Civil Service pension query

sandpie

Hello - I've read a number of really well informed discussions about civil service pensions on here, so hope there may be some advice to help me in a situation that is driving me to despair!

In December 2023 I submitted a request for a quotation to take my pension early, starting in April 2024, aged 55.

I had two periods of service - 2002 - 2012 (plus paid for some added years, so approx 12 years), when I was in the Premium scheme. 

I left the CS, but returned in 2015, working until August 2023, when I was in the Alpha scheme. I was in a more senior grade with a higher salary, and also paid additional contributions and EPA. 

When I received my formal quotation, it was about 25% lower than I was expecting, based on the modeller on the portal. I had also called and talked through the modeller calculations with the contact centre before I left, and they confirmed it was broadly correct. I expected there would be some variation but thought that would likely be in may favour as the modeller was based on the previous year's salary and 2023 - 24 was the year when  there was a reasonable uplift to reflect cost of living increases.

After many months of frustrating back and forth, I now understand part of the discrepancy.

The three years when I was away from the civil service coincided with the shift to Alpha, so I returned under that scheme automatically. The Alpha rules state that any return after a gap of up to 5 years will be counted as continuous service, and so the modeller was basing my first period of service (Premium)on the higher salary I was earning when I left in 2023. I have direct emails from CSP confirming this point.

However, because post-McCloud that period is automatically rolled into the legacy schemes, I have been advised that the terms of the Premium scheme mean that because I did not make a specific application within a year to join the two periods of service, they count as entirely distinct. Therefore, that part of my service is now being calculated based on my 2012 salary (albeit with inflation adjustments.)

This seems utterly absurd to me - given Premium did not exist when I rejoined in 2015 I could not have made such an application. It has been suggested that I might be able to seek redress when the contingent decision scheme is launched, but this seems unfair since there was no decision involved.

I wondered whether anyone has any experience of arguing this point? I have been waiting for substantive reply on this point since early September - I have had numerous emails apologising for missing their own target date to reply.

Separately, could anyone point me in the direction of detailed calculators for the Alpha scheme so I can try to work out why that is so much lower than the prediction in the modeller. (Which did account for the fact that I would be taking it well ahead of norman retirement age.)

Sorry for such a lengthy post but as I approach the anniversary of completing the forms, I'd welcome any wisdom.

Many thanks. 

Dazed_and_C0nfused

sandpie said:

Hello - I've read a number of really well informed discussions about civil service pensions on here, so hope there may be some advice to help me in a situation that is driving me to despair!

In December 2023 I submitted a request for a quotation to take my pension early, starting in April 2024, aged 55.

I had two periods of service - 2002 - 2012 (plus paid for some added years, so approx 12 years), when I was in the Premium scheme. 

I left the CS, but returned in 2015, working until August 2023, when I was in the Alpha scheme. I was in a more senior grade with a higher salary, and also paid additional contributions and EPA. 

When I received my formal quotation, it was about 25% lower than I was expecting, based on the modeller on the portal. I had also called and talked through the modeller calculations with the contact centre before I left, and they confirmed it was broadly correct. I expected there would be some variation but thought that would likely be in may favour as the modeller was based on the previous year's salary and 2023 - 24 was the year when  there was a reasonable uplift to reflect cost of living increases.

After many months of frustrating back and forth, I now understand part of the discrepancy.

The three years when I was away from the civil service coincided with the shift to Alpha, so I returned under that scheme automatically. The Alpha rules state that any return after a gap of up to 5 years will be counted as continuous service, and so the modeller was basing my first period of service (Premium)on the higher salary I was earning when I left in 2023. I have direct emails from CSP confirming this point.

However, because post-McCloud that period is automatically rolled into the legacy schemes, I have been advised that the terms of the Premium scheme mean that because I did not make a specific application within a year to join the two periods of service, they count as entirely distinct. Therefore, that part of my service is now being calculated based on my 2012 salary (albeit with inflation adjustments.)

This seems utterly absurd to me - given Premium did not exist when I rejoined in 2015 I could not have made such an application. It has been suggested that I might be able to seek redress when the contingent decision scheme is launched, but this seems unfair since there was no decision involved.

I wondered whether anyone has any experience of arguing this point? I have been waiting for substantive reply on this point since early September - I have had numerous emails apologising for missing their own target date to reply.

Separately, could anyone point me in the direction of detailed calculators for the Alpha scheme so I can try to work out why that is so much lower than the prediction in the modeller. (Which did account for the fact that I would be taking it well ahead of norman retirement age.)

Sorry for such a lengthy post but as I approach the anniversary of completing the forms, I'd welcome any wisdom.

Many thanks. 

I can't answer your main point but what element of Alpha is causing the issue?

Alpha accrual is pretty straightforward, what is difficult from a prediction perspective is determining what the annual revaluation rate will be in future years.

DRS1

Presumably the problem is splitting the service periods and using an old salary figure for the first period rather than having the two periods of service treated as continuous and taking the newer (higher) salary into account for that service? 

Marcon

sandpie said:

The three years when I was away from the civil service coincided with the shift to Alpha, so I returned under that scheme automatically. The Alpha rules state that any return after a gap of up to 5 years will be counted as continuous service, and so the modeller was basing my first period of service (Premium)on the higher salary I was earning when I left in 2023. I have direct emails from CSP confirming this point.

However, because post-McCloud that period is automatically rolled into the legacy schemes, I have been advised that the terms of the Premium scheme mean that because I did not make a specific application within a year to join the two periods of service, they count as entirely distinct. Therefore, that part of my service is now being calculated based on my 2012 salary (albeit with inflation adjustments.)

This seems utterly absurd to me - given Premium did not exist when I rejoined in 2015 I could not have made such an application. It has been suggested that I might be able to seek redress when the contingent decision scheme is launched, but this seems unfair since there was no decision involved.

I wondered whether anyone has any experience of arguing this point? I have been waiting for substantive reply on this point since early September - I have had numerous emails apologising for missing their own target date to reply.

Separately, could anyone point me in the direction of detailed calculators for the Alpha scheme so I can try to work out why that is so much lower than the prediction in the modeller. (Which did account for the fact that I would be taking it well ahead of norman retirement age.)

Or you could make a formal complaint now using the scheme's IDRP (https://www.civilservicepensionscheme.org.uk/about-us/complaints/internal-dispute-resolution-idr/) and possibly save yourself a lot of frustrating and potentially fruitless calculations?

sandpie

Dazed_and_C0nfused said:

sandpie said:

Hello - I've read a number of really well informed discussions about civil service pensions on here, so hope there may be some advice to help me in a situation that is driving me to despair!

In December 2023 I submitted a request for a quotation to take my pension early, starting in April 2024, aged 55.

I had two periods of service - 2002 - 2012 (plus paid for some added years, so approx 12 years), when I was in the Premium scheme. 

I left the CS, but returned in 2015, working until August 2023, when I was in the Alpha scheme. I was in a more senior grade with a higher salary, and also paid additional contributions and EPA. 

When I received my formal quotation, it was about 25% lower than I was expecting, based on the modeller on the portal. I had also called and talked through the modeller calculations with the contact centre before I left, and they confirmed it was broadly correct. I expected there would be some variation but thought that would likely be in may favour as the modeller was based on the previous year's salary and 2023 - 24 was the year when  there was a reasonable uplift to reflect cost of living increases.

After many months of frustrating back and forth, I now understand part of the discrepancy.

The three years when I was away from the civil service coincided with the shift to Alpha, so I returned under that scheme automatically. The Alpha rules state that any return after a gap of up to 5 years will be counted as continuous service, and so the modeller was basing my first period of service (Premium)on the higher salary I was earning when I left in 2023. I have direct emails from CSP confirming this point.

However, because post-McCloud that period is automatically rolled into the legacy schemes, I have been advised that the terms of the Premium scheme mean that because I did not make a specific application within a year to join the two periods of service, they count as entirely distinct. Therefore, that part of my service is now being calculated based on my 2012 salary (albeit with inflation adjustments.)

This seems utterly absurd to me - given Premium did not exist when I rejoined in 2015 I could not have made such an application. It has been suggested that I might be able to seek redress when the contingent decision scheme is launched, but this seems unfair since there was no decision involved.

I wondered whether anyone has any experience of arguing this point? I have been waiting for substantive reply on this point since early September - I have had numerous emails apologising for missing their own target date to reply.

Separately, could anyone point me in the direction of detailed calculators for the Alpha scheme so I can try to work out why that is so much lower than the prediction in the modeller. (Which did account for the fact that I would be taking it well ahead of norman retirement age.)

Sorry for such a lengthy post but as I approach the anniversary of completing the forms, I'd welcome any wisdom.

Many thanks. 

I can't answer your main point but what element of Alpha is causing the issue?

Alpha accrual is pretty straightforward, what is difficult from a prediction perspective is determining what the annual revaluation rate will be in future years.

Thanks for reading. The issue with Alpha is that the Option B quotations I have received for the second period of service, so the whole period of service is under the Alpha scheme, are approximately 40% lower than the Alpha portion on the modeller estimate when I put in my early retirement date last year. When I asked for an explanation I was simply told that the modeller is only a guide. If it's that far off, it's seems it's not a very helpful guide...

sandpie

DRS1 said:

Presumably the problem is splitting the service periods and using an old salary figure for the first period rather than having the two periods of service treated as continuous and taking the newer (higher) salary into account for that service? 

Yes, exactly. Because we are automatically rolled back into the legacy scheme, they are adopting all the terms of that scheme, one of which was that you had to make an application within a year to treat two period as continuous service. Obviously I wasn't able to do that, as those terms were not in place at the time that I rejoined.

sandpie

Marcon said:

Or you could make a formal complaint now using the scheme's IDRP and possibly save yourself a lot of frustrating and potentially fruitless calculations?

Thank you - I do have an outstanding complaint in the system (through their online complaints form) but I think you are right and I need to escalate to this formal process.