Classic Pension - Abatement or Defer?

ReadyDelBoy

Hi,

I've worked in the Civil Service since 1987, and accrued both Classic and Alpha pensions. I've just passed the age of 60 and I am looking to partially retire from 4th August 2025, I am planning to reduce my working hours to 70%

I have received my MyCSP pension quote and have considered that Option B of the 2015 Remedy is the better option for me.

However, the reduction of 30% working hours means I will be subject to abatement of £3,000 per annum on my Classic pension. I won't take my Alpha until I fully retire. 

Is it better for me to reduce the percentage of Classic I take by approx. 15%, deferring that amount of my pension until I fully retire in 2 to 3 years' time, or reduce my working hours to 60% (reducing my Alpha pension contributions for that period) or just take the abatement "hit"?

I've written to MyCSP regarding this several weeks ago and have not received any response, and time is starting to get very close for me to make my decision.

I'd be grateful for any assistance on the pros and cons of the outlined options and whether there are any I may not yet have considered. 

Andy_L

I don't think you can defer part of your classic pension, AIUI its an "all or nothing" deal

Even if you can you will gain nothing. The deferred pension isn't increased to reflect you not claiming it for "2-3 years" so there's no real difference between deferring it and abatement in terms of cash in your pocket.

As far as reducing hours by an extra 10% that would cost you 2.32% of 10% of your salary in "lost" Alpha pension accrual. However you'll have more free time & won't be subject to £3k abatement. Depends how big your salary is as to which is the better deal

NickPoole

I took 86% of my classic pension because any more meant meant abatement. Th rest will be revised upwards in line with your final salary when you finally retire (you can't get any extra service).

You can take some or all of your classic they'll ask what % you want to take.

NickPoole

The final salary used will be full time equivalent not your reduced percentage.

ReadyDelBoy

@nickpoole Many thanks, after a bit more digging and a long call to MyCSP that is exactly what I ended up doing, taking 84% Classic. 

It's nice to know this as well "The final salary used will be full time equivalent not your reduced percentage."
Thanks again.