Civil service premium pension

SimonSeys

I asked MyCSP for the three figures for each year after receiving my RSS.  I only received the annual, non-inflation adjusted figures for each year but this was useful as it allowed me to calculate the three figures. 

So yes.  MyCSP can provide at least some of this information. 

(My situation is complex as I changed departments, was paid twice for a few months, and the overpayment was reclaimed the following financial year)

ThreeWheels

cosyc said:

hugheskevi said:

Here are the inflation adjustments for each year.


MyCSP should provide the figures for the 3 measures of final pensionable earnings as they are a matter of fact, not a forecast and a member has a legitimate reason to request them given they are essential for an accurate pension calculation. However whether they would is another matter - the biggest problem would be getting past them treating it as a request for a forecast rather than for existing values.

I was in Classic and Classic/Alpha, depending on my choice at point of retiring, I left 4 years ago but haven't taken my pension yet. 
Do the inflation adjustments apply to Classic/Alpha?

Hello there! Hoping someone could clarify/sense-check my understanding of where the inflation uplift figures shown in Hugheskevi's spreadsheet (quoted above) come from?

I've no problems with the  22/23 scheme year uplift figure of 6.7% shown above, as it's clear this is the same as the increase applied to pensions in payment for 2024 (CPI increase from Sep22 to Sep23).

Then, looking at the previous year,  i.e.,  for the adj to the 21/22 scheme year earnings, I assume we'd use the 2023 PI figure (CPI increase from Sep21 to Sep22) which was 10.1%,  - To compound this 10.1% we use 10.1*1.067 = 10.87% to estimate the compounded uplift for 21/22 scheme year.  This 10.87 is then added to the 6.7% to give 17.57 which I think Hugheskevi's spreadsheet approximates to 17.5%?

Then looking one year further back again,  i.e.,  for the adj to the 20/21 scheme year earnings I assume we'd use the 2022 PI figure (based on the CPI increase from Sep20 to Sep21) which was 3.1%,  - To compound this 3.1% we use 3.1*1.175 = 3.64% to estimate the compounded uplift for 20/21 scheme year.  This 3.64 is then added to the 17.5% to give 21.14 which I think Hugheskevi's spreadsheet approximates to 21.1%?

Is my understanding of the compounding calculation logic correct?

Many thanks

hugheskevi

ThreeWheels said:

cosyc said:

hugheskevi said:

Here are the inflation adjustments for each year.


MyCSP should provide the figures for the 3 measures of final pensionable earnings as they are a matter of fact, not a forecast and a member has a legitimate reason to request them given they are essential for an accurate pension calculation. However whether they would is another matter - the biggest problem would be getting past them treating it as a request for a forecast rather than for existing values.

I was in Classic and Classic/Alpha, depending on my choice at point of retiring, I left 4 years ago but haven't taken my pension yet. 
Do the inflation adjustments apply to Classic/Alpha?

Hello there! Hoping someone could clarify/sense-check my understanding of where the inflation uplift figures shown in Hugheskevi's spreadsheet (quoted above) come from?

I've no problems with the  22/23 scheme year uplift figure of 6.7% shown above, as it's clear this is the same as the increase applied to pensions in payment for 2024 (CPI increase from Sep22 to Sep23).

Then, looking at the previous year,  i.e.,  for the adj to the 21/22 scheme year earnings, I assume we'd use the 2023 PI figure (CPI increase from Sep21 to Sep22) which was 10.1%,  - To compound this 10.1% we use 10.1*1.067 = 10.87% to estimate the compounded uplift for 21/22 scheme year.  This 10.87 is then added to the 6.7% to give 17.57 which I think Hugheskevi's spreadsheet approximates to 17.5%?

Then looking one year further back again,  i.e.,  for the adj to the 20/21 scheme year earnings I assume we'd use the 2022 PI figure (based on the CPI increase from Sep20 to Sep21) which was 3.1%,  - To compound this 3.1% we use 3.1*1.175 = 3.64% to estimate the compounded uplift for 20/21 scheme year.  This 3.64 is then added to the 17.5% to give 21.14 which I think Hugheskevi's spreadsheet approximates to 21.1%?

Is my understanding of the compounding calculation logic correct?

Many thanks

The principle is right, but the compounding calculation is rather simpler - eg, to get the figure shown under 2021/22 (17.5%) the calculation is 1.067 x 1.101 = 1.174767 = 17.5% (rounded).

ThreeWheels

Apologies, I'd attached the wrong quote to my previous post, so now attaching screenshot of Hugheskevi's workings that i had been referring to!

ThreeWheels

Many thanks Hugheskevi - Same calculation I think but your's is the considerably rationalised version! (& my rounding was askew!) Very helpful, thanks again!

Sliceoflemon

Hugheskevi, you have been very helpful to me in another thread and I have now come across this one which raises another query. My legacy pension scheme is classic plus. I am on the brink of going part retired. I am picking up from this discussion that my classic plus pension may be better than I anticipated as it will be adjusted for below -inflation pay rises over the past few years. Am I reading that right? Would it therefore be best to take as much classic plus as possible when I part retire? (As per the other thread I have just turned 60 and was trying to decide between option A and B - option A gives larger proportion of the legacy scheme). Many thanks.

hugheskevi

Sliceoflemon said:

Hugheskevi, you have been very helpful to me in another thread and I have now come across this one which raises another query. My legacy pension scheme is classic plus. I am on the brink of going part retired. I am picking up from this discussion that my classic plus pension may be better than I anticipated as it will be adjusted for below -inflation pay rises over the past few years. Am I reading that right? 

Yes, you essentially have a final salary scheme with a CPI underpin due to the various definitions of final pensionable earnings used in the scheme, which cover the last 13 years.

Sliceoflemon said:

Would it therefore be best to take as much classic plus as possible when I part retire? (As per the other thread I have just turned 60 and was trying to decide between option A and B - option A gives larger proportion of the legacy scheme). Many thanks.

It depends. Classic Plus has 3 tests of final pensionable earnings, and you receive the best of them. They are pensionable earnings in last 12 months, best inflation-adjusted pensionable earnings in last 4 complete scheme years (1 Apr - 31 Mar), and average inflation adjusted pensionable earnings in any period of three complete scheme years during the last 13 years ending on your last day of service.

If you are close to whatever gives your highest earnings dropping out of the look-back period, eg, if your best year happened to be from the scheme year 4 years ago, then it would probably be best to take it all before the best year drops out. However, the best measure should be included in your retirement quote, and it was pretty much the same as alpha, so unless you were thinking of retiring after March next year there shouldn't be anything to factor into your decision from definitions of pensionable earnings. 

Sliceoflemon

Thank you for the information about this, I am very late in the day trying to get a handle on my options and you have been so helpful!

I am part retiring in late September having turned 60. My plan was to carrying on working for the next 2/3 years (so full retirement at 62/63) - but I am debating whether to go earlier. If I decide to go for full retirement in say 12 months from now would it be better to go for option A (larger proportion of classic plus)?

Are the figures for the classic plus options I have received already factoring in the adjustment for lower than inflation pay rises over the past few years?

I have seen in another thread that there is a table which shows different salary amounts when adjusted for inflation? Have my pension quotes already factored these in?

I am already slightly part-time since June 2022 (I reduced from 37 hours to 29.6 per week) so I am trying to work out if the best salary to use may pre-date June 2022 as it would be full time (though I am unsure how to do the calculations)

Or maybe as the options A and B are so similar then I don't need to worry too much what to go for...?

Many thanks, as before any pointers gratefully received!

hugheskevi

I am part retiring in late September having turned 60. My plan was to carrying on working for the next 2/3 years (so full retirement at 62/63) - but I am debating whether to go earlier. If I decide to go for full retirement in say 12 months from now would it be better to go for option A (larger proportion of classic plus)?

Assuming you take 100% of your Classic Plus pension when you partially retire it doesn't matter. If you decided to take less than 100%, eg, due to abatement, then it would depend on whether you were at risk of having a best year drop out of the look-back period. If that was the case (ie take less than 100% and final pensionable earnings expected to drop) then that would favour Option B (alpha for 2015-22 period) relative to the quotes you have now, as the alpha benefits would maintain their value and the Classic Plus would lose value.

Are the figures for the classic plus options I have received already factoring in the adjustment for lower than inflation pay rises over the past few years

Yes, they are calculated using your final pensionable earnings, which in turn is based on the best of 3 tests. Those tests will have been carried out and the best result used.

I am already slightly part-time since June 2022 (I reduced from 37 hours to 29.6 per week) so I am trying to work out if the best salary to use may pre-date June 2022 as it would be full time (though I am unsure how to do the calculations)

Full-time and part-time doesn't matter, as in all cases it is Full Time Equivalent (FTE) salary that is used in the calculation of final pensionable earnings. So the consideration is how your FTE salary has changed relative to inflation over the last 4 years.

Sliceoflemon

Thank you Hugheskevi.
So putting things very simply,  it looks to me like taking 100% proportion of the legacy classic plus pension at 60 (option A) gives me the best outcome (assuming I don't get an unlikely salary hike) as it is already fixed. Even with the possibility of greater abatement under option A, I will be no worse off (in terms of money in pocket) than if I were to choose option B, and I may benefit if I decided to fully retire sooner rather than later.. is that more or less correct? 
Many thanks - honestly - I am so grateful for all this guidance!! ☺️