Civil Service Pension advice

NedS

Universidad said:

hugheskevi said:

It has always amused me how so many staff get so vocal about the decimal points of an annual payrise, whilst unknowingly losing thousands or even tens of thousands of pounds in their pension through poor decisions

I wouldn't have known that I could take the FS portion of my USS pension unreduced at 63.5, except for reading these forums! Some of the stuff we don't know isn't particularly well publicised, is my experience of it.

Same here - I have two final salary pension schemes (including USS pre-2011) where I can request to take early with no reduction, but you have to know to request it, and it's buried in the small print of the scheme rules, which no doubt 90% plus of members do not read and/or fully understand.

Whynocspadvice

oldgrumpyscot said:

I've struggled to find an adviser who knows about Civil Service Pensions so I thought I'd try posting here to see if anyone could help.

Having turned 60 in March, I decided to apply for partial retirement. This was approved and I've now received my pension quote. My plan was to reduce my hours by 40% which would reduce my current salary of £54419 to £32652. My premium pension quote is £29972 so adding that to my new salary comes to £62624. Because of abatement, I would lose £8205 which isn't ideal. However, if I take a lump sum of £100K, that would reduce my pension by £8333 (on the £1 for every £12 formula) giving me a new pension of £21639. Adding that to my reduced salary of £32652 would give £54291 so only £128 less than my current salary pre-retirement. 

Am I missing anything here? Is there some hidden disadvantage to taking the lump sum? 

Any thoughts or comments gratefully received! 

I find it mad that we cannot get advice from the Civil service pension when these are BIG financial issues! Like you I can't even find a private adviser to pay for reliable advice. I don't want to buy a private pension which is what most advisers want to sell you - I just want to talk through and get calculations for some of my options. Many of the online calculators don't work for public sector transferred in service and the impact of Mcloud appears to be only available to us when we are given options at retirement. Has anyone found a good adviser that they can recommend. Or HUGHESKEVI would you help for a fee? because you really seem to understand it all. 

Whynocspadvice

Whynocspadvice said:

oldgrumpyscot said:

I've struggled to find an adviser who knows about Civil Service Pensions so I thought I'd try posting here to see if anyone could help.

Having turned 60 in March, I decided to apply for partial retirement. This was approved and I've now received my pension quote. My plan was to reduce my hours by 40% which would reduce my current salary of £54419 to £32652. My premium pension quote is £29972 so adding that to my new salary comes to £62624. Because of abatement, I would lose £8205 which isn't ideal. However, if I take a lump sum of £100K, that would reduce my pension by £8333 (on the £1 for every £12 formula) giving me a new pension of £21639. Adding that to my reduced salary of £32652 would give £54291 so only £128 less than my current salary pre-retirement. 

Am I missing anything here? Is there some hidden disadvantage to taking the lump sum? 

Any thoughts or comments gratefully received! 

I find it mad that we cannot get advice from the Civil service pension when these are BIG financial issues! Like you I can't even find a private adviser to pay for reliable advice. I don't want to buy a private pension which is what most advisers want to sell you - I just want to talk through and get calculations for some of my options. Many of the online calculators don't work for public sector transferred in service and the impact of Mcloud appears to be only available to us when we are given options at retirement. Has anyone found a good adviser that they can recommend. Or HUGHESKEVI would you help for a fee? because you really seem to understand it all. 

My background is NHS pension and service from 1991 to 1999, transferred in to LGPS and service from 1999 to 2021, transferred in to Civil service and service from 2021 to present. Would like to understand effects of Mccloud (if there are any - also don't understand why fellow long service public sector service civil servants can roll back to classic but transferees can only rollback to nuvos even if its pre 2007 service) and make plans for retiring a few years early if possible. Don't know if best option is added pension or EPA or if return to LGPS would mean that I would get 85 year rule to 2008. Don't understand partial retirement - can I retire from nuvos and leave alpha or vice versa etc etc.
Can anyone point me in the right direction? 

hyubh

Whynocspadvice said:

don't understand why fellow long service public sector service civil servants can roll back to classic but transferees can only rollback to nuvos even if its pre 2007 service

When Nuvos was introduced, all new joiners joined it regardless of age. Having a Club transfer with pre-07 service to bring in didn't change that. Ergo it would be perverse for McCloud to retrospectively grant Classic membership.

or if return to LGPS would mean that I would get 85 year rule to 2008

It would not. Once you transferred out, you transferred out, transferring back in again would get a credit in the 2008 scheme at most given McCloud (so similar to the Nuvos situation above), and would not count towards the 85.

hugheskevi

I find it mad that we cannot get advice from the Civil service pension when these are BIG financial issues!

You wouldn't expect a pension scheme to give advice, although it would be possible for them to set up an advice service through a company authorised to do so. Although with something like 400,000 individuals affected by Remedy and a unit cost of advice probably being at least £1,000 it would be quite expensive. Given the state of public finances, it is unlikely the Exchequer is going to stump up £400m or so to fund professional advice.

I can't even find a private adviser to pay for reliable advice.

I have heard good things about Pengage, although I don't know much about them myself.

Or HUGHESKEVI would you help for a fee? because you really seem to understand it all. 

In the UK the boundary between guidance and advice is very easy to overstep. That is why other than scheme literature and published booklets, it is hard to get anything beyond that short of professional advice. Though understandable, the UK has gold-plated advice requirements so that many individuals are deprived of assistance that would be very valuable to them but that would fall short of fully regulated and insured advice.

I've dipped into commercial tax guidance in the past, but I wouldn't touch wider pensions and finance.

My background is NHS pension and service from 1991 to 1999, transferred in to LGPS and service from 1999 to 2021, transferred in to Civil service and service from 2021 to present. Would like to understand effects of Mccloud

You are affected by McCloud, and will be able to choose from benefits based on either (a) having been in the unreformed LGPS to 2021, then transferring into nuvos with past service linked to final salary, new service between 2021-22 in nuvos career average, and then in alpha from 2022; or (b) having been in the reformed LGPS scheme to 2021, transferring into alpha for service from 2014/15 (depending on when you moved to reformed scheme) and for future service, with past service prior to 2014/15 going into final salary linked nuvos.

It is a difficult scenario, so I might not be 100% accurate on all of that, but it should be roughly what you are offered.

also don't understand why fellow long service public sector service civil servants can roll back to classic but transferees can only rollback to nuvos even if its pre 2007 service

You rollback into the scheme you would have been placed into had alpha not been introduced in 2015. Transferees are usually placed into the latest open final salary scheme. Although nuvos is a career average scheme, it has a section for past final-salary linked service. Hence if alpha had never existed, you would have been placed into nuvos, and so that is what you are rolled back into. Whereas a long-serving Civil Servant would always have been in the classic scheme, and would have remained in Classic past 2015 if alpha had not been introduced. Hence they roll back into classic.

make plans for retiring a few years early if possible. Don't know if best option is added pension or EPA or if return to LGPS would mean that I would get 85 year rule to 2008. Don't understand partial retirement - can I retire from nuvos and leave alpha or vice versa etc etc.

There is really almost no difference between EPA and Added Pension in practice - under either measure you contribute money and get a pension in return. Once you factor in early or late retirement it all adds up to the same thing, with just a few differences in ill-health and death benefits.

Partial retirement requires a reduction to pensionable earnings of at least 20% (which your employer has to agree to), and then you are free to take some or all of your pension. You can choose whatever proportion of nuvos and/or alpha as you wish. It is very flexible so you can choose what you like, although you need to be careful with abatement.

Whynocspadvice

Thank you hyubh and hugheskevi 

Sliceoflemon

Dear All. I am a newbie and this is my first post. Basically I have just turned 60, am a civil servant (since 1989) and have put in for part-retirement without really having much of a clue which option is best pension wise. I was full time from 1989-

Sliceoflemon

..my last comment was cut off so I don't know what I did wrong..! To continue, full time civil servant 1989 - 2022. In 2022 I went part-time reducing to 4 days (29.6 hours). Now going for part- retirement 3 days (22.2 hours). I haven't ever been promoted. I have received the part- retirement options which factor in McCloud. I had classic plus then moved to Alpha.

Quote A 
Classic Plus £20424.18
Lump sum £21087.68
Alpha £1760

Quote B
Classic Plus £15607.95
Alpha £6482.57

I just don't want to shoot myself in the foot by choosing badly. Is there a way of avoiding abatement and also taking all classic plus or should I take a reduced % of classic plus?

Any advice gratefully received!

Dazed_and_C0nfused

Sliceoflemon said:

..my last comment was cut off so I don't know what I did wrong..! To continue, full time civil servant 1989 - 2022. In 2022 I went part-time reducing to 4 days (29.6 hours). Now going for part- retirement 3 days (22.2 hours). I haven't ever been promoted. I have received the part- retirement options which factor in McCloud. I had classic plus then moved to Alpha.

Quote A 
Classic Plus £20424.18
Lump sum £21087.68
Alpha £1760

Quote B
Classic Plus £15607.95
Alpha £6482.57

I just don't want to shoot myself in the foot by choosing badly. Is there a way of avoiding abatement and also taking all classic plus or should I take a reduced % of classic plus?

Any advice gratefully received!

Quote B would seem to lessen the likelihood of abatement. Assuming you are leaving Alpha until NPA.

Would details of your current salary be a useful piece of information to have provided?

hugheskevi

Dazed_and_C0nfused said:

Sliceoflemon said:

..my last comment was cut off so I don't know what I did wrong..! To continue, full time civil servant 1989 - 2022. In 2022 I went part-time reducing to 4 days (29.6 hours). Now going for part- retirement 3 days (22.2 hours). I haven't ever been promoted. I have received the part- retirement options which factor in McCloud. I had classic plus then moved to Alpha.

Quote A 
Classic Plus £20424.18
Lump sum £21087.68
Alpha £1760

Quote B
Classic Plus £15607.95
Alpha £6482.57

I just don't want to shoot myself in the foot by choosing badly. Is there a way of avoiding abatement and also taking all classic plus or should I take a reduced % of classic plus?

Any advice gratefully received!

Quote B would seem to lessen the likelihood of abatement. Assuming you are leaving Alpha until NPA.

Would details of your current salary be a useful piece of information to have provided?

It doesn't matter whether alpha is taken or left to NPA - it doesn't count toward abatement unlike all the other schemes/sections.

Option B would also have a lump sum that should be included in the comparison.

Taking all of classic plus would be the most likely thing to do if aged 60 or older, due to no arrears or actuarial enhancement if commenced after Normal Pension age.