Re-joining Civil Service - effect on pension ?

moonrakerz

Does anyone know what the current rules are if someone retires from the Civil Service aged 60 (or above) and then, at a later date, re-joins ?

I assume you don't have to repay your gratuity ? what about your pension ?

GunJack

It depends on your current pension status - are you in a grade with a normal retirement age of 60? If so, you will continue to get your pension monthly, along with new salary(minus a whack of income tax, obviously, as your personal allowance will go towards your pension rather than the new salary). It also depends on how you do it as to the effect on future pension. If you are retiring and coming straight back at a lower grade, i.e. effectively a downgrading, you may find your continued service will accrue benefits in line with your current pension arrangements (i.e. if currently in Classic) to be taken as an enhancement to the existing pension when you retire again. Or, you may find any further service will go into a new Premium scheme (as it may count as retirement and re-employment), and will ten accrue benefit at that rate(with the 3.5% contribution compared to the Classic's 1.5%). Either way, you don't repay your gratuity, bank it in a nice high-interest account !!

Sorry if it sounds a bit complex, but the rules are complex but can be understood with a bit of a nudge in the right direction If anything needs further explaination, just ask !!

dzug

The rules used to be something on the lines that your pension plus the salary in the new job could not exceed the salary in the job you retired from. If they did, they stopped paying whatever part of your pension that was necessary to reduce your income enough.

You did not have to repay the lump sum, nor any pension already paid.

You also accrued additional pension from the new job.

Things may have changed, but probably not very much.

moonrakerz

Many thanks, a few more details might help.

My wife has worked for the CS for most of her life, P/T & F/T, with a break in the middle to raise the kids.

We recently moved house and her round trip to work is now 50 miles. She is now P/T, working four full day per week. Her accrued pension ( Classic) to date is about 40% of her salary, so in effect she is working for 60% of her nominal salary. She is not paying NI, (over 60), which just about covers most of her tax.
She has given her notice in at her present place of work with the intention of getting a P/T job locally. There is a fair sized CS work force where we now live and we think it would not be difficult to get employment there, as it is the same specialisation as she is in at present.

If she were younger she would just get a transfer, but with a pension available it seems rather silly for her to carry on working for a "reduced" salary. To be honest, she is not too fussed about any additional pension (it wouldn't be refused though !) as she would probably be only working for a couple more years, and P/T.

GunJack

moonrakerz - MoD by any chance being in Wilts ?? If you dw is in classic I would be even more inclined to try and transfer rather than retire and re-employ, as the way the accrued benefits work out would be better. The other thing is that you may find it harder to get re-employed due to age (not being ageist, think of it from a recruiter's view) and also, probably more important, if re-employed she will more than likely have to go to the bottom of the payband she's being re-employed in !!! Whereas if she transfers in the same grade she'll take her current salary with her. If she's been an AO (E1 in new money) for a long while, she's probably quite away up the scale at the mo. No guarantees of this level of pay if you quit and are re-employed. Oh, and one last thing, transfer is generally less messy and won't confuse the poor souls at PPPA as much

moonrakerz

If she resigns, she could come back in at the same grade. She did when she started work again after the kids - and at the same point in the pay scale too !

The problem with a transfer is that she loses out on her pension which is available now. Her hourly rate (taking out her pension) is little more than the Minimum Wage, she would hardly be worse off working in McDs. By working on, she is "losing" over £4 an hour, her pension will increase by just under £4 a WEEK (for each additional year worked) at the same time. This really doesn't make much financial sense. To be really silly, if she came down to 13 hrs a week her salary would be the same as her pension and she would, in effect, be working for nothing !

I think the answer is to see what is available once she has actually retired.

Many thanks for the comments.