If you leave voluntarily or opt out of classic plus before you retire, you have a choice of options depending on your circumstances.
Leaving or opting out – what happens to my pension benefits?
If you leave voluntarily or opt out of classic plus before you retire, you have a choice of options. You can:
transfer your classic plus pension rights to another pension scheme;
preserve the benefits you have built up within
classic plus for payment when you retire.
Transferring out your classic plus pension rights
You can ask for a transfer payment to be made to another defined benefit scheme. The transfer payment will be equal to the cash value of your benefits.
You will need to consider the following issues before making a transfer.
There may be a time limit in the receiving scheme’s rules (for example, if it is a member of the Public Sector Transfer Club, the time limit is 12 months from the date the member first became eligible to join the new employer’s pension scheme).
The transfer value may not necessarily buy the same length of service or amount of pension in the new scheme – you should receive an estimate from the new scheme of how much your classic plus benefits will buy before you make your decision.
The range and type of benefits offered may be different to those in classic plus. You should consider which is more appropriate for your needs.
You must apply for the transfer before we start the administrative process of paying your pension benefits.
Preserved benefits within classic plus
If you do not transfer your benefits out of classic plus your benefits will normally be paid to you at the scheme pension age (60). You may be able to take your preserved benefits before scheme pension age if you are age 55 or over (or 50 or over if you joined before 6 April 2006) and you apply for immediate payment of your preserved benefits on an actuarially-reduced basis. Your pension benefits will be reduced in line with guidelines set by the scheme actuary to reflect the longer period of payment.
Actuarially-reduced early retirement
Most classic plus members who are aged 50 or over and were in post before 6 April 2006, can choose to retire and take their pension early on an actuarially-reduced basis. The only restrictions are that:
you must have two years’ qualifying service or have transferred pension rights into classic plus from a personal pension; and
you cannot have an actuarially-reduced pension if it would be less than the amount needed to pay your guaranteed minimum pension at State pension age.
We work out your pension and lump sum in the same way as if you were to retire on or after scheme pension age but reduce payments, permanently, in line with guidelines set by the scheme actuary to reflect the longer period of payment.
The CSP arrangements provide compensation under the Civil Service Compensation Scheme for civil servants who leave early because of:
Ill health retirement
If you have to leave the Civil Service before you are 60, and our medical advisor agrees that you cannot do your job because your health has broken down permanently, we may pay you your pension when you leave. In these circumstances, we will pay your pension without making any reduction because of early payment and, in certain circumstances, you may be eligible for enhanced reckonable service.
If our medical advisor believes that your ill health is so severe that you are unlikely to work again, we may also give you all the extra years of service you would have expected to have had if you had worked to 60.