Civil Service Alpha Pension Transfer In

toxorebel

Hi all,

I joined the Civil Service earlier this year and am in the Alpha scheme.  I have two older workplace pensions I’m considering transferring in.  The quotes I’ve had from CSP are as follows.

Pension 1
Transfer Value: £38,088
Alpha Pension Quote:  £2,998

Pension 2
Transfer Value: £11,457
Alpha Pension Quote:  £879

I’m wondering if transferring these would be a good move.  I’m currently aged 45.  Any thoughts or tips for making the decision much appreciated!

Thanks!

michaels

Lots of factors.

Do you have any other DB or DC provision?

How long do you think you will be in the CS?

Do you have protected at 55 access to the DC pots?

Might you want any TFLS (alpha scheme it is not worthwhile to take TFLS)

Marcon

toxorebel said:

Hi all,

I joined the Civil Service earlier this year and am in the Alpha scheme.  I have two older workplace pensions I’m considering transferring in.  The quotes I’ve had from CSP are as follows.

Pension 1
Transfer Value: £38,088
Alpha Pension Quote:  £2,998

Pension 2
Transfer Value: £11,457
Alpha Pension Quote:  £879

I’m wondering if transferring these would be a good move.  I’m currently aged 45.  Any thoughts or tips for making the decision much appreciated!

Thanks!

Certainty v flexibility - which is more important to you? Possibly transfer in one but not the other...?

hugheskevi

If you transfer in you get:

• An income guaranteed for life, escalating by uncapped CPI
• Survivor benefits of 37.5% of the amount payable at Normal Pension age
• Risk that State Pension age will increase in future, but the transfer is priced based on current legislated State Pension ages
• A lump sum that is effectively taxed, due to the poor commutation rate used

And you forego:

• A high probability that the increase to your DC pension would exceed the CPI+1.7% discount rate (which you can think of as rate of return net of fees in a DC scheme) used to calculate the transfer
• 25% tax free lump sum
• Flexibility to draw from the pension as you wish
• 100% spouse inheritance tax free if you die before age 75

I suspect the profit maximising, risk neutral approach would be to keep the DC pensions as they are, and use them to delay drawing the alpha pension. That means you get all the good pre-retirement features of the DC scheme along with the full value of the tax-free lump sum, and also the good post-retirement features of alpha. Note that alpha is actuarially enhanced if drawn after normal pension age.

But profit maximising is not the only consideration, and a lot depends on your attitude to investment risk.

JoeCrystal

How likely are you working for the Civil Service? If you leave before two years limit, your CS pension will not be deferred so it will be a refund or transfer the pension value to elsewhere. UNLESS you transfer in the pension. 😉 If you do, then your accrued pension plus whatever got transferred in will be deferred instead.