Early Retirement and the McCloud Remedy

Quizmaster123

I retired early from the Civil Service under VR terms in August 2022, using my redundancy payment to buyout the reduction so I could take my Classic pension early.  I was under the ERA for my Alpha pension at the time, so this was automatically deferred.  I was told at the time I would get my remedy options once they started implementing McCloud after October 2023.  I was therefore expecting to receive an Immediate Choice letter by 31 March 2025, although I know the deadline for these have since been extended to anything up to 2 years and beyond.

I've recently been told by CSP that because I have not taken any of my Remediable Service benefits which accrued between 01/04/2015 and 31/03/2022, I am not subject to an Immediate Choice.  Instead, I'm in the 'Deferred Choice Underpin' category and will only receive my options 'on retirement'.

Surely this can't be right?  I've already retired and want to take my Classic benefits for the remedy period, which would leave 5 months Alpha benefits deferred.  But, from what CSP are saying, I would have to wait until I'm 67 - my Alpha NPA - to get my options.  Alternatively, I could claim my Alpha pension now to force them to provide my options, but I would take a 10 year reduction hit on the Alpha element.  I'm also concerned that there's a risk that by choosing Classic for the remedy period while I'm still under the Classic NPA, that they actuarially reduce it, even though my Classic pension which accrued pre April 2015 is already in payment under the VR terms.

Is there anyone else in the same situation or know whether this is correct?  Unfortunately, the CSP website is lacking in information and doesn't provide any information on situations such as this. 

hugheskevi

I've recently been told by CSP that because I have not taken any of my Remediable Service benefits which accrued between 01/04/2015 and 31/03/2022, I am not subject to an Immediate Choice.  Instead, I'm in the 'Deferred Choice Underpin' category and will only receive my options 'on retirement'.

Surely this can't be right?  I've already retired and want to take my Classic benefits for the remedy period, which would leave 5 months Alpha benefits deferred.  But, from what CSP are saying, I would have to wait until I'm 67 - my Alpha NPA - to get my options.  Alternatively, I could claim my Alpha pension now to force them to provide my options, but I would take a 10 year reduction hit on the Alpha element.  I'm also concerned that there's a risk that by choosing Classic for the remedy period while I'm still under the Classic NPA, that they actuarially reduce it, even though my Classic pension which accrued pre April 2015 is already in payment under the VR terms.

It is correct that you are a Deferred Choice Underpin member.

You can apply to take the rest of your pension ('retire') whenever you wish, and at that point you will receive your DCU options. You will presumably select Option 1, legacy benefits. You will also be offered early access to your deferred alpha pension as your Option 2, but that would almost certainly be far less valuable than Option 1, legacy.

You will be put in the position you would have been in had there not been age discrimination, ie, if you had remained in classic beyond April 2015, and then the whole of the actuarial reduction on your classic pension bought-out by your employer when you exited.

Quizmaster123

Thank you for your reply.  Does that mean if I took my Legacy benefits under Option 1, I could leave the remaining 5 months of Alpha deferred, rather than being forced to take it at the same time?

hugheskevi

Quizmaster123 said:

Thank you for your reply.  Does that mean if I took my Legacy benefits under Option 1, I could leave the remaining 5 months of Alpha deferred, rather than being forced to take it at the same time?

Yes, you would be electing for benefits under legacy, and could do what you liked with the tiny bit of post April 2022 alpha pension.

Although how long it will take in practice for that to be implemented is another matter, but at least when it does happen you will get interest on the amount owed.

Quizmaster123

Really appreciate the information - thank you.