Civil service premium pension

hugheskevi

Sliceoflemon said:

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!! ☺️ 

I suspect Option B would be better from the figures you posted if abatement applies. Under Option A all of your 2015-22 accrual in classic plus counts toward abatement, whereas under Option B none of it does. Given the amounts payable under Option A and B are essentially the same bar c£100 p/a then if abatement applies it will be much higher under Option A than it is under B.

Sliceoflemon

Thanks, but if I take abatement out of the equation and decide to fully retire sooner than later, would option A be better in that scenario? I didn't appreciate the benefit of having classic plus, though all those years ago ticked that box vaguely assuming that paying more towards pension would benefit me in the long run - so in terms of the retirement figures has it made alot of difference?

hugheskevi

Sliceoflemon said:

Thanks, but if I take abatement out of the equation and decide to fully retire sooner than later, would option A be better in that scenario? I didn't appreciate the benefit of having classic plus, though all those years ago ticked that box vaguely assuming that paying more towards pension would benefit me in the long run - so in terms of the retirement figures has it made alot of difference?

Marginally, but only by £100 p/a.

In terms of retirement figures, it is hard to say how much better classic plus is compared to classic for the period 2002-22. We know classic plus and alpha are very similar values for 2015-22. It may well have been quite a lot better than classic, particularly if you have not been promoted much. With the benefit of hindsight, a full switch of both past and future service to premium may have been best, but probably not by very much if the main benefit came from the much better final pensionable earnings definition used in premium and classic plus.

Save_Yoda

https://forums.moneysavingexpert.com/discussion/comment/81573371#Comment_81573371

Hi there Hugheskevi. I arrived at this thread via Google AI! I had been asking about my Civil Service premium pension as I'm coming up to 60 and intend to retire. Google talked about the 3 in 13 rule and said older pay is inflated before arriving at the highest average (i.e. what you say in this thread). This works in my favour as I have had below inflation pay rises over the last 13 years. I asked the same question of ChatGPT and got the opposite answer i.e. the pay is not inflated. Hence I asked Google for source and this thread came up. I don't suppose you could direct me to to document that says it's inflated?

hugheskevi

https://forums.moneysavingexpert.com/discussion/comment/81946633#Comment_81946633

Scheme rules, rule A.4 and A.5 and in particular A.5 (1) (a) on page 12.

Save_Yoda

https://forums.moneysavingexpert.com/discussion/comment/81946659#Comment_81946659

OMG…there is is in black and white!!! You have made me a happy man! I've been looking at this all day!

As a bonus I have now decided to subscribe to Google Gemini rather than ChatGPT!! 😂

For anyone else stumbling here…here are the words:

"A.5 Adjustments for inflation in determining final pensionable earnings

(1) For the purpose of determining which of the amounts mentioned in rule A.4(1) is the

greatest—

(a) the amount of permanent pensionable earnings for each of the complete scheme

years mentioned in rule A.4(1)(b) and (c) except the last year before the benefit

becomes payable is adjusted for inflation, and

(b) the average mentioned in rule A.4(1)(c) is taken to be the average of those adjusted

amounts (“the adjusted average”)."