Confusion over McCloud option selection

Kratos68

Like many others, I have been sent the RSS pension choice illustration. After choosing the Alpha option with increased lump sum, I am now informed by CSP that I will not receive the stated sum because I did not specifically request it in the correct tick box. It was not stated in the documents that this was an additional requirement and there is no additional requirement to specify any of the other benefits. . The regulations state that the pension selection is irrevocable. CSP are reading the regulation to mean that no amendment is permitted. I disagree. I am not seeking to revoke the Alpha selection, but rather to correct an error resulting from what I consider to be misleading and/or unclear information. I’d be interested to know if anyone else has a similar experience or issue? Have any challenges or complaints been reported based on misleading information? I’m going to need some help with this one as I stand to lose a large lump sum. Any help or advice would be greatly appreciated. 

NormalNorman

Had a quick look at the documentation from MyCSP regarding the remedy. It says I don't need to make a decision until I take the benefits. I guess you are at that stage?

m_c_s

The forms with your retirement quote for choosing lump sums are not linked to whether you choose Alpha or not; they are separate forms. 

There two separate forms provided with your quote, they are are "alpha pension scheme – Lump Sum Option Form" and "Classic(or other CS pension) pension scheme – Lump Sum Option Form".

For the alpha lump sum form you have 4 options which you have to tick and provide other information as requested:
Option 1 - no lump sum (tick box)
Option 2 - maximum lump sum (tick box)
Option 3 - your chosen lump sum less than maximum (tick box and define what you want)
Option 4 - allocation (you can give up some of your pension to someone who is financially dependant on you after death)

For the classic/premium etc the form is the similar except you can tick another option to inverse commutate your lump sum for extra income. As with alpha you just tick the relevant box for no additional lump sum, maximum lump sum or choose a precise amount of lump sum and state what it is.

Did you receive this form and which option did you choose? Did you tick Option 2 or 3, and if 3 specify your lump sum amount?
What do you mean by misleading information?
The only thing I can think of is you chose Option 3 as an additional lump sum less than maximum but did not specify what you wanted (to be fair it does clearly state to write down the precise amount you want to take).
I would have thought they would have got back to you to ask why you ticked that box but not state a value.

Marcon

Where's @hugheskevi when you need him....

Yorkie1

m_c_s said:

For the classic/premium etc the form is the similar except you can tick another option to inverse commutate your lump sum for extra income. As with alpha you just tick the relevant box for no additional lump sum, maximum lump sum or choose a precise amount of lump sum and state what it is.

I knew that you could commute the pension for extra lump sum at a rate of 12:1, but had missed or forgotten the inverse commutation point that you "may be able to give up all or part of your lump sum in return for an increase in either your own pension, or in your own pension and your widow’s, widowers’ or surviving civil partner’s pension" - taken from the website (heading 'Choices on retirement').
Retirement - Civil Service Pension Scheme

Does anyone know what sort of figure this exchange rate would be at?

m_c_s

I looked at inverse commutation a few years ago.
The only reliable information I could find was this 2019 Government Actuaries Civil Service pension document detailing the calculation and factors for Classic pension:
https://www.civilservicepensionscheme.org.uk/media/rw4a3mg1/inverse-commutation-factors-and-guidance-classic-pcsps.pdf

There may be a more recent document and changes to factors but when I did the calculation a few years ago it was approx 17:1 and 19:1 (includes death benefit for spouse increase). There maybe improved factors now.

missdirection

I too have fallen into this trap. 

I received the RSS statement with the figures for option 1 ( basically stay the same) or the new Alpha benefits Option 2 with the enhanced lump sum and reduced pension. As a retired member in my seventies it made sense to choose Option 2. Before completing the form I attempted to contact the helpline on numerous occasions for general guidance as there were so many figures involved, but each time was met with a recorded message about industrial action and was promptly cut off. I proceeded to choose Option 2 and submitted the form but did not receive the lump sum I was expecting. After yet more attempts I managed to speak with someone who confirmed that it appeared that calculations had been made using Option 1 and would pass this across to the correct department for amendment. Approx 2 weeks later I received an email stating that although I had chosen Option 2 I had ticked the incorrect box beneath it and it was interpreted that I had meant to choose the lump sum in option1 and that this decision was irreversible. Looking at the form again I fail to see how my selection of Option 2 could mean that I wanted the lump sum from Option 1.  I have subsequently emailed the pension department pointing out that it was not my decision they have acted upon and have requested that they change it accordingly. At this time I am awaiting a reply.