Restrictions on Early Access to LGPS?

Valleylost · 16 September 2017 at 1:06PM

I contributed to the Staffordshire LGPS for many years but left in 2011. I'm now 56 and contacted the scheme about withdrawing a lump sum but they told me that because I left before the changes in legislation in 2014 I'm not able to claim before I'm 60 because it's a defined benefit scheme. They suggested that, with independent financial advice, I could transfer to a defined contribution scheme and would then be able to access it. Can anyone comment on this restriction of waiting until I'm 60? Or this suggestion of transferring in order to get round it?

Silvertabby · 16 September 2017 at 1:57PM

This is correct. The only way you can access these benefits before 60 would be on the grounds of ill health or for compassionate reasons. In either case, you would need to apply to your ex-employer (not the pensions department) as your ex-employer would have to investigate/approve your claim.

Yes, in theory, you could transfer your benefits to a DC scheme and access them now - but think long and hard before you do that.

Don't be misled by posts on these boards saying that the transfer value of their (private sector) DB pensions is up to 40 times their annual pension, as different factors apply to the LGPS. ie, transfer factors are set by GAD and are nowhere near as generous as the current Gilt linked private scheme transfer factors.

By all means ask for a current transfer value from your LGPS - but be sure to ask for a pension estimate at 60 as well. Then come back and post both lots of figures and we'll explain them to you. Also ask for confirmation of your retirement date - you will have some R85 protections, meaning that you may be able to take your LGPS benefits unreduced from 60/early 60s.

Valleylost · 16 September 2017 at 2:14PM

Thanks for your very fast reply! I'm trying to raise cash to make adaptations to my house following a stroke. I see it as an investment in the property and therefore a sensible use of my pension. I'll contact the LGPS for values as you suggest and then post them for an explanation. I appreciate your offer of further help/explanation.

Silvertabby · 16 September 2017 at 2:29PM

Sorry to hear that you have had a stroke. Does that mean that you can no longer work? If so, then it may be worth asking if you can access your pension now on ill health grounds.

The terms for bringing a deferred pension into payment on the grounds of ill health aren't as generous as for anyone retiring from current service, as there is no service enhancement. However, if approved, then your deferred pension would be brought into payment without any reductions for early payment.

Hope this helps.

Restrictions on Early Access to LGPS?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free