Civil service pension - dept international trade

[londonlass48]

Have an interview for Civil service coming up. Dept int trade.

Anyone explain the pension to me? Think it's grade 6 or 7.

Any other non obvious civil service benefits? Thanks

7.35% contribution required for most G7/G6 salaries. It's a good career average pension for that so not something you'd want to opt out of. Benefits inc lots of flexibility, often formal flexi time, regular wfh (even pre pandemic), current Ts&Cs for most depts for new joiners are 6 months full pay for mat leave, 5 months full pay 5 months half pay for sick leave, special paid leave to cover special circumstances (e.g. covid homeschooling). Good job security, good career progression etc.

Different depts can have slightly different terms. Annual leave will probably rise from 25 to 30 days over 5 years service, plus an extra day off for the Queen's birthday.
We are able to take 3 days special leave .
with pay to do volunteering per year.
Our sick leave for new joiners rises from 1 month in the first year to 5 months after 5 years service.
No business class travel or first class trains though if travelling (even if you can get cheap first class tickets it's a no). Not a big deal for most people but if the role involves a lot of travel and you're used to a better experience in the private sector something to be aware of.

Thanks!

@Dinosauraddict so if the salary is £60k I put in 7.65% so say £600 or something a month, then say I do 10yr service would this mean I get 10/46yrs * £60k so around £12k pa pension from age 67?

Assuming pay stays at £60k. Thanks!

If your salary was £60k pa then you'd pay c. £367 pm on pension. All the rates can be found here: www.civilservicepensionscheme.org.uk/members/contribution-rates/. Calculators are here (I think you can use most of them without logging in as a member): www.civilservicepensionscheme.org.uk/members/member-calculators/.

@londonlass48

Thanks!

*@Dinosauraddict so if the salary is £60k I put in 7.65% so say £600 or something a month, then say I do 10yr service would this mean I get 10/46yrs £60k so around £12k pa pension from age 67?

Assuming pay stays at £60k. Thanks!

I hope you are not in charge of finance or bugets if you think 7.65% of £60k is £600 a month. x

Lol @CliftonGreenYork just quick guess!

So @Dinosauraddict once the £365 has gone in, then is my other calculation roughly right? So if I did 10yr or say 46yr (?) expected working life, I'd get 18% of average salary from age 67 so approx £12k pa ? Thanks

To do the calculation, you build up pension at a rate of 2.32% of your pensionable pay per year you're in the scheme.

Alpha. Scheme is £60,000 x 2.32% = £1,392 per year. After a year this is increased by CPI each year.

So if you worked 10 years you would get a pension of at least £13,920. You can draw in full at your state pension age.
www.civilservicepensionscheme.org.uk/

I should of added pension contributions reduce taxable pay so you get tax relief on them.

If it's grade 7 it'll be 5.45% as the cut off to the next pension contribution rate is 56k and DIT G7 is under that (wasn't sure if you plucked £60k out of nowhere, if not it's G6 and yes the higher contribution rate).

No business class travel or first class trains though if travelling (even if you can get cheap first class tickets it's a no).

Really? I was allowed to book 1st class as long as it was the cheapest option which it was a few times on CTM bizarrely in early 2020.

I have also been allowed to book first class as long as it was cheaper. Focus should be on delivering vfm so if first is cheaper that makes sense.

Plus can save on subsistence if a meal is provided!

Your pension moves with you. So if you move from one department you do not need to start a new one

Thanks all
@folloyourarro salary is £65-70k I think so oh good it would be a higher % ?

I earn more in private sector hence trying to work out if worthwhile. Current job puts in 12% pension but is defined benefit.

@londonlass48 yes that'll be the higher rate, civil service pension is about 26% contributions from the employer.

@folloyourarro

No business class travel or first class trains though if travelling (even if you can get cheap first class tickets it's a no).

Really? I was allowed to book 1st class as long as it was the cheapest option which it was a few times on CTM bizarrely in early 2020.

It can also depend on the department within the Civil Service. In the MoD 1st class could be justified for higher grades/ranks or for long distance travel. It was dropped and 2nd class is now the standard, even if a 1st class deal can be obtained cheaper.
(I have not attempted 1st class for some time) but it may be possible to get cheaper 1st class approved, but I think it’s still a blanket denial - FOI requests by the media seek out 1st class travel to produce newspaper headlines of fat cat civil servants travelling in luxury whilst soldiers are on operations

I did a few big trips around the UK for a week at a time jumping between flights, trains and cars quite a few years ago. The travel team were putting me in business class. Use of the lounges and ‘free’ meals etc meant I was arriving off each flight relaxed, fit to drive, getting to more destinations per day, spending less on subsistence, and having less nights in hotels. However policy changes took me out of the lounges and into ‘standard’ waiting areas on hard seats, buying meals, arriving tired etc, driving less, having to add another day or two and adding to the overall cost

@Tommika for us it's just what is cheapest and if you haven't selected the cheapest option you have to justify why and it can be audited, so I will often choose a room with breakfast which is more expensive than the standard rate of course but can justify as breakfast is included, or because the train times are better suited. If the first class ticket is the cheapest option (doesn't happen too often as you can imagine! I sometimes wonder if they try to offload some of their first class seats via CTM) then the system either doesn't challenge you or you can select it's the cheapest option (can't remember which....It's been a while!) this is Defra.

But yes I can imagine how that would look on an FOI if someone asked how many first class journeys had occurred!

@londonlass48

Thanks all *@folloyourarro* salary is £65-70k I think so oh good it would be a higher % ?

I earn more in private sector hence trying to work out if worthwhile. Current job puts in 12% pension but is defined benefit.

Civil Service employer pension contributions on £60k are 27.9%. Most people overlook this when looking at the total reward package.

With a look through the ‘benefits’ page, these are Civil Service and/or MoD, and can depend on local facilities:

30 days annual leave
8 bank holidays
1 privilege day
Special leave
Adoption, maternity and paternity leave
Flexible / alternative working
Childcare vouchers (potential on site / adjacent childcare)
On site Parking
Cycle to work scheme discounts, Bicycle / season ticket purchase, & tenancy deposit advance loans
Discount offers
Civil service sports council
Defence sports & recreation council
Pension schemes, top up schemes
Death in service benefit
Microsoft home use discounts
Civil service charity
On site gyms
Training & development
In year rewards
Imperial service medal (long service medal on exit for below management grades)
Medals & honours

The death in service is a good one to note

@londonlass48
"I earn more in private sector hence trying to work out if worthwhile."

As you are finding out though, the civil service pension, especially when you go in direct on a high salary compensates for a lot of salary. We worked it out going the other way from public sector to private that DH would need a whopping pay rise to compensate unless the private pension did exceptionally well. Work out what lension each year you would get and multiply x 16 and that would form a rough guess as to the benefit you would need to at least equate to in a private pension. Advantages of course is private pension is more flexible

Civil service pensions very good, though not as good as when I started. I’m 20yrs in now and so I have a fair few years on the old pension where you could retire at 60, then the remainder will be on the new pension. I’m an SEO. I do think the civil service is very flexible, so if you’ve got a family then good place to be, never had to miss a sports day, assembley etc. We have flexi, most departments do but not all. 5 days per year volunteering (just started mine for the witness service). Lots of opportunity to move around, you could work overseas if you wanted. One thing you won’t get is big bonuses though, so factor that in if you’re used to that in the private sector.
I get 30 days leave per year, as I have over 10 year service.
Once you’re in there’s a good calculator for your pension, so you can play around with the figures re retirement age and lump sump etc. Mine is very generous, much more than I imagined

The Civil Service Alpha pension accrues at 1/43 per year. This is the Career Average one you’d join.

It is defined benefit, so what you will get is determined and you can know it now. Quite what you pay in/employer pays in could vary a bit over time, but what you get out won’t.

As it accrues at 1/43, an easy way think if it is that if you earned £43k you’d add £1k to your pension each year. In 10 years, your pension would be more than £10k from state retirement age as it would have also had been index linked for inflation.

Notice the current pensions are linked to state retirement age. That means you can only get the full amount at that point. You can retire early and take the pension from 10 years before your state retirement age, but it will be actuarially reduced as you’ll receive payment for longer. You can stop working sooner and not take it until state retirement age with no impact.

What you pay in is determined by your salary and is a % as people said. This could be adjusted by government over time, but probably not much. It is true that the government is maki g contributions of over 27% to the pension. Whilst it is true this high, o paring to what a private sector employer would pay into a private pension isn’t a very useful comparison, because that 27% isn’t directly connected to what you get out as it’s not defined contribution but defined benefit. If the government suddenly say the employer must pay more in, you will still accrue at 1/43. So yes, one reason why the pensions can be generous is because the employer pays lots in, but actually this pension is funded through general taxation and not directly via the contributions you make.

It is a good pension. Think £1k boost to pension every year for £43k earned. If you earn more each year it will grow by more than £1k and if less, by less. You’d have to pay vast amounts into a defined contribution pension in order to deliver a pension pot that could yield £10k per year via annuity or drawdown...probably a pot of £500k would be needed.