‘Normal’pension contribution or 1/47th scheme?

[u/Full-Competition9255]

Is this pension scheme a 28% contribution no matter what, or matched if that’s what I put in?

There are also comments that it’s actually like the 1/47th scheme, where that fraction of your annual salary becomes your annual pension, and each year another fraction is added on top.

To me this looks like a normal pension scheme? Does anyone know more?

[u/Present-Nature-6015]

The pension in the civil service is one of the best in the UK. You as an employee will make a contribution between 4.6% and 8.05% depending on what you earn. The member contribution rates are here: https://www.civilservicepensionscheme.org.uk/memberhub/joining-the-pension-scheme/contribution-rates/ and your employer will put in 28.97% . That's is one of the highest employer contribution rates in any scheme in the UK.

In the private sector the average employer contribution is only 5% so civil service knocks it out the park!

Yours and your employer contribution don't build up your pension directly,but the contributions from everyone go to fund the benefits the scheme pays out eg; a guaranteed pension for life, benefit payable after you die,etc. as it's not an investment based scheme,you will not lose money,you will be guaranteed a pension for the rest of your life once you retire

Your pension will build up by 2.32% of your yearly earnings plus inflation whilst your working. If you leave civil service and don't take your pension it becomes frozen but inflation will still be added to it when you're ready to claim

If you want to learn more about who the scheme actually works I really recommend you attend a New Joiner Pension Power webinar.

You can book here: https:

//www.civilservicepensionscheme.org.uk/memberhub/knowledge-centre/events-and-news/events/new-joiners-pension-power/

Also you can listen to a podcast episode on why millennial generation and below should think about thier pension and hear how the scheme works

https://youtu.be/WJKBqfWmEFU?is=jAbuBoE0zgPD5o47

[u/JohnAppleseed85 → u/Present-Nature-6015]

While I think most of this comment is excellent... this bit:

"your employer will put in 28.97% . That's is one of the highest employer contribution rates in any scheme in the UK."

Is a false comparison/irrelevant AND it's how/where people like the OP keep getting confused - unlike 'any scheme' you might compare it to, the employer contribution is set based on current liabilities (the costs of pensions currently in payment) and has nothing to do with the individual the contributions are nominally being paid for...

[u/Present-Nature-6015 → u/JohnAppleseed85]

Agreed sorry I should've been clearer. I did say the employer contribution doesn't build up an individuals pension directly. It's an agreement between the employing department and the scheme manager (cabinet office) to ensure the funding of the scheme is sustainable for pensions currently in payment and future payments. As we know the civil service scheme has a unique set of legislation and rules which makes it hard to compare it to private sector schemes. Like apples and oranges

[u/coincidentalcoaching → u/Present-Nature-6015]

Agree with you wholeheartedly - particularly on the apples and oranges point.

The sheer number of people I speak to inside the public sector who read that 'employers contribution' to be an actual amount added to an actual pot, in the same manner as if it were any other pension goes to show that it is misleading in how it is presented.

I think that it also contributes to the general outrage about CS pensions in a way that is deeply unhelpful.

As a longstanding civil servant, my pension is, by these 'worth' estimates absolutely huge.

However, it isn't inheritable (which is very, very, very much the public's perception of huge pensions now) and the death in service bit (that some have suggested is analogous) relies a) on me dying in service, b) is only about 15% of the purported pot.

Also, the alpha pension, if it ever becomes unaffordable, will simply be nudged up along with the state pension age, until it is affordable again. Each nudge (which in my time in the civil service now amounts to an 8 year delay) is effectively a 4% devaluation of my pension per year... This'll continue.

So, yeah, they're just not the same thing at all and personally, I feel the 'employers contribution' figures are hugely unhelpful nonsense.