Paying into a pension scheme should give you peace of mind and security in retirement – but it’s easy to fall foul of confusing pension rules if your plans change. Tommy Newell talks to Chris Cadman about how the union helped to get his retirement plans back on track.

 

Chris Cadman had worked in the civil service for over 30 years when he took voluntary exit from his full-time Grade 6 job in 2016. Throughout his career, Cadman had paid into the Classic final salary pension scheme. On leaving, he chose not to preserve his pension – currently worth roughly £29,000 a year with a lump sum of £87,000 – and to draw it once he reached the age of 60.

The following year, Cadman returned to work after accepting a short-term contract with the Home Office – at a lower grade – to provide seasonal cover.

Cadman opted to join the Alpha pension scheme, as it was the only option he was offered as a new starter. Conscious of the preserved benefits he had accrued throughout his career, he asked his new employer what he thought was a simple question: “Will the preserved benefits that I’ve built up at a much higher grade continue, or will they be affected by my new lower salary?”

Unfortunately, nobody at the Home Office could answer that question. Cadman then contacted MyCSP, but they answered a completely different question, telling him that the Home Office had put him in the wrong pension scheme: he shouldn’t be in Alpha, he should have gone back into Classic.

It was at this point that Cadman started to panic. The advice he had been given by MyCSP meant that his previously accrued pension could be slashed by over £25,000 a year.

“The Classic pension is based on the best of your last three years” Cadman explained “and if I’m still in Classic then the best of my last three years, if I do this seasonal work for the next two or three years, would give me a pension of a couple of thousand a year – if I’m lucky.”

This was the “nightmare scenario”, Cadman says, as it would have left him “absolutely skint” and thrown all his future plans out of the window. At this point he came to the FDA for help.

Cadman had been a member of the FDA while in full-time employment and became an associate member when he took his voluntary exit. The FDA quickly took this case directly to the Cabinet Office, hoping for a clear answer. Their initial response suggested that Cadman should be in the Premium scheme – not Classic or Alpha.

Despite Cadman’s situation becoming increasingly common for civil servants, there didn’t appear to be clear guidelines for what should happen in these circumstances. The FDA went back to the Cabinet Office to ask them to double-check the advice they had given, and provide Cadman with full written confirmation.

After a lot of to-ing and fro-ing, the Cabinet Office finally confirmed that, actually, Cadman should be in Nuvos – completing the full sweep of all four civil service pension schemes. The final confirmation secured by the FDA meant that Cadman’s preserved benefits from Classic were just that – preserved – and any new service would be under Nuvos and would not affect his entitlements under the Classic scheme.

After a number of “sleepless nights”, Cadman finally had it in black and white from the Cabinet Office and could confidently return to work knowing his retirement plans were safe.