Civil Service Pension CSP Alpha and Nuvos - Early Retirement Reductions

RapidRetiree

I am hoping some smart people on here will be able to help me make a best guess on what reductions will be applied to my Civil Service pension as I am getting nowhere with CSP on this matter. The retirement modeller doesn't work for me.

Note that I transferred my Local Goverment pension to CSP as the numbers were better. I don't intend to take a lump sum so that the pension is maximised.

I am working off the assumption that unlike the LGPS there is now no final salary component to my pension. Is this correct?

My Alpha pension for my normal retirement age (NRA) (I think) of 67 according to my Benefits statement is £9,863 as of 31/3/24. I assume this will only be increased by the cost of living increases each year and by 2.32% of my annual salary each year.
If I was to retire at 60 this would be 7 years early and would be reduced by 31.3% (taken from Page 17 of  “Civil Servants and Others Pension Scheme (CSOPS) Alpha Scheme - Early payment reduction (normal health) and age addition - Factors and guidance”) published by the Government Actuary’s Dept. This would have given an alpha pension of £6,775.88 at 31/3/24 if I had been 60 then.

My Nuvos pension for my NRA(I think) of 65 according to the Benefits statement mentioned above is £20,969 as of 31/3/24. I assume this will only be increased by the cost of living increases each year as there will be no further additions.
If I was to retire at 60 this would be 5 years early and would be reduced by 23%(5%x3 plus 4%x2) -  (taken from Page 36 of  “Principal Civil Service Pension Scheme (PCSPS) - Classic, classic plus, premium and nuvos schemes - Early retirement, late retirement, age addition and late payment supplement - Factors and guidance”) published by the Government Actuary’s Dept. This would give a nuvos pension worth £16,146.13 on 31/3/24 if I had been 60 then.

I am still to receive my 24/25 benefit statement soon so have indicated fixed numbers above rather than unknowns as it is the calculations where I need the help. I hope to retire within the next year.

Some feedback on whether the reduction factors above are correct and have been applied correctly would be greatly appreciated. 

It would be greatly appreciated if you could confirm the above is correct and if there is anything I have missed.

In addition, if anyone knows the % cost of living increase that will be applied on or about 31/3/25 that would also be extremely helpful. Many Thanks.

DE_612183

Think the % increase for 2025 is 1.7%

hugheskevi

I am working off the assumption that unlike the LGPS there is now no final salary component to my pension. Is this correct?

It depends on what type of transfer it was. If was a Club transfer that is incorrect. If it was a CETV transfer it is correct.

If I was to retire at 60 this would be 7 years early and would be reduced by 31.3% (taken from Page 17 of  “Civil Servants and Others Pension Scheme (CSOPS) Alpha Scheme - Early payment reduction (normal health) and age addition - Factors and guidance”) published by the Government Actuary’s Dept. This would have given an alpha pension of £6,775.88 at 31/3/24 if I had been 60 then.

You need to use the spreadsheet, the guidance documents contain reductions based on the previous set of factors.

I assume this will only be increased by the cost of living increases each year as there will be no further additions.

A nuvos pension can be either career average or final salary. If your transfer-in was a Club transfer, some or all of these benefits may be linked to your final pensionable earnings.

RapidRetiree

Thanks Hugheskevi, 

Interesting - This was a club transfer in circa 2023 and I was given a mix of Nuvos and Alpha as the allowance for my LGPS credit.

The spreadsheet doesn't look like a 5 min job for my situation so I will have a look and follow up. Great Feedback.

hugheskevi

Interesting - This was a club transfer in circa 2023 and I was given a mix of Nuvos and Alpha as the allowance for my LGPS credit.

The spreadsheet doesn't look like a 5 min job for my situation so I will have a look and follow up. Great Feedback.

Sounds like your nuvos benefits are linked to final pensionable earnings, under same measures as apply for Premium pension as I recall. MyCSP should be able to confirm. 

The spreadsheet is big, but just use the filters on the index page and you rapidly get the sheet you need and it is pretty easy from there. Just find the factors you need and plug them into the calculation in the guidance documents instead of the figures already in the guidance documents. You should find a slight reduction in the actuarial reduction applied, ie, your reduced pension should be slightly higher than using the previous factors (probably only about 1-2% though).

RapidRetiree

Many Thanks for taking the time to respond.

I have now looked at the factors in detail and can see how I would apply the factors to work out my CETV if I knew the Pension Increase Factor. This was 1.0253 for my transfer valuation but assume this was the cost of living increase in the time period between the request and the quote.
However, I already have a valuation from my previous provider that I accepted and this is now part of my csp pension.
I am not sure how I get from the CETV to the annual pension figure with the reductions.

You appear to be correct about the basis for benefits for the PCSPS (Nuvos) portion as per the quotation below from my transfer quote
"Estimated amounts of pension above are based on your current pensionable earnings.

When you leave, we will base your benefits on your pensionable earnings at that time, which could

be quite different from your current salary."

Even if I can get to a minimum annual pension figure this would be useful.