In the early stages of comparing job offers I have and at (about to be) 50 year of age, pension is a factor!
Anyone know what the civil service pension is now for a new joiner? What the contribution / benefits etc are?
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>> This appears to be the current CS pension for new joiners:
>>
>> www.civilservicepensionscheme.org.uk/members/alpha-scheme-guide/
Not the scheme I joined 41 years ago still less the enhanced 'Premium' scheme I moved to in 2002/3 but a damned good deal by today's standards.
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I'm not very good on pensions terminology even though I used to work with Aviva on Group Pensions back late 80s/early 90s in the days of SERPS, contracting out, Section 32s etc!
Brompt can you give me a laymans language on the current scheme? From my reading there is 2x salary DIS but other than that I am struggling to see
a. what the benefits are eg if I join now aged 50 and work to 67
b. what are my contributions each month?
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....Bobby, it appears that the scheme for new joiners, "alpha", is essentially an "average salary", defined benefit one.
Not as good as a final salary one, but still reasonably gold-plated.
A very quick browse seems to indicate that an amount equal to 2.32% of pensionable pay (most of the salary will be pensionable) is accrued each year against final annual pension (not into a pot, but directly related to the final annual pension amount). There is an annual inflationary adjustment, which is probably (only looking at the headlines) related to CPI.
In very (very) approximate terms, this would mean a career of 17 years at a flat salary of £30000 p.a. would accrue 30,000 x 17 x 2.32% p.a. as a pension. i.e. around £11,800 p.a.
(Caveats all round that this is just my understanding - It also doesn't allow for some of the pay to be unpensionable - the guidelines say most is pensionable - or for any inflationary increases before it is drawn. Of course, should the salary increase during the term, the amount will also increase)
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Bobby,
I'm not familiar with the Alpha scheme as I'd already left when it was introduced and if I'd remained in service I'm old enough not to have had to joint it. My former colleagues who are in complain loudly about having to work to 67 although at least one hasn't grasped she can take her old scheme benefits, service from 18 to 50(ish), at 60.
The rate at which pension accrues is set out in section 01B of the guide linked above. As I understand it pension builds at rate of 2.32% of salary for each year. The example suggests that on a salary of £20k you accrue pension of £464 which is then increased annually by the relevant index. At the moment that index is consumer prices but the treasury can chose a different one or apply a reduction if the index is negative.
Using your potential service from 50-67 you'd accrue 17 lots of £464 (but in real world more as the pay freeze will end eventually!) with CPI being applied to the pot annually. On a frozen salary and zero inflation your pension at 67 would be c£7,800.
That is actually more than someone in the old Premium scheme would get on a final salary of £20k (20/60x17=£5666).
Somebody with more ability with number than I have can probably work out what increase you'd get if RPI was a steady 2% or whatever.
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>>
>> Somebody with more ability with number than I have can probably work out what increase
>> you'd get if RPI was a steady 2% or whatever.
>>
....don't know. But if CPI ( ;-) ) were a constant 2%, something around 37% at the end of 17 years.
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For each year's pension earned, with CPI at 2%, the revalued amount would be
earned amount *1.02^n where n is the number of annual revaluations.
So the first year's £464, revalued 16 times, would be worth c £637 (about 37% more) in nominal terms.
Your second year's would only be revalued 15 times, and so on.
But the real terms calculation is more useful. The pension, assuming Bromp is right about how it works out, would be worth £5666 (per £20,000 starting salary) in today's money, assuming you maintained your salary in real terms too i.e. you got CPI increases throughout.
I'm pretty sure the government pensions use CPI not RPI.
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Trying to understand the above, and widen my knowledge, makes me glad that being self employed I only paid into a private pension for 5 years, aged 20-25. A wise friend told me that I’d be much better putting my monthly pension saving into a larger mortgage on a nicer house, in a much nicer area ( not Bradford) enjoy the benefits of living in it, and any future property value increase would be completely tax free ( I did lose half the house after some unpleasantness 20 odd years ago )
I took my 25% tax free allowance from my small pension as soon as I could...think I was 54 yo.
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>> Trying to understand the above, and widen my knowledge, makes me glad that being self
>> employed I only paid into a private pension
>>
Hmm. As a self-employed/director of my own company, I paid into a private pension plan - Equitable Life, remember them?
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My ex FiL had a pension with Equitable. I can’t remember the exact circumstances now but it ended in tears.
I’ve always been a standard rate tax payer, but still got 20% tax relief on my contributions if I remember correctly. Much better tax relief if a higher rate tax payer i think ? But as my friend told me many years ago, even if the value of my pension pot went down I’d still be paying a hefty annual % in commission, and more importantly, he said that as it would be 30+ years between me making contributions aged 25 and buying an annuity, advances in medical science should mean that us humans live longer and consequently get a smaller annual pension when the time comes. Dont believe the pension company projections he said.And my father died aged 51 having paid into a pension for many years and never got to enjoy it.
Hence I stopped paying into my pension after only a few years whilst in my mid 20s.
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NHS pension has death-in-service benefit (twice annual salary lump sum and half-rate pension for spouse for life)
So at least if I kick the bucket there's some payout.
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>> he said that as it would be 30+ years between me making contributions aged 25 and buying an >> annuity, advances in medical science should mean that us humans live longer and consequently >> get a smaller annual pension when the time comes.
>> And my father died aged 51
>> having paid into a pension for many years and never got to enjoy it.
>> Hence I stopped paying into my pension after only a few years whilst in my
>> mid 20s.
>>
The life expectancy thing is dealt with to some extent by making the age you can get it much older, my kids will not be able to collect pension, certainly state pension, this side of 70 years old, probably more.
Any pension arrangements need to deal with what happens if you die before you collect it, does it become part of your estate, carry on as a partner pension etc.
In my case, having started work 42 years ago and been in the same company pension scheme as it has evolved over that time I not only will get a final salary based pension when I take it, probably next year, but like Lygonos, have had a pretty substantial life assurance and dependent pension built in through my working life
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Thanks for the input guys, I am trying to compare this with another job offer which is a straight forward 8% employer cont (not sure of employer contribution) which I assume will just be a standard pension fund arrangement.
Been applying for jobs since July and then get two offers within a day of each other!
Civil service on was closing date 18 July, interview end of August, job offer 11 October - they don't rush into things do they! And no mention of a start date at this point!
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>> Civil service on was closing date 18 July, interview end of August, job offer 11
>> October - they don't rush into things do they! And no mention of a start
>> date at this point!
Not changed much in forty years then. My job offer was conditional on A levels but it still took two months, August to October, to post me to a vacancy that had existed since June.
My son had an even longer wait, probably nearly a year from interview to post. I think Brexit uncertainty, he works on settlement for EU citizens and their dependants, may have been part of it.
Security clearance was another delay point.
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Am waiting for a call back from them to see if they have a start date in mind. Not sure if there is a group of people starting at same time or just me! At this stage they are just doing references / awaiting disclosure and have stipulated not to submit resignation until I get my formal offer once these checks have cleared. Obviously I am not working now and don't need to submit notice to employer etc but I am thinking that they probably aren't looking at this side of Christmas at this stage?
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>> Am waiting for a call back from them to see if they have a start
>> date in mind. Not sure if there is a group of people starting at same
>> time or just me! At this stage they are just doing references / awaiting disclosure
>> and have stipulated not to submit resignation until I get my formal offer once these
>> checks have cleared. Obviously I am not working now and don't need to submit notice
>> to employer etc but I am thinking that they probably aren't looking at this side
>> of Christmas at this stage?
Do you know what level of disclosure/vetting is involved? Even the simple Counter Terrorism Check can take 6-8 weeks. I think The Lad was subject to to the next step - Security Check - 'cos Home Office, sensitive personal data etc etc. Some of my current colleagues work on outreach at Job Centres and have to pass basic security before being allowed into the back office.
They also have a practice of selecting a pool of candidates to fill anticipated rather than extant vacancies. Do you know if you're joining such a pool?
Have a conversation with the recruiting guys and try and get a realistic estimate from them. Given that Xmas is looming and that starting people in December when festivities can disrupt induction and training might affect thinking then you're probably right about not before.
Do you have opportunity for any short term (Xmas retail?) or agency work to fill time before you start?
Last edited by: Bromptonaut on Mon 14 Oct 19 at 14:46
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Brompt, I have been doing agency work for alst few weeks in a factory - wow that is an eye opener! Literally putting products into boxes on a production line. It's so hard to switch off your 25 years of management and just become a robot when you are looking and listening and thinking WTF!!
This is a definite job not a pool - I have already been accepted onto the pool in an HMRC job (HEO) but if course that can run for a year or never come to fruition. This is an EO job and is subject to "HMG Baseline Personnel Security Standard".
The other job I have been offered is with CAS which is the Scottish equivalent of CAB. Think you have experience of both do you not? CAB seems very heavy in process with each bureau being its own charity, own trustees, seeking its own funding etc. As someone who has been in the third sector and made redundant due to cost cutting , I am wondering if civil service role may be safer?
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>> "HMG Baseline Personnel Security Standard".
That's the start point for everybody including current colleagues working in Job Centres. My earlier reference to Counter Terrorist etc concerns the next step up - Security Checks. Still takes time though.
>> The other job I have been offered is with CAS which is the Scottish equivalent
>> of CAB. Think you have experience of both do you not? CAB seems very heavy
>> in process with each bureau being its own charity, own trustees, seeking its own funding
>> etc. As someone who has been in the third sector and made redundant due to
>> cost cutting , I am wondering if civil service role may be safer?
I don't know how CAS works at all.
In England we have what is colloquially known as 'CitA', HQ people in London and varios provincial centres. They set policies, do research, provide expert advice type support and provide most of the folks who pop up on national media.
Operationally we are effectively a federation of local charities. Less local than they once were though - a lot of merging has gone on in last few years. Funding is a huge issue. We get some funding from the Borough Councils in our area but how that will work after the new Unitary Authorities due in 2021 kick in is anybody's guess.
We also get quite a bit from DWP to fund a project called Help to Claim - assistance with claiming and getting first payment in Universal Credit.
We used to have quite a few other projects funded by utility companies, local social housing providers and others to help the vulnerable and those on very low incomes.
Staff on projects and on Help to Claim are all on fixed term contracts. I've moved around four different workstreams. Dodged redundancy on two of them because I seconded so just went back to my 'home' project. Lost a load of folks to redundancy in March 'cos a big utility company funded project was taken in house.
Core staff have come close to getting at least 'at risk' letters for redundancy on occasions in time I was volunteering.
So yes, CS would pretty much certainly be more secure.
Job satisfaction on other hand......
Last edited by: Bromptonaut on Mon 14 Oct 19 at 16:38
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>>Job satisfaction on other hand....
yeah that may be an issue after 12 years working to raise money for a hospice. But I have changed careers before and happy to do it again.
Anything is better than putting bottles into boxes!
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>>> they don't rush into things do they! And no mention of a start date at this point! <<<
>>>Not changed much in forty years then<<<
Sounds like good preparation for a lot of the jobs!
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>> But the real terms calculation is more useful. The pension, assuming Bromp is right about
>> how it works out, would be worth £5666 (per £20,000 starting salary) in today's money,
>> assuming you maintained your salary in real terms too i.e. you got CPI increases throughout.
My 'real terms' calculation for the scheme Bobby would join is £7888 (17*464). The £5666 was the equivalent for 17 years service in the final salary scheme called Premium into which I paid. That accrued in 60ths so 20000/60*17 = £5666.
Assuming I've got that right it shows how career average can be better than final salary for people who stay in same salary range throughout their service. In practice of course the situation will be complicated by pay awards and/or the effect of incremental salary scales. Bobby might also hope for promotion and he'd be lucky to serve 17 years without 'pay and grading reviews' further muddying the water.
>> I'm pretty sure the government pensions use CPI not RPI.
They do. Reference to RPI was a mistake.
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Thanks for the correction Bromp. I didn't check it, which would have been simple enough!
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>> I'm pretty sure the government pensions use CPI not RPI.
They do. Reference to RPI was a mistake.
IIRC MPs Pensions are RPI linked. Well Well !!
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When do you get the company Fair Isle tank top Bobby? Or do you have to have a few years under your belt before they issue those?
;-)
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Last week in Espana I saw faux elbow patches on jumpers. Less harmful than bullfighting for the locals but what’s that all about?
And it was 25C in the evening.
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It's what you're used to (the temperature, not the faux elbow patches).
Anything less than mid 20s and I'm dressing for warmth. Less than 20 and I'll be wearing a coat as well. It'd be a very rare evening even in the middle of summer when I wasn't wearing a sweatshirt or a fleece.
When I am in the UK I spend most of the time cold and dressed warmly around people wearing shorts & t-shirts..
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>> It's what you're used to (the temperature, not the faux elbow patches).
Mrs B and I went to Granada (Spain) late March this year. Temperatures equal to or greater than UK in May. Locals, including a Brit expat we got talking to, were still in overcoats.
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Soft Southerners, eh?
Must be even worse in the lower hemisphere where NoFM2R is.
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I'm 5,857 miles South of London.
That makes me seriously soft.
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Many years ago, we were in Egypt in February. Daytime temps in the 80s and 90s.
During the day, we were in shorts, teeshirts and sandals.
Locals all had Crombie style overcoats over their Djebellas, some with woolen scarves wound round the neck and lower face - muttering about how cold it was!
8)o
Last edited by: neiltoo on Tue 15 Oct 19 at 10:11
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Back when we lived in Tenerife I well remember arriving at Gatwick in summertime ... and feeling cold.
But then again I'm sitting 'ere in shorts, T shirt and sandals in mid October!
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>>Basically, you Remoaners/traitors/German car owners, which this forum is infested with,
>>talk a lot of tosh most of the time IMO, and quite frankly I've got better things to do with my
>>precious time.
Turns out your time wasn't so precious, huh?
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In case anyone thinks, like I did, that Mark has gone mad, the quote he has used above is from God from 24 Jan this year.
www.car4play.com/forum/post/index.htm?v=e&t=26680&m=583968
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>>like I did,
Oh ye of little faith.
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>> In case anyone thinks, like I did, that Mark has gone mad, the quote he
>> has used above is from God from 24 Jan this year.
>>
>> www.car4play.com/forum/post/index.htm?v=e&t=26680&m=583968
I read post twice but only took a second or so to twig...
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>> During the day, we were in shorts, teeshirts and sandals.
>> Locals all had Crombie style overcoats over their Djebellas,
>> some with woolen scarves wound round >> the neck and lower face - muttering about how cold it was!
>>
Same sort of scene in Saudi, European guys riding in shorts to the office on their bikes with the police dressed in oversized army type overcoats covering down to their ankles
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Civil service Pension - Lygonos
