Civil Service Premium Pension - take at 60 or wait till end of scheme year?

atalantalass

Thanks again.

Ok I'm clear now that 2025/26 will be my last full scheme and that 2021/22, the high CPI year, will have fallen off for the purposes of the last 4 complete years calculation. And I need to do that third calculation.  And to do that I set out my pensionable earnings for each of the 13 previous complete scheme years, make the CPI adjustment to each and then in groups of three, sum them and divide by 3 to get the average, is that correct?

Switching to partnership isn't something I've ever thought about (or understood). To lock in the 2022 CPI adjusted salary, I would need to make the switch before 31 March 2026. Does it matter how much before? I would only intend to be in partnership until I take my pension though (October 2026) so wondering whether there would be much benefit to doing that for such a short time, or whether it would even be allowed. Is there a minimum period you need to be partnership for?     

hugheskevi

Ok I'm clear now that 2025/26 will be my last full scheme and that 2021/22, the high CPI year, will have fallen off for the purposes of the last 4 complete years calculation. And I need to do that third calculation.  And to do that I set out my pensionable earnings for each of the 13 previous complete scheme years, make the CPI adjustment to each and then in groups of three, sum them and divide by 3 to get the average, is that correct?  

Yes, that is all correct

Switching to partnership isn't something I've ever thought about (or understood). To lock in the 2022 CPI adjusted salary, I would need to make the switch before 31 March 2026. Does it matter how much before? I would only intend to be in partnership until I take my pension though (October 2026) so wondering whether there would be much benefit to doing that for such a short time, or whether it would even be allowed. Is there a minimum period you need to be partnership for?     

As long as you leave before 31st March, it doesn't matter how long. In practice, you switch at the start of a month so you would move into Partnership on 1st March 2026. To do that, you would need to inform your employer of the switch by 1st January.

There is no minimum period you need to be in Partnership for. The benefit to switching would be locking in the higher salary to protect a higher DB pension, not the Partnership pension built up. Whether there is a benefit to doing it depends on what the difference in final pensionable earnings calculated in March 2026 would be compared to calculated in October 2026. That in turn depends on the calculations looking back over last 13 years.

selondonman

lemonfix said:

Ah! Light shines - I’d completely forgotten previous years were adjusted for inflation - will have to work that out, especially given the 2022 11% high. Thanks for the quick response, very much appreciated. (Yes, moved from Classic to Premium when it was introduced.)

you are very lucky to have got the 11% inflation increase as most final salary private schemes had a maximum increase cap 

atalantalass

hugheskevi said:

Ok I'm clear now that 2025/26 will be my last full scheme and that 2021/22, the high CPI year, will have fallen off for the purposes of the last 4 complete years calculation. And I need to do that third calculation.  And to do that I set out my pensionable earnings for each of the 13 previous complete scheme years, make the CPI adjustment to each and then in groups of three, sum them and divide by 3 to get the average, is that correct?  

Yes, that is all correct

Switching to partnership isn't something I've ever thought about (or understood). To lock in the 2022 CPI adjusted salary, I would need to make the switch before 31 March 2026. Does it matter how much before? I would only intend to be in partnership until I take my pension though (October 2026) so wondering whether there would be much benefit to doing that for such a short time, or whether it would even be allowed. Is there a minimum period you need to be partnership for?     

As long as you leave before 31st March, it doesn't matter how long. In practice, you switch at the start of a month so you would move into Partnership on 1st March 2026. To do that, you would need to inform your employer of the switch by 1st January.

There is no minimum period you need to be in Partnership for. The benefit to switching would be locking in the higher salary to protect a higher DB pension, not the Partnership pension built up. Whether there is a benefit to doing it depends on what the difference in final pensionable earnings calculated in March 2026 would be compared to calculated in October 2026. That in turn depends on the calculations looking back over last 13 years.

But I need to wait for the Sep 2025 CPI figure to do the 13 year countback, yes? Then based on how that turns out make the decision and notify by 1 Jan. Thanks as always for setting everything out so clearly.

hugheskevi

atalantalass said:

But I need to wait for the Sep 2025 CPI figure to do the 13 year countback, yes? Then based on how that turns out make the decision and notify by 1 Jan. Thanks as always for setting everything out so clearly.

Yes, you may as well wait for September CPI to become available in October 2025, which will enable you to calculate and consider all of the measures of final pensionable earnings immediately before and after the end of the scheme year to decide what course of action would be best.

If the result ended up being best to switch to Partnership, you would do that by informing your employer in early December that you wish to switch to Partnership from 1 March 2026.