CS Alpha -

hushpuppy

I am trying to understand a number of questions with regards to my Civil Service Alpha Pension.

My quandary is do I take my pension at 60, which means there is a reduction for every year before my NRA (67) if I do, or defer it until 67.  

Also if I do take it at 60 am I wasting money by continuing to keep overpaying into it via 50% salary sacrifice until I retire in October 2027?

Additionally, if I keep paying in and take it at 60 what will the annual pension be after deduction v if I deferred until 67?

As I understand it there is a 5% reduction for every year before NRA, so in my case 7 x 5 = 35% reduction.

I also understand there may be an option to buy out the reduction with a one off payment, how do I work out what this would be please?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6659501/cs-alpha

How are you able to use salary sacrifice for Alpha?

Can you overpay by 50%?

Are you planning on partially retiring at 60?

Also, I suspect you might find the reduction at 60 (if still relevant) is a bit less than 35%

horsewithnoname

for normal pension age of 67 if you take your alpha at 60 it is 70% of the amount it would be at 67.
mid you buy more pension you get more, albeit actuarially reduced if you take it before NPA, but you get it for longer, so you have to weigh up what suits you and your circumstances best.
I don’t think salary sacrifice is an option in the civil service scheme.

Emmia

Salary sacrifice can be done in the CS scheme, via AVCs - I presume this is what the OP is doing?

https://www.civilservicepensionscheme.org.uk/memberhub/kbarticle/?id=KA-01204#:~:text=If%20you%20are%20a%20member,Voluntary%20Contribution%20Scheme%20(CSAVCS).

https://www.civilservicepensionscheme.org.uk/employerhub/kbarticle/?id=KA-01167

hugheskevi

https://forums.moneysavingexpert.com/discussion/comment/81922510#Comment_81922510

The rules do permit employers to contribute to a member's AVC, so theoretically salary sacrifice to AVCs could take place.

However, it is not the policy intent to have AVC contributions as salary sacrifice, and net pay is the standard approach. So it might be possible (but unlikely) that maybe a small new Fair Deal employer could do AVC salary sacrifice, but none of the big Departments will offer it.

The references cited are about the treatment of salary sacrifice for things like bicycle purchase. The policy intent for those is that although salary sacrifice saves income tax and national insurance, it does not reduce pensionable earnings for the purposes of pension calculation and contributions.

horsewithnoname

https://forums.moneysavingexpert.com/discussion/comment/81922510#Comment_81922510

op specifically says alpha, you can’t salary sacrifice into alpha. You can buy extra pension which I assume is what the op is doing (or you can buy a reduced pension age), but you can’t do salary sacrifice in the alpha scheme

hugheskevi

https://forums.moneysavingexpert.com/discussion/comment/81922553#Comment_81922553

The rules do permit employer funded purchases of alpha Added Pension, so salary sacrifice purchases of Added Pension would be possible in theory. But as with AVC contributions, policy is that purchases are made through net pay (or direct to the administrator) and not via salary sacrifice. So it could happen with an employer not under Civil Service pay policy constraints, probably a new Fair Deal employer, but even there it is unlikely.

The rules do however specify that alpha membership requires member contributions, so salary sacrifice cannot be used for normal alpha accrual, by any employer.