Pension Input Amount for CS Classic and Alpha

theblueflash

I’m trying to help my brother-in-law with some pension calculations as he has a lump sum that he’d like to add to a SIPP but needs to calculate approx PIA to work out how much he can contribute. Assuming Capita will never turn round a formal request even for 2024/2025 in time - how could we go about getting the approximate value ? He has 25 years in Classic , rest in Alpha and annual salary of £64000. Any pointers appreciated on what we need to plug in and how would be greatly appreciated.

Isthisforreal99

24/25 ABS's uploaded to portal today.

hugheskevi

The process is set out at this link. Work through it for classic and alpha separately, and add the pension inputs together to give the total pension input.

A salary of £64K will give an alpha pension input of around £24,000 before taking into account inflation and classic input. Classic input should be minimal unless he has been promoted within the last couple of years, or got a decent pay bump for any other reason.

So he is unlikely to be restricted by the Annual Allowance, unless he has had a decent pay increase in the last 2 years or made other pension contributions.

horsewithnoname

Classic - reckonable service/80 x last 12 months pensionable pay (at full time rate if part time), if below 60 then the relevant actuarial reduction factor needs to be applied

Standard lump sum is 3 x pension, again the actuarial reduction factor if under 60. - the tables are on the capita members hub

You can take 33/14 x pension as extra lump sum at a rate of £12 lump sum for each £1 reduction in pension

Alpha is 2.32% of pensionable pay each year, added to any bought forward and uprated by the September CPI figure. Again, any relevant age reduction factor should be applied. No automatic lump sum but you can take up to 30/7 x pension as a lump sum same rate of 12:1

There is also the McCloud judgement where you choose classic or alpha for the 7 years 2015 to 2022. Unless you have had a recent promotion or two, then alpha is often better because it accrued nearly twice the rate of classic, and the inflation increase has generally outperformed the pay awards. But you get the figures for both options, with standard and maximum lump sums on your options form.

There is a lump sum calculator on the website, which works for all schemes.

hugheskevi

Classic - reckonable service/80 x last 12 months pensionable pay (at full time rate if part time), if below 60 then the relevant actuarial reduction factor needs to be applied

Standard lump sum is 3 x pension, again the actuarial reduction factor if under 60. - the tables are on the capita members hub

You can take 33/14 x pension as extra lump sum at a rate of £12 lump sum for each £1 reduction in pension

Alpha is 2.32% of pensionable pay each year, added to any bought forward and uprated by the September CPI figure. Again, any relevant age reduction factor should be applied. No automatic lump sum but you can take up to 30/7 x pension as a lump sum same rate of 12:1

Pension Input is based on benefit entitlement as at Normal Pension age with the automatic lump sum added (if any), so actuarial reduction and lump sum commutation is not relevant.

There is also the McCloud judgement where you choose classic or alpha for the 7 years 2015 to 2022. Unless you have had a recent promotion or two, then alpha is often better because it accrued nearly twice the rate of classic, and the inflation increase has generally outperformed the pay awards. But you get the figures for both options, with standard and maximum lump sums on your options form.

Pension Input calculation is based on legacy scheme membership for 2015-22.

Everything you say is accurate, but not relevant to the question asked.

theblueflash

Thanks @hugheskevi and @horsewithnoname that’s brilliant starting point and explainer, I hope with carry-forward that it should all be ok (lump sum is £35K but there is a SEO to G7 promo which means nothing to me but may to you!) ) but would appreciate the reassurance of having the numbers - thank you.

hugheskevi

there is a SEO to G7 promo which means nothing to me but may to you!) )

That could be quite significant, and depending on the exact timing will have led to a spike in his pension input. He will probably have enough carry-forward available to enable him to do whatever he likes.

To do the calculation, you will need details of exactly when his salary changed, as his final pensionable earnings in the Pension Input calculation for classic are the 12 months to 6th April.

For alpha, all you need are his pensionable earnings in each financial year (P60s would be a good starting point) - but it will probably be easier to use his earnings in the year to 31st March, the difference will be trivial.

In an ideal world, what he needs is a Pension Saving Statement that will show his Pension Inputs for 2025/26, 2024/25, 2023/24, and 2022/23. This can be requested from Capita, and the deadline to provide it is 6th October. But if your calculations show he has plenty of carry-forward you might feel you don't need to wait for that.

kermchem

To add a few complications to the calculations, if OP's brother-in-law has a lump sum of £35K that he wants to add to a SIPP in 2026/7 then the SIPP provider will add tax relief (£8750), brother in law goes from a higher rate tax payer to a basic rate payer, (his basic rate band gets increased by £43750) but can claim back the tax he has paid at 40%.

To work out if annual allowance has been exceeded then you need the pension input amount for 2026/7 for CSPS, which is going to need guesswork as the ABS will not appear until August 2027 even if Capita try. And, anyway with plenty of carry-forward it will all be OK.

ClashCityRocker1

https://forums.moneysavingexpert.com/discussion/comment/81997651#Comment_81997651

he should have received previous years for Mcloud years

hugheskevi

https://forums.moneysavingexpert.com/discussion/comment/81998029#Comment_81998029

He will only have received a Remediable Pension Saving Statement (RPSS) showing inputs between 2012/13 and 2022/23 if he was eligible to receive one, but on the information given, he probably wasn't in scope.

Pension Saving Statements are sent to those earning over £100,000, those who breach the Annual Allowance, and those who request one. Given he was at most an SEO back in 2022 he is unlikely to have breached Annual Allowance, so unless he requested a PSS in the past he would not be in-scope of receiving a RPSS, as RPSS are only sent to those members who were due PSS in one of the years between 2012/13 and 2022/23.

As the RPSS only covers up to 2022/23, it is of little use for what the OP needs. A 2026 PSS will show 2022/23 pension input, and it is unlikely (but possible) that earlier years would be useful.

ClashCityRocker1

https://forums.moneysavingexpert.com/discussion/comment/81998058#Comment_81998058

If he got promoted from SEO to G7 and was partly in Classic he is likely to have breached the year's allowance