired.
For the month of April 2024 I am in receipt of my pension and therefore will receive my 6.7% increase for April and each month thereafter (I received a P60 and letter today in post to confirm my new monthly pension payment)
I imagine those who have been in receipt of their pension since at least 1 April 2023 will receive 12 months back pay for the 6.7% increase and then 6.7% increase for each month going forward.
If someone retired in Oct 23 ( for example) I believe they would be entitled to a second bite lump sum to reflect the increase of 6.7% which applied to Apr 23- Oct 23 when they were in employment (then 6 months back pay of the increase covering Oct 23 to April 24 when in receipt of pension) with the 6.7% increase applied to their monthly pension payments thereafter.
This is because I believe (though I'm not 100 % sure) that the 6.7% increase which has only been applied on 8 April 2024 actually reflects the pay award from 1 April 2023 but always takes months to be agreed and put in place.
The info on the MyCSP website is woefully inadequate and most of those in the call centre read from that inadequate info if you ask questions 🤔
I'm very new to pensions and had to work everything out myself so please don't read this as accurate information.
However I would be very interested to hear if the OP has received a 'second bite' lump sum as I believe many people have to chase theirs up from various pension providers.
I'd also be grateful if someone could confirm that the 6.7% increase is for the period Apr 2023 onwards? I believe the 2024/2025 civil service pay increases are now being discussed and whatever is agreed will be backdated to April 2024 when eventually paid?🦧
.

Money5

Oops - just read OPs post again and see you have only just retired - 30 April 2024- your calculation of lump sum/ new salary is likely up to date now !!! Don't be surprised if it takes up to a month to receive into your bank account- they aim for 10 days after your retirement date then change this to 10 working days and so on ! 

hugheskevi

I believe they are going to have a new administrator in place by the end of 2025.

Capita  will be taking over from MyCSP.

I retired in March this year with a deferred Classic pension and was bamboozled by the lack of information regarding how the 2023/24 pay increase would be applied.

You need to use the correct terminology. A classic Civil Service pension is calculated using final pensionable earnings. The calculation of final pensionable earnings will be based on best pensionable earnings over the last 3 year period. This figure could be affected by a retrospective pay award made by an employer after the pension is put into payment, resulting in a recalculation of pension and payment of arrears.

Once the pension is in payment it is pension and subject to annual increases, commonly referred to as Pension Increase (and never as pay or salary increase).

 However, once the 2023/2024 pay increase of 6.7% had been applied on 8 April to all civil service salaries across the board

All Civil Service pensions, not salaries. Salary increases for delegated grades are set by individual departments, not centrally.

However, once the 2023/2024 pay increase of 6.7% had been applied on 8 April to all civil service salaries across the board,  a new figure was calculated and the difference paid into my account to cover the 11 months from 1 April 2023 to 2 March 2024 when I retired.

Presumably you commenced the pension from deferred member status, or perhaps prior to age 55 or other slightly less common circumstances (eg final pensionable earnings were not based on your earnings from the last 12 months). So you received the same pension and lump sum on 2 March 2024 as you would have received if you had commenced the pension in April 2023. Then you received the vast majority, and maybe the whole amount, of the 6.7% annual increase in April 2024, and that also affected the lump sum.

I imagine those who have been in receipt of their pension since at least 1 April 2023 will receive 12 months back pay for the 6.7% increase and then 6.7% increase for each month going forward.

Back pay? Presumably you mean pension arrears, but after a member has been in payment beyond the first April after commencing their pension, they will simply receive the pension increase due from April and there will be no pension arrears.

If someone retired in Oct 23 ( for example) I believe they would be entitled to a second bite lump sum to reflect the increase of 6.7% which applied to Apr 23- Oct 23 when they were in employment (then 6 months back pay of the increase covering Oct 23 to April 24 when in receipt of pension) with the 6.7% increase applied to their monthly pension payments thereafter.

If they had retired from active service, their pension and lump sum would have been calculated as at October 2023. They would then get a pro-rata indexation increase of the annual increase of 6.7% and everything would be straightforward. No second-bite lump sum would be due as they retired from active service (unless they commenced pension prior to age 55 or final pensionable earnings were based on a period prior to most recent 12 month period).

This is because I believe (though I'm not 100 % sure) that the 6.7% increase which has only been applied on 8 April 2024 actually reflects the pay award from 1 April 2023 but always takes months to be agreed and put in place.

The Pension Increase (not pay award) is based on September CPI and implemented from the subsequent April. There is no agreement to be reached, it is the same process that has applied for many years (RPI rather than CPI prior to 2011). HM Treasury publish the increase tables early in the calendar year every year, at this link.

I'd also be grateful if someone could confirm that the 6.7% increase is for the period Apr 2023 onwards? I believe the 2024/2025 civil service pay increases are now being discussed and whatever is agreed will be backdated to April 2024 when eventually paid?🦧

The 6.7% is the 2024 Pension Increase. The 2025 Pension Increase will be based on September 2024 CPI. The 2024 Pension Increase has been implemented, there are no arrears or back-dating for pensions already in payment.

2024 Pay Awards will be under discussion in each Department and are completely irrelevant to pensions in payment.

Money5

Thank you for such a clear and concise explanation. You are absolutely correct- I did retire as a deferred member and what you have said all makes sense to me now.
I had been struggling to make sense of it all as had been going round in circles trying to obtain the correct information.
Thanks again🙂