Unclaimed Deferred Classic CSP

UnattentiveSon

Just found out a parent was eligible to start claiming their Classic CSP at age 60, but didn't know how, is now 66 and when going through state pension stuff pulled their latest statement out from 6 years ago. Left Civil service in 2011, went self employed since.

Going to get them on the phone to the MyCSP people, but from what I've read online the annual benefits of the Classic scheme will have stopped increasing from the time they turned 60 and therefore they'll essentially have missed out on 6 years of the annual amounts without any deferred increase benefit like with the state pension.  

They seem to think they'll be able to get the last 6 years paid as arrears but I can't see how that would be possible and google isn't throwing anything or reading through the old Classic scheme paperwork.  

Any ideas from anyone here with some first hand experience?

sammyjammy

From memory you only get paid arrears if you take it within 12 months  of it being due.

BoGoF

This would suggest Classic pension is increased with inflation if not claimed at 60 (page 3) - https://www.civilservicepensionscheme.org.uk/media/yiapsmei/crb-1-april2016.pdf

But I believe any pension payable from 60 is lost.

marky_b_2

I queried not taken my deferred classis pension at 60 along with partial retirement options and this was the response I got from MyCPS

Thank you for your recent enquiry. Once in payment, your preserved classic pension will increase each April by inflation. If you choose to defer claiming this pension until after your normal retirement age (60), it would still attract the same annual inflation increases, which continue past this age. However, it is important to note that the lump sum only attracts increases up to age 60. If you defer claiming your preserved classic pension, it will be paid in arrears and backdated to your 60th birthday. The arrears payment will be calculated as if the pension had been claimed at 60, reflecting the correct inflation rates applicable. If you access your current pension through partial retirement, your combined salary and pension should ideally not be more than what you were earning before you partially retired (your 'salary of reference'). This is because, if your new part-time salary plus your pension exceed your pre-partial retirement salary, we deduct the excess from your pension. This is known as abatement. You can find more detail on this here: https://www.civilservicepensionscheme.org.uk/planning-for-retirement/what-are-my-options/partial-retirement/abatement/ If you wish to, you may claim your preserved classic pension while you continue to work, by completing and returning the ‘Change of details and retirement application form – deferred members’ form from the Civil Service Pension website: http://www.civilservicepensionscheme.org.uk/members/member-forms/ To assess abatement, the salary of reference used for the preserved pension would usually be the salary that you received on the last day of your original service for your preserved pension. This figure is adjusted to take inflation into account. If you decide to partially retire, this will provide access only to your current pension benefits. You can keep your classic pension preserved, and access it at a later time, as describe above. I hope this answers your query. Please let us know if you have any other questions.

Regards,

xylophone

See https://www.civilservicepensionscheme.org.uk/retired-left-or-leaving/ive-left-and-have-an-unclaimed-pension-deferred/


https://www.civilservicepensionscheme.org.uk/media/wy4dhhyr/deferred-pension-applications-information-sheet-october-2023.pdf

classic, classic plus and premium

If you have benefits in classic, classic plus or premium, your benefits will usually be backdated to normal pension age, with arrears normally being paid covering the period from pension age onwards. This puts you in the position you would have been in had you claimed your benefits at normal pension age.

Any arrears payments will be taxed according to the year in which they are paid, not the tax years the payments relate to. We can provide a breakdown of the arrears upon request, after the payment has been made.

https://www.civilservicepensionscheme.org.uk/media/rtrl0rfj/change-of-details-and-retirement-application-form-deferred-members-february-2020.pdf

With regard to above  concerning taxation of arrears, see

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim75020

Pensions paid in arrears

If a pension provider discovers a long-standing underpayment of pension, the underpayment is calculated and paid in a single sum. Where the provider is required to operate PAYE, they operate it on the lump sum arising which may give rise to higher rate liability for a pensioner who is usually a basic rate taxpayer. In this situation, the pensioner should contact HMRC at the end of the tax year in which the arrears were paid and supply a schedule showing the years to which underpayments are attributable (on the accrual basis), asking for the payments to be related back to the relevant years. HMRC will spread the payments back over the relevant years and recalculate liability. Underpayments in the earlier years may be set-off against the resulting overpayment in the year of the lump sum payment.