Civil Service Pension Savings Statement

ClashCityRocker1

I've just received my 2025 pension Savings Statement - I've spent many hoours working out what this should be , at least approximately - I have some in Classic (PCSPS) and some in alpha.

The answer I was NOT expecting was that both should show Pension Input Amounts of £0.00 

I'm obviously quite happy if they are both right as it gives me a lot of leeway on Annual Allowance carry forward. But should I trust it? Am I likely to get a correction later showing I did have some pension growth in 2024/25 - alpha pension grows at 2.32% of £66K salary.

Is it safe to just assume it is right - I could go back and say "are you sure" (?)

hugheskevi

There is no reason to assume it is wrong just because both classic and alpha show zero pension input.

The pension input from classic can commonly be negative if your salary increase is lower than inflation (recalling that 2023 September CPI used to revalue the starting amount was 6.7%). Although the pension input in an individual scheme can be a minimum of zero, a negative input amount can be offset against alpha input (note - it can only be offset against alpha, not other pension scheme inputs). This reflects that due to low salary increases, the real value of your classic pension is falling. This has been the case for a long time, so you may have seen zero pension inputs for classic on past statements, but it is only more recently that the negative input could be offset against alpha accrual.

Following 2015 Remedy, you now have more classic pension (up to 31st March 2022), and if the negative classic input is greater than the value of the alpha accrual, both classic and alpha will be shown as zero input.

The lower rate of inflation (Sep 23=6.7%, Sep 24=1.7%) reduces the alpha input due to the nature of the calculation, further helping generate a zero input.

If you queried it, you would be sent a breakdown of the calculation that would set out the negative classic input and the amount of the alpha input. But if your salary increase in 2024 was much lower than the 6.7% inflation figure, it is likely to be correct.

Marcon

What a fascinating thread. I wonder how many of us who read OP's question would have been able to give any accurate/reliable explanation, let alone such a cogent one?

ClashCityRocker1

hugheskevi said:

There is no reason to assume it is wrong just because both classic and alpha show zero pension input.

The pension input from classic can commonly be negative if your salary increase is lower than inflation (recalling that 2023 September CPI used to revalue the starting amount was 6.7%). Although the pension input in an individual scheme can be a minimum of zero, a negative input amount can be offset against alpha input (note - it can only be offset against alpha, not other pension scheme inputs). This reflects that due to low salary increases, the real value of your classic pension is falling. This has been the case for a long time, so you may have seen zero pension inputs for classic on past statements, but it is only more recently that the negative input could be offset against alpha accrual.

Following 2015 Remedy, you now have more classic pension (up to 31st March 2022), and if the negative classic input is greater than the value of the alpha accrual, both classic and alpha will be shown as zero input.

The lower rate of inflation (Sep 23=6.7%, Sep 24=1.7%) reduces the alpha input due to the nature of the calculation, further helping generate a zero input.

If you queried it, you would be sent a breakdown of the calculation that would set out the negative classic input and the amount of the alpha input. But if your salary increase in 2024 was much lower than the 6.7% inflation figure, it is likely to be correct.

Thanks for this.

I'm tempted to ask if I can see the calculations although I really don't want them to be wrong!

I understand your point about inflation but I got a big pay rise (promotion) over 30% in 2023/24 and following year 24/25 CS for once got a reasonable settlement, above inflation for the first time in living memory. Because of my age I have remained in Classic throughout for service up to end of Mar 22. 

I have a question for you (on the off chance you might know) - on the Annual Benefit Statement a wage is shown for the alpha calculation (under "added this year") - I can't think of any reason why that shouldn't be the same wage that classic would use for yearly earnings (assuming it is the best 12 months etc). Can you think of any reason why it would differ?

ClashCityRocker1

Marcon said:

What a fascinating thread. I wonder how many of us who read OP's question would have been able to give any accurate/reliable explanation, let alone such a cogent one?

Yes it's an amazing place this - and you've been known to be very helpful in the past too!

Dazed_and_C0nfused

NickPoole said:

hugheskevi said:

There is no reason to assume it is wrong just because both classic and alpha show zero pension input.

The pension input from classic can commonly be negative if your salary increase is lower than inflation (recalling that 2023 September CPI used to revalue the starting amount was 6.7%). Although the pension input in an individual scheme can be a minimum of zero, a negative input amount can be offset against alpha input (note - it can only be offset against alpha, not other pension scheme inputs). This reflects that due to low salary increases, the real value of your classic pension is falling. This has been the case for a long time, so you may have seen zero pension inputs for classic on past statements, but it is only more recently that the negative input could be offset against alpha accrual.

Following 2015 Remedy, you now have more classic pension (up to 31st March 2022), and if the negative classic input is greater than the value of the alpha accrual, both classic and alpha will be shown as zero input.

The lower rate of inflation (Sep 23=6.7%, Sep 24=1.7%) reduces the alpha input due to the nature of the calculation, further helping generate a zero input.

If you queried it, you would be sent a breakdown of the calculation that would set out the negative classic input and the amount of the alpha input. But if your salary increase in 2024 was much lower than the 6.7% inflation figure, it is likely to be correct.

Thanks for this.

I'm tempted to ask if I can see the calculations although I really don't want them to be wrong!

I understand your point about inflation but I got a big pay rise (promotion) over 30% in 2023/24 and following year 24/25 CS for once got a reasonable settlement, above inflation for the first time in living memory. Because of my age I have remained in Classic throughout for service up to end of Mar 22. 

I have a question for you (on the off chance you might know) - on the Annual Benefit Statement a wage is shown for the alpha calculation (under "added this year") - I can't think of any reason why that shouldn't be the same wage that classic would use for yearly earnings (assuming it is the best 12 months etc). Can you think of any reason why it would differ?

Isn't Alpha based on actual pay and Classic just uses the salary figure in place at the end of the tax year.  Which may not have been your salary for the past 12 months.

I'm sure @hugheskevi will give the definite answer idc.

ClashCityRocker1

Dazed_and_C0nfused said:

NickPoole said:

hugheskevi said:

There is no reason to assume it is wrong just because both classic and alpha show zero pension input.

The pension input from classic can commonly be negative if your salary increase is lower than inflation (recalling that 2023 September CPI used to revalue the starting amount was 6.7%). Although the pension input in an individual scheme can be a minimum of zero, a negative input amount can be offset against alpha input (note - it can only be offset against alpha, not other pension scheme inputs). This reflects that due to low salary increases, the real value of your classic pension is falling. This has been the case for a long time, so you may have seen zero pension inputs for classic on past statements, but it is only more recently that the negative input could be offset against alpha accrual.

Following 2015 Remedy, you now have more classic pension (up to 31st March 2022), and if the negative classic input is greater than the value of the alpha accrual, both classic and alpha will be shown as zero input.

The lower rate of inflation (Sep 23=6.7%, Sep 24=1.7%) reduces the alpha input due to the nature of the calculation, further helping generate a zero input.

If you queried it, you would be sent a breakdown of the calculation that would set out the negative classic input and the amount of the alpha input. But if your salary increase in 2024 was much lower than the 6.7% inflation figure, it is likely to be correct.

Thanks for this.

I'm tempted to ask if I can see the calculations although I really don't want them to be wrong!

I understand your point about inflation but I got a big pay rise (promotion) over 30% in 2023/24 and following year 24/25 CS for once got a reasonable settlement, above inflation for the first time in living memory. Because of my age I have remained in Classic throughout for service up to end of Mar 22. 

I have a question for you (on the off chance you might know) - on the Annual Benefit Statement a wage is shown for the alpha calculation (under "added this year") - I can't think of any reason why that shouldn't be the same wage that classic would use for yearly earnings (assuming it is the best 12 months etc). Can you think of any reason why it would differ?

Isn't Alpha based on actual pay and Classic just uses the salary figure in place at the end of the tax year.  Which may not have been your salary for the past 12 months.

I'm sure @hugheskevi will give the definite answer idc.

Yes - but for the Pension Input figure calculation I assume they need to use the actual pay not projected salary. So the alpha calculation will use your actual pension income for the tax year but for classic on the ABS they will use your latest slaary even if you haven't yet been on that salary for 12 months but for teh actual classic start and end calculations I assume they use actual pensionable earnings for that year

hugheskevi

The pensionable earnings figure under the alpha accrued this year is the amount of pensionable earnings you had in the scheme year (1 April - 31 March, not the tax year).

Classic doesn't use scheme year figures. Classic is based on pensionable earnings over last 12 months, then 91 day step-backs and looking at the cash amount of pensionable earnings in the preceeding 12 months, doing each step-back until the last 3 years is covered. If a past year is lower in cash terms, then that figure is used, with an inflation adjustment. But if your FTE pensionable earnings are the same or higher, the most recent figures are used, so it is usually just pensionable earnings in last 12 months that is relevant.

For Pension Input figure, it is the pension as at 5 April that is used, and hence the final pensionable earnings as calculated under scheme rules as at 5 April. That is not latest salary, but usually the earnings over last 12 months to 5 April, unless a past figure is higher.

ClashCityRocker1

thank you - I can bully the Classic figure into negative territory but not enough to offset the alpha positive.

maybe I should trust they are right

Yorkie1

To the OP, did your ABS actually set out the Pension Input Amount? Or did you calculate it yourself?

I've been looking at mine and can't see it

hugheskevi

Yorkie1 said:

To the OP, did your ABS actually set out the Pension Input Amount? Or did you calculate it yourself?

I've been looking at mine and can't see it

Pension inputs are shown on a separate Pension Saving Statement. 

These are sent to:

• Those with a pension input across legacy and alpha that exceeds £60,000
• Those who have requested one
• Those who earn £100,000+