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  • FIRST POST
    • p.pragnell
    • By p.pragnell 23rd Jul 17, 9:31 AM
    • 4Posts
    • 1Thanks
    p.pragnell
    Local Government Pension scheme
    • #1
    • 23rd Jul 17, 9:31 AM
    Local Government Pension scheme 23rd Jul 17 at 9:31 AM
    Hi

    I've been a member of the LGPS for about 20 years and have worked for a few LG employers. My latest employer (of the last 3 years) are the first one to ask me if I want to combine my benefits into one fund (i thought this happened automatically anyway?). I plan to end my employment in LG in the next few months and have been trying to get some advice about whether its best to leave my LGPS benefits in two separate funds (one with 17 years and the other 3 years). I'm about 20 years away from retirement age. The advice I've received from my pension administrator have not been clear. Can anyone help me choose the best course ? Combine or leave separate?Or does it not make any difference ?

    Thanks - phil
Page 1
    • Neasy
    • By Neasy 24th Jul 17, 10:48 AM
    • 64 Posts
    • 73 Thanks
    Neasy
    • #2
    • 24th Jul 17, 10:48 AM
    • #2
    • 24th Jul 17, 10:48 AM
    Hi there,

    (You may be better off reposting this to the main pensions board as this sub-board is not visited as often.)

    In order to decide whether to combine pension schemes or not you need to clarify how many years you have in which schemes, and what the details of each scheme are - you need to know what the retirement ages are for each scheme, what deferred benefits you have in each scheme etc. One major factor is that the Local Government Pension Scheme changed in 2014 from a Final Salary scheme to a CARE (career average) scheme with a scheme pension age tied to the state pension age rather than being 65 as in the old scheme. In my LGPS scheme (and I think in every one) I have to take my post-2014 and pre-2014 benefits at the same time, so if I take my benefits at 65, post-2014 scheme pension will be actuarially reduced or alternatively if I take the benefits at my state retirement age of 67, the pre-2014 benefits will be actuarially increased. One factor against combining all your schemes is therefore that you could take some of your pensions earlier than others without actuarial reduction - you need to work out what's best for you.

    Another factor is how much your salary has changed in the interim. If your current salary has increased significantly compared to the salary in one or more of your old schemes, it may be that it's worth combining the employments anyway, as this might increase your pension significantly.

    There are likely to be many more factors to consider; you need to supply more information to get the best guidance - for example, do you want to retire early? Also, do consider re-posting on the main board; there are many people there who know a lot more than me and will advise you better.
    • Silvertabby
    • By Silvertabby 25th Jul 17, 1:42 PM
    • 1,518 Posts
    • 1,812 Thanks
    Silvertabby
    • #3
    • 25th Jul 17, 1:42 PM
    • #3
    • 25th Jul 17, 1:42 PM
    Transfers from one LGPS to another have never been done automatically, as it wouldn't always be in your best interests. ie, you take a drop in pay, which would mean that your transferred benefits would also be calculated on your new, lower, pensionable pay rather than being preserved/protected at the higher rate.

    It's complex, and your current LGPS provider can't advise you on what to do, as they are administrators and not legally able to give financial advice.

    If you post:

    Date of birth

    To/from dates of all periods of LGPS service, including final pensionable pay

    I'll have a look for you - but please note I'll only be able to explain, not advise.
    • p.pragnell
    • By p.pragnell 8th Aug 17, 7:34 PM
    • 4 Posts
    • 1 Thanks
    p.pragnell
    • #4
    • 8th Aug 17, 7:34 PM
    thanks
    • #4
    • 8th Aug 17, 7:34 PM
    Hi - many thanks for your reply
    i joined the scheme in February 1996. I worked for various local government employers, joining my current LG employer in March 2014. My pay when I leave later this year will be circa £55k.

    My date of birth is 22.5.71

    many thanks.
    • Silvertabby
    • By Silvertabby 12th Aug 17, 2:21 PM
    • 1,518 Posts
    • 1,812 Thanks
    Silvertabby
    • #5
    • 12th Aug 17, 2:21 PM
    • #5
    • 12th Aug 17, 2:21 PM
    When did you leave your previous job, and what was your salary then?

    Sorry for the delay in replying - but I don't often wander onto this part of the boards!
    • p.pragnell
    • By p.pragnell 16th Aug 17, 7:40 PM
    • 4 Posts
    • 1 Thanks
    p.pragnell
    • #6
    • 16th Aug 17, 7:40 PM
    • #6
    • 16th Aug 17, 7:40 PM
    Hi
    I left my previous job in March 2014 and at that time the salary was £49,500

    many thanks
    phil
    • Silvertabby
    • By Silvertabby 17th Aug 17, 2:02 PM
    • 1,518 Posts
    • 1,812 Thanks
    Silvertabby
    • #7
    • 17th Aug 17, 2:02 PM
    • #7
    • 17th Aug 17, 2:02 PM
    Hi

    Then, on the face of it, it looks beneficial to combine.

    At the moment, your benefits up to March 2014 will have been preserved on your leaving salary of £49500. By combining, your final salary benefits from 1996 to 2014 will be calculated using your final leaving salary of £55K.

    You will have minimal R85 protections (on your pre 2008 service only) which won't be lost by transferring. You would also be able to take all of your benefits at 55 if combined, but you would only be able to take your pre March 2014 benefits from 60 if you keep your records separate.

    As you will be under 55 when you leave, your benefits (combined or not) will be preserved in the scheme and will increase each year in line with the cost of living (CPI).

    As the LGPS is a funded scheme, you would also have the option of transferring your benefits to a new employer's/private scheme - but think long and hard before giving up the (pricless !) benefit of a public sector defined benefit scheme that many people can only dream about.
    • p.pragnell
    • By p.pragnell 28th Aug 17, 7:33 PM
    • 4 Posts
    • 1 Thanks
    p.pragnell
    • #8
    • 28th Aug 17, 7:33 PM
    • #8
    • 28th Aug 17, 7:33 PM
    Many thanks for the advice on this - very helpful and has decided my course of action.

    rgs
    phil
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