Transferring Civil Service Pensions

[SimonMac]

Looking at setting up a SIPP, and I assume if I want to get the most of it the more money I can put in there to start me off with the better, so was thinking as in a previous life I took the governments schilling it might be worth while transferring that in as it's frozen at the moment.

Does anyone have any experience of transferring a Civil Service Pension into a SIPP? I've emailed my Pension Administrator but that's gonna take 10 days for an answer, also emailed the broker I want to transfer to, and again waiting for their response, just wanted to throw it to the massed peers to see if anyone has done this before.

[pmeswani]

Looking at setting up a SIPP, and I assume if I want to get the most of it the more money I can put in there to start me off with the better, so was thinking as in a previous life I took the governments schilling it might be worth while transferring that in as it's frozen at the moment.

Does anyone have any experience of transferring a Civil Service Pension into a SIPP? I've emailed my Pension Administrator but that's gonna take 10 days for an answer, also emailed the broker I want to transfer to, and again waiting for their response, just wanted to throw it to the massed peers to see if anyone has done this before.

I had a public sector pension which was a Protect Rights pension, as I had opted out of SERPS. I transferred this to my SIPP pension, but it is ring-fenced from my main pension fund, which means I could not add any funds into this part of my SIPP Pension (So in effect I have 2 SIPP pensions. 1 is protected and one that I can carry on contributing in to). I believe this will be lifted at some point, but can't remember when. I don't know much about the Civil Service Pension scheme, but would expect it to be similar. But it may be worth speaking to your SIPP provider to see what they say. I was able to transfer my pension for free, but I am unsure if that will be the case for your pension.

[TestMangler]

Simon,

I''ve got an old one (1979-1994, giving me 15/80 of final salary and lump sum of 3x annual pension). When i looked into transferring it into a SIPP it was quickly obvious that it wasn't worth doing as the cash transfer value wasn't even close to the potential requirement to get 'similar' benefits.

It all depends on what your CS pension was like (i.e. terms) but wasn'[t even close to being worth it for mine.

[BolshieBastard]

Looking at setting up a SIPP, and I assume if I want to get the most of it the more money I can put in there to start me off with the better, so was thinking as in a previous life I took the governments schilling it might be worth while transferring that in as it's frozen at the moment.

Does anyone have any experience of transferring a Civil Service Pension into a SIPP? I've emailed my Pension Administrator but that's gonna take 10 days for an answer, also emailed the broker I want to transfer to, and again waiting for their response, just wanted to throw it to the massed peers to see if anyone has done this before.

Simon,

I''ve got an old one (1979-1994, giving me 15/80 of final salary and lump sum of 3x annual pension). When i looked into transferring it into a SIPP it was quickly obvious that it wasn't worth doing as the cash transfer value wasn't even close to the potential requirement to get 'similar' benefits.

It all depends on what your CS pension was like (i.e. terms) but wasn'[t even close to being worth it for mine.

What TM said. I left the CS after 22 years of being in the Principle CS Pension Scheme. Even though I will not get a full CS pension, its inflation proofed, gives me a lump sum over £16k and a pension over £9k a year as of right now. If you were in the PCSPS, you'd be nuts to move out of it imvho.

I know they changed the pension provisions for the PCSPS around 2002ish as my wife had to decide whether which of 3 options they gave her regarding her civil service pension but even so, she'll still get a lump sum and weekly pension inflation proofed.

If you joined the CS after 2002ish then maybe migrating is worthy of consideration but I'd be very, very careful if I were you. I know people who transferred out of PCSPS and they have seriously regretted it, in some cases ending up with no occupational pension now.

[mudskipper]

Simon,

I''ve got an old one (1979-1994, giving me 15/80 of final salary and lump sum of 3x annual pension). When i looked into transferring it into a SIPP it was quickly obvious that it wasn't worth doing as the cash transfer value wasn't even close to the potential requirement to get 'similar' benefits.

It all depends on what your CS pension was like (i.e. terms) but wasn'[t even close to being worth it for mine.

WHS. If it's a final salary scheme, the advice is generally to leave where it is. There's a good reason why most companies have ditched final salary schemes!

[SimonMac]

I am thinking more one the lines that as I am only 30 now, and not going to see my CS pension until I am 65, if I transfer it, make it work and retire at 50 the extra 15 years will make it worth while.

[pmeswani]

I am thinking more one the lines that as I am only 30 now, and not going to see my CS pension until I am 65, if I transfer it, make it work and retire at 50 the extra 15 years will make it worth while.

It depends on how big your pension is and whether it is linked to your final salary. I am of the belief, rightly or wrongly, that it is better to have your pensions under one umbrella in order to minimise administrative costs. However, you may not be able to withdraw your CS pension, even if transferred to a SIPP, so it may be worth asking the question to the SIPP provider to see what you can and cannot do with the CS Protected Rights pension.

[SueEllen]

I am thinking more one the lines that as I am only 30 now, and not going to see my CS pension until I am 65, if I transfer it, make it work and retire at 50 the extra 15 years will make it worth while.

The general advice is not to transfer final salarly pensions especially if they are public sector ones as the UK taxpayer is unlikely to go bust.

The government is actually looking at introducing sweetners later on down the line to make the likes of you transfer out. The only reason they are doing this is because it will cost them much less. So obviously it's clear that you are better off keeping that small amount of money in the civil service pension you have.

BTW if you end up with a few kids you won't be retiring at 50. (And as a guy it can happen at any time until you keel over.) Though it doesn't mean you won't be working part-time on your plan B or C.

[pmeswani]

The general advice is not to transfer final salarly pensions especially if they are public sector ones as the UK taxpayer is unlikely to go bust.

The government is actually looking at introducing sweetners later on down the line to make the likes of you transfer out. The only reason they are doing this is because it will cost them much less. So obviously it's clear that you are better off keeping that small amount of money in the civil service pension you have.

BTW if you end up with a few kids you won't be retiring at 50. (And as a guy it can happen at any time until you keel over.) Though it doesn't mean you won't be working part-time on your plan B or C.

The Public Sector Pension Scheme as it stands may not go bust, but with the Government looking to fill in the black hole, I wonder how long it will take before they outsource it to a private sector pension provider?

Am not saying it is definitely going to happen, but it wouldn't surprise me if the Government weren't thinking about it.

[IR35 Avoider]

The Public Sector Pension Scheme as it stands may not go bust, but with the Government looking to fill in the black hole, I wonder how long it will take before they outsource it to a private sector pension provider?

A government pension is a promise by the government to you, a promise that will be met by the proceeds of taxation. There is no actual government pension fund to be transferred to a private provider.