Civil service pension - alpha

[nameychangio675]

Paid into this from 2015 to 2020. I was part-time for most of it. Statement says I will get circa 1300 per year from age 68. Is that right? Is that until I die? I can't figure it out.

It is until you die.

Nobody can say whether it’s the right amount without knowing your yearly salary / accrual rate (i.e. how much pension you get for each year worked).

It seems quite low for 6 years worked but you may have had a very low annual salary due to the part time working.

@CrabbiesGingerBeer thank you! That is helpful. I think my earnings would have been low but I am just pleased to have an annual amount given until I die. I thought I might just have a pot and when that was gone it was gone!

Civil service pensions are unfunded* - there is no pot, the pension is paid from taxes.

*You can buy additional pension and I think one of the methods gives you a pot. However, alpha is the main type and definitely is unfunded.

ahhh ok i had no idea!!!! Thank you - this is honestly so enlightening!

I think the difference is that unlike a private pension where there's a pot of the money you have paid in sitting somewhere, the civil service one is more of a 'promise to pay' the amount on your statement. And when it kicks in that's the amount you'll get annually until death.

Thank you - god this is a revelation!

You can go on a Pension Power course and also MyCSP run other sessions.

I spoke to a chap at Civil Service Live - he said if you ring up they also help over the phone

I think Alpha is a career average scheme so the pension will be based on a fraction of average salary (60th?), increased annually by CPI, for each year of service.
Payable from when you attain pension age, currently expected to be 68 by the thirties.

Yes, per annum. It’ll also increase in line with inflation.

@Bromptotoo thats not how it works. Each April they look at your pensionable earnings for the last financial year (April to March) and multiply by 2.32% the figure is then banked. On the 12 month anniversary, and every year after they apply an annual increase (cost of living so varies each year).

The 1/60th or 1/80th is known as a final salary scheme not career average.

Thanks for that. Being in the final salary cohort I'd not fully understood how career average schemes accrue.

So the fraction that accrues is 2.32% pa? Is that fixed or can the employer monkey about with it as regards future years?

Happy to be corrected and to learn.

The 2.32% is fixed, but like any pension scheme it is reviewed regularly. Given that they have only just transferred everyone into Alpha it should be a while before they review it. The standard practice is what you have earned to date in a scheme is preserved and the changes apply going forward.

Civil Service Pensions website does set everything out. You are likely to be affected by the McCloud Remedy, my advice start to look at your annual pension statements and the website to slowly build up your pension. They have webinars, calculators etc.