Civil Service - Alpha Pension

DE_612183

Hi, anyone have any ideas if the Annual Adjustment of Pension contributions is the same as the Pension Increase?

For example for 2023-24 2.32% of pensionable income built up, but that figure also gets adjusted to take into account cost of living.

I can find info about the increases for folks taking their pension, but not about the adjustment for those in role - is the figure the same?

Dazed_and_C0nfused

DE_612183 said:

Hi, anyone have any ideas if the Annual Adjustment of Pension contributions is the same as the Pension Increase?

For example for 2023-24 2.32% of pensionable income built up, but that figure also gets adjusted to take into account cost of living.

I can find info about the increases for folks taking their pension, but not about the adjustment for those in role - is the figure the same?

Yes, there is a table with the revaluation rates for different public sectors here,

https://questions-statements.parliament.uk/written-statements/detail/2024-01-25/hcws211

It happens to be the lowest rate but I think the 2.32% is one of the better accrual rates.

hugheskevi

DE_612183 said:

Hi, anyone have any ideas if the Annual Adjustment of Pension contributions is the same as the Pension Increase?

For example for 2023-24 2.32% of pensionable income built up, but that figure also gets adjusted to take into account cost of living.

I can find info about the increases for folks taking their pension, but not about the adjustment for those in role - is the figure the same?

They are different things, but the increase is almost always the same (only difference was in April 2016, as September 2015 CPI was -0.1%).

Under current legislation, Pension Increase is September CPI with a floor of 0% (ie cannot be negative if there is deflation). Revaluation for those in role (ie active members) is September CPI but can be negative if inflation is zero. Revaluation for a deferred member is the same as for Pension Increases.

As they are different things, legislation could change for each one independently in the future.

DE_612183

So reading that document it's 6.7%?

Dazed_and_C0nfused

DE_612183 said:

So reading that document it's 6.7%?

For Alpha yes.

Exodi

DE_612183 said:

Hi, anyone have any ideas if the Annual Adjustment of Pension contributions is the same as the Pension Increase?

For example for 2023-24 2.32% of pensionable income built up, but that figure also gets adjusted to take into account cost of living.

I can find info about the increases for folks taking their pension, but not about the adjustment for those in role - is the figure the same?

I believe it is usually CPI but varies. You can log in and confirm by checking your statements: https://members.civilservicepensionscheme.org.uk/

My wife got 10.1% for 23_24 in the alpha scheme, but I presume you are talking about 24_25?

To be clear, how I believe it's calculated (I could be wrong, but it makes my excel sheet 100% match her her statements):

([Previous Value] + (2.32% x [Earnings])) x (1+[CPI]) = New Value

So if she had previously accrued an annual pension of £10k, her earnings for the year were 50k, and CPI was 5%:

(10000+(0.0232*50000))*(1+0.05)=11718

DE_612183

Exodi said:

DE_612183 said:

Hi, anyone have any ideas if the Annual Adjustment of Pension contributions is the same as the Pension Increase?

For example for 2023-24 2.32% of pensionable income built up, but that figure also gets adjusted to take into account cost of living.

I can find info about the increases for folks taking their pension, but not about the adjustment for those in role - is the figure the same?

I believe it is usually CPI but varies. You can log in and confirm by checking your statements: https://members.civilservicepensionscheme.org.uk/

My wife got 10.1% for 23_24 in the alpha scheme, but I presume you are talking about 24_25?

To be clear, how I believe it's calculated (I could be wrong, but it makes my excel sheet 100% match her her statements):

([Previous Value] + (2.32% x [Earnings])) x (1+[CPI]) = New Value

So if she had previously accrued an annual pension of £10k, her earnings for the year were 50k, and CPI was 5%:

(10000+(0.0232*50000))*(1+0.05)=11718

Benefits Statement now ready yet for 2023-24.

Yes, your calculation is correct - I have a similar excel - what I was looking for is the 1+{CPI} value.

horsewithnoname

Each year you accrue 2.32% of your pensionable pay, which is increased by the CPI rate for the previous September. So this year (to 31-3-2024) the increase is 6.7%. It will show on your annual benefit statement which is usually out about July/August. 

DE_612183

horsewithnoname said:

Each year you accrue 2.32% of your pensionable pay, which is increased by the CPI rate for the previous September. So this year (to 31-3-2024) the increase is 6.7%. It will show on your annual benefit statement which is usually out about July/August. 

Thanks for that - makes sense (although why it takes 3-4 months to calculate seems odd )

DE_612183

So as I've just joined CS, my pensionable pay for part of the year is £16856.74, 2.32% of that is £391.07 (PA ) which is £32.59 per month, add on the 6.7% and we get £34.77 ( or £417.27 PA ).

Not a lot, but for a few months work will pay a bill!

hugheskevi

DE_612183 said:

horsewithnoname said:

Each year you accrue 2.32% of your pensionable pay, which is increased by the CPI rate for the previous September. So this year (to 31-3-2024) the increase is 6.7%. It will show on your annual benefit statement which is usually out about July/August. 

Thanks for that - makes sense (although why it takes 3-4 months to calculate seems odd )

Last day of scheme year=31st March

Interface due from employers=mid to late April

550,000 active members to calculate all benefits for, including hundreds of thousands with linked final salary benefits in schemes closed to new accrual.

If you could just press a button for all of these, then no problem, but there will be late data from some of the 300+ employers in the scheme, incorrect or suspicious data issues to resolve with employers, as well as some inevitable manual processes to undertake that are just not worth automating (eg, relatively rare things such as pension divorce debits, maybe Annual Allowance scheme pays debits, might not be fully automated, etc).

Statutory deadline for statements=31st August.