Classic Civil Service Pension - start date has passed, when can I expect them to pay it?

CorseyEdge

hugheskevi said:

The refund for each year has interest based on average building society saving account applied, and then a deduction is applied to cover survivor benefits for post-pension commencement marriages. Often, the interest and the post pension commencement deduction largely offset each other.

Super helpful, thank you!  Are you aware of anywhere that has actually published the historic "yearly average of the Building Society average rate for share accounts as announced annually by the Minister, with yearly rests, from 1 April 1995"?

That's the statement in the Scheme rules, but doesn't really help when trying to estimate (and double check) MyCSPs calculations on WPS refunds.

hugheskevi

CorseyEdge said:

hugheskevi said:

The refund for each year has interest based on average building society saving account applied, and then a deduction is applied to cover survivor benefits for post-pension commencement marriages. Often, the interest and the post pension commencement deduction largely offset each other.

Super helpful, thank you!  Are you aware of anywhere that has actually published the historic "yearly average of the Building Society average rate for share accounts as announced annually by the Minister, with yearly rests, from 1 April 1995"?

That's the statement in the Scheme rules, but doesn't really help when trying to estimate (and double check) MyCSPs calculations on WPS refunds.

No idea sorry.

JoeCrystal

Not much information to be honest. But there is a general impression that it is quite generous and surprising amount.

CorseyEdge

Thanks both. I’ll just estimate using CPI and that should be in the ball park, I know the actual WPS contributions made so that’s a start. Thanks again. 

ali_bear

hugheskevi said:

The term for converting Pension Commencement Lump Sum into pension is 'inverse commutation'

Normal commutation is exchanging pension for Pension Commencement Lump Sum at the rate of £1 of pension for £12 of lump sum.

Inverse commutation is a considerably higher rate, around £20 of lump sum for £1 of pension.

Does anyone know if there are limits on how much you can commute or inverse commute, can you do the whole lot as lump sum, or make the lump sum zero? Civil service classic pension. I only have a few early years in the scheme and with my current plan it would suit me to take it all as a lump sum. Thanks in advance.

Yorkie1

ali_bear said:

hugheskevi said:

The term for converting Pension Commencement Lump Sum into pension is 'inverse commutation'

Normal commutation is exchanging pension for Pension Commencement Lump Sum at the rate of £1 of pension for £12 of lump sum.

Inverse commutation is a considerably higher rate, around £20 of lump sum for £1 of pension.

Does anyone know if there are limits on how much you can commute or inverse commute, can you do the whole lot as lump sum, or make the lump sum zero? Civil service classic pension. I only have a few early years in the scheme and with my current plan it would suit me to take it all as a lump sum. Thanks in advance.

This page states:

"When you take your pension you may be able to give up all or part of your lump sum in return for an increase in either your own pension, or in your own pension and your widow’s, widowers’ or surviving civil partner’s pension.  The Scheme Administrator (MyCSP) can give you more information. If you decide to exchange all or part of your lump sum, you must make your decision before your last day of service. If you left service early with preserved benefits, you must make your decision before your pension comes into payment at pension age. Once we start paying your benefits, you cannot change them."

and

"If you were in pensionable service after 30 September 2007, you will be able to choose to give up part of your pension for an additional lump sum.

You can choose how much extra lump sum you want up to a maximum set by HMRC. You must give up £1 of annual pension for each £12 of additional lump sum you take.

You can find out how much additional lump sum you can take, and the effect it will have on your pension by using the calculator on the Civil Service Pensions website (or you can ask the Scheme Administrator (MyCSP) to do this for you if you do not have access to the calculator)."

ali_bear

OK thanks. In summary then I "may be able to" commute "all or part" some of the lump sum into pension income. But not the other way around. 

Dazed_and_C0nfused

ali_bear said:

hugheskevi said:

The term for converting Pension Commencement Lump Sum into pension is 'inverse commutation'

Normal commutation is exchanging pension for Pension Commencement Lump Sum at the rate of £1 of pension for £12 of lump sum.

Inverse commutation is a considerably higher rate, around £20 of lump sum for £1 of pension.

Does anyone know if there are limits on how much you can commute or inverse commute, can you do the whole lot as lump sum, or make the lump sum zero? Civil service classic pension. I only have a few early years in the scheme and with my current plan it would suit me to take it all as a lump sum. Thanks in advance.

You do realise that the commutation rate for the Classic pension is only 12:1?

Given it seems to have unlimited inflation protection and could well be paid for 40 years, increasing in value each April in line with the CPI rate from the previous September you will almost certainly be giving up a lot of guaranteed income for your one off lump sum.

ali_bear

True, and probably I'll take it as it comes. But the income could be taxed at 40%. And my plan could've used the cash boost around my 60th birthday. But if that's how it is, so be it