Civil service fixed term contract alpha pension scheme query

MFMP

Hi there, im looking for some help please. 

I've been told that as someone on a 23 month fixed term contract that I would be ineligible to join the alpha pension scheme, but I can't find any documentation on the CS pension scheme to support this. Is this true? Could someone provide info on where to look? 

Thanks in advance for any help.

Dazed_and_C0nfused

MFMP said:

Hi there, im looking for some help please. 

I've been told that as someone on a 23 month fixed term contract that I would be ineligible to join the alpha pension scheme, but I can't find any documentation on the CS pension scheme to support this. Is this true? Could someone provide info on where to look? 

Thanks in advance for any help.

Is it not that you can join but if you leave before 2 years is up you cannot get an Alpha pension.

It's covered here. And taking a refund is a (financially) terrible choice.  A transfer out is much better (financially).

https://www.civilservicepensionscheme.org.uk/knowledge-centre/pension-schemes/alpha-scheme-guide/leaving-the-scheme-section-04/leaving-with-less-than-two-years-service-section-04a/

flaneurs_lobster

One might wonder if the 23 month duration of such contracts might be for exactly this eligibility (or rather lack of) reason.

hugheskevi

MFMP said:

I've been told that as someone on a 23 month fixed term contract that I would be ineligible to join the alpha pension scheme, but I can't find any documentation on the CS pension scheme to support this. Is this true?

There are very niche circumstances in which alpha is not used, but I would be very surprised if they applied to you.

I suspect what whoever told you this meant was that unless you either transfer in a pension or work for longer than 24 months, you will either have to take a refund of contributions or transfer the pension out when you leave.

MFMP said:

Could someone provide info on where to look? 

Rule  3 of the alpha scheme rules sets out alpha scheme eligibility:

Establishment and scope
3. 

(1) A scheme is established for the payment of pensions and other benefits to or in respect of—
(a) civil servants; and
(b) persons to whom this scheme may potentially relate by virtue of paragraph (2) and in
respect of whom the Minister makes a determination under section 25(5) of the Act.

(2) This scheme may potentially relate to the following persons—
(a) a person who holds an employment which is remunerated out of money provided by
Parliament, the Consolidated Fund or the Scottish Consolidated Fund;
(b) a person who holds an employment which is remunerated out of a fund established
by or under an Act of Parliament;
(c) a person who is a member of staff of a statutory body, or the holder of a statutory
office, if that body or office is listed in Schedule 10 to the Act or has been listed
previously in that Schedule;
(d) a person who holds an employment which is listed in Schedule 1 (kinds of
employment etc referred to in section 1) to SA 1972;
(e) a person who holds an employment which is specified in an enactment as an
employment to which the PCSPS relates or to which this scheme may potentially
relate;
(f) a person who holds an employment which is specified in a list produced for the
purpose of section 1(4A) (superannuation schemes as respects civil servants etc) of
SA 1972;
(g) a person to whom the scheme relates by virtue of sub-paragraphs (a) to (e) and by
virtue of a previous determination under section 25(5) of the Act, who ceases to hold
an employment mentioned in any of subparagraphs (a) to (e);
(h) a person who, at any time before or after these Regulations come into force—
(i) ceased to be a civil servant; or
(ii) ceased to hold an employment which was at the time the person ceased to hold
that employment listed in Schedule 1 to SA 1972.

(3) If the Minister makes a determination under section 25(5) of the Act in relation to a person
mentioned in paragraph (2)(f) to (h), the person is not eligible to be an active member of
this scheme unless the person meets the conditions of eligibility set out in regulation 16

SimonSeys

I’m not an expert, but I think most people on FTA are eligible for alpha. Note that if you leave within two years then you can either get a refund of contributions or a Transfer value, but of course you may secure a permanent job (possibly at another Department) and nooone can predict that. 

Maybe that’s where the confusion comes from?

https://www.civilservicepensionscheme.org.uk/knowledge-centre/pension-schemes/alpha-scheme-guide/leaving-the-scheme-section-04/leaving-with-less-than-two-years-service-section-04a/

JoeCrystal

Are you still within the first year? If you got some DC pension funds you can transfer in, it would certainly worth asking for quotes although I don't know if fixed term have any effects on ability to transfer in. But it would mean you still retain the pension when you leave potentially 

MFMP

Thanks to all of you have responded so far - and so quickly! I just knew the wonderful community we have here would be able to help.

For clarity, I haven't started yet. This is a job offer I am considering taking. I am in my 50s and my pensions already accrued in the private sector (DB & DC combinations) are pretty decent. This would potentially be my last role prior to early retirement (all being well).

I'll review the links that kind forum members have posted above. 

Thanks again! 

MFMP

flaneurs_lobster said:

One might wonder if the 23 month duration of such contracts might be for exactly this eligibility (or rather lack of) reason.

Yes, i wondered this too!

hugheskevi

flaneurs_lobster said:

One might wonder if the 23 month duration of such contracts might be for exactly this eligibility (or rather lack of) reason.

The employer wouldn't care about the pension aspects, that is a problem for the pension administrator, not them. In almost all cases, the employer pension liability is only to pay the relevant employer contributions each month and what the employee does after that doesn't matter.

The 23 month term will be related to the increased protections that kick in after 24 months of employment.

QrizB

hugheskevi said:

MFMP said:

I've been told that as someone on a 23 month fixed term contract that I would be ineligible to join the alpha pension scheme, but I can't find any documentation on the CS pension scheme to support this. Is this true?

There are very niche circumstances in which alpha is not used, but I would be very surprised if they applied to you.

I suspect what whoever told you this meant was that unless you either transfer in a pension or work for longer than 24 months, you will either have to take a refund of contributions or transfer the pension out when you leave.

OP, "transfer in" is probably the simplest way to preserve som Alpha pension benefits (if you want them). Alternatively you could "transfer out" to a DC pension at the end of your contract, if 23 months of Alpha doesn't fit your plans.

For transfer in, you might want to consider whether to transferring one of your existing DC pensions is a good idea, or possibly start another DC pension now solely so you can transfer it in once your contract starts?

Universidad

I don't know the answer to this, but if considering transferring out at the end, is it not probable that partnership could come out ahead and/or be less hassle?
I would join alpha and transfer something in, in order to lock in that extra guaranteed income, but if it's going to end up in a DC pot anyway I wonder if it's worth cutting out the middleman...