Anyone understand classic civil service pension terms please?

[Plansplans]

I have a small pension from years ago that stopped when I left the civil service. Its final salary and I paid in 11 years.

I understand I can take it from when I am 60 and it will be worth 11/80 th of final salary. Which would be just over £4k a year. With 1.5 times final salary as a lump sum. Is it always 1.5 times as a lump sum, whether you paid in 10 years or 40 years?

I work in the civil service again, different pension. Can I get paid my classic pension and continue working?

I think I can take it early but not sure of conditions.

If I take the classic pension early at 55 i understand it will reduce by 5% per year. But how would it affect the lump sum?

I am not an expert in civil service pensions but do know LGPS which is similar. The best thing to do is check with your administrator who will be able to give you accurate information.

Lump sum - I don’t think 1.5 times final salary can be right. Usually with the pension accruing at 1/80th the lump sum accrued at 3/80th i.e. 3 times the pension. Have you had annual benefit statements that quote the current value of benefits? These will include the value of the lump sum.

If you retire early then usually the lump sum is also reduced, but the reduction factor might be lower than the pension reduction factor. The administrator can confirm.

I don’t know whether you can take the classic pension and keep working.

Thanks. Haven't seen a statement. Trying to track one down. The 1.5 times seemed too much. That came up on a Google search.

Some aspects - particularly working while being paid Classic pension - need a bit of research but otherwise...

Classic, unlike the later Premium scheme, accumulates in eightieths; after 40 years your pension would be 40/80ths so half of final salary. In your case 11/80ths of your last year's salary* which would be increased by RPI/CPI for each year that elapsed since you finished.

*It can get more involved if you're still 'in harness' at retirement as, at least based on my experience in Premium, there's a 3 stage process which looks at your last year, the best in the last three, or the best average over (IIRC 3 years in your last seven). They call this dynamisation. I did very well out of it as the three out of seven was before salaries were frozen.

As I underdtand it lump sum is a multiple of pension payable so if you take an actuarily reduced pension before 60 then I'd expect the lump sum to be based on what you actually get.

You don't get the full 1.5 times. You get 3/80 for every year so 11 x 3/80.

The Civil Service pensions website is really good with loads of information, and you can probably log in for information about your own pension.

classic scheme guide - Civil Service Pension Scheme

What's said there about lump sum on older schemes rings a bell. As I moved from Classic to Premium to get a partner's pension lump sum as of right wasn't a thing. My OH, a Teacher, got 3* pension as a lump sum though.

Looking again 1.5final salary is much the same as 3 pension IF you've done 40 years and get half salary as pension.

Thanks for the replies. I have indeed found my exact pension details - and the lump sum is 3 times my pension. I think I had seen figures similar to these when I looked at it some time ago so they are what I was expecting.
Now to try understand taking it early! It may well make more sense to borrow at 55 and wait until 60.

An actuarial reduction is based on statistical life expectancy which reduces your initial pension to take care of the fact that it will pay out an additional 5 (or whatever) years. Over the rest of your life it should work out the same in total.

Yes you can take the classic pension at 60 and stay working (several of my colleagues are doing this). But your pension plus new salary (normally part time) can't be higher than your salary immediately before retiring.

Thank you. Good to know.

@Plansplans good advice regarding your classic pension.

You can take your classic pension and still work in the CS, I assume you want to phase into retirement. Partial Retirement explained here https://www.civilservicepensionscheme.org.uk/planning-for-retirement/what-are-my-options/partial-retirement/

If you log on to your account on the pensions website there are modellers that can work out the actuarial reduction in your classic pension.

As you returned to the CS I assume you are in alpha, have you checked to see if you are impacted by the McCloud remedy - I suspect not but it’s worth 5 minutes checking.

Also check your state pension eligibility, being contracted out can impact entitlement.

I am quite a way of retirement still but thinking ahead.

I think i am in the Local Government Pension Scheme but I won't have many years, low pay and part time hours so assume very little. Will look into it.

If am mortgage free by 60 I could live on a lot less before eligible for the state pension.

Looks like I was contracted out and it states the amount equivalent as £19.30 a week. So much to understand.

Thank you for the help.

Local Government Pension Scheme (LGPS) is similar to the Civil Service Scheme in terms of history and benefits but it's a different scheme.

That may be relevant if you want to continue working with pension in payment.

Log into the retirement modeller on the myCSP website and you can adjust the lump sum/ retirement date etc to work through different scenarios. You will need the details from your Annual Benefit Statement. You can take partial retirement at 60 and claim your classic pension but you would need to reduce your earnings by 20% either by reducing your hours or taking a demotion. They are running pension webinars again at the moment.

sorry but does anyone know if you are sble to take the lump sum that is shown on pensions portal at age 55 I don't think it's linked into pension in anyway its a percentage of it don't think it reduces your pension by taking it?

You can only take your pension and lump sum at the same time. If you take them early then both are subject to actuarial reduction.

Use the modeller to show the impact.

thanks yep I've since worked this out that if you take lump sum early .you have to reduce your hours and pension is reduced think.i will retire at 60 completely and take pension and lump sum then five years to go thanks for your helpx

Hi, I'm new to this group, so hi all. I understand if you're in the civil service classic plus pension scheme and you want to take it early, the pension will be reduced by 5% for every year before the pension age which is 60 in this case. I'm interested to know how this would affect the additional lump sum. Does this reduce by 5% for each year. For example I have used a calculator and also taken the 25% additional lump sum but have no idea how this will reduce if pension is taken early. I've also tried to use the modeller but it isn't working. Many thanks if you can advise.

I think the lump sum does reduce the earlier you take it

@Harveym yes the lump sum is reduced too. There is a modeller on the MyCSP pension portal.