Options at the point of retirement

JonathanPDavies

My wife has been a scheme member since 1987 and has a retained classic pension and a very small alpha pension. She retained her classic benefits in 2015 and has been purchasing additional classic years - does this mean she is not affected by the McLoud remedy?

As she works part-time already, it appears that the abatement policy means she gains little from continuing to work rather than retiring now at the age of 60. As she cannot partially retire,  she appears to lose the majority of her pension income if she doesn't take it. Are there any other options? 

Any thoughts or advice appreciated as the Pension Portal is hard to decipher and the contact points unresponsive.

Thanks

tacpot12

I've no expertise with the Civil Service Pensions Scheme, but saw that you hadn't had a reply and so did some research. I've helped family members with the NHS and Teacher's Pension schemes as they approached retirement.   

It appears that she could still be affected by the McCloud remedy because of the small Alpha pension. The Classic Pension and the Added Years in it probably represent the best value she can get, and will not change with the remedy, but the small Alpha pension might be improved upon. 

I'd recommend you visit this page, and read everything until you feel you have a better understanding of her situation with the remedy: 2015 Remedy (McCloud) FAQs - Civil Service Pension Scheme 

Try to use the Pension Modeller and look at her Annual Benefit Statement. If it is anything like the NHS, it can be a faff to get access to these online service, but it is worth persevering as they often reveal bits of information/data that don't appear anywhere else.

I used the Partial Retirement Calculator available via link on this page: Abatement - Civil Service Pension Scheme to see whether abatement will impact your wife in the way you think. I think it will, i.e. she will not be paid any pension while she continues to work, but I think that she will receive the lump sum, which she can invest/save and can expect to get 4% virtually risk free and with no tax to pay if she can put it all into an ISA. (She can give some to you if you haven't used all your ISA allowance). There are Cash ISAs that pay monthly. There don't appear to be any other option if she can't reduce her hours further. While she remains on the same hours, she seems to lose all her pension. 

You should read this guide as well, and check out the Partial Retirement calculator it mentions.
partial-retirement-a-guide-for-members-november-2020.pdf (civilservicepensionscheme.org.uk)

I think you can ignore the McCloud judgement issue when trying to help your wife understand whether working any longer is a good idea as any remedy will only increase your wife's benefits.

If she is a member of a Trades Union, she might check to see if they have any advisers that are clued up on the Civil Service Pension Scheme

JonathanPDavies

Thanks for the help - will have a look at those pages