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    • Acquinas
    • By Acquinas 12th Jul 17, 12:59 PM
    • 113Posts
    • 76Thanks
    Acquinas
    Transferring LGPS Benefits
    • #1
    • 12th Jul 17, 12:59 PM
    Transferring LGPS Benefits 12th Jul 17 at 12:59 PM
    One for the LGPS experts I think. Last year I joined the LGPS, and at the same time transferred in an AVC balance from my former employer. The value of the AVC pot was about £37k and that enabled me to buy about £3k of LGPS pension at normal pension age. I have been contributing as an LGPS member since I joined. I am now thinking of moving on again. Question: assuming I join another public service scheme such as the civil service, what is the balance of benefits/risk involved in transferring the whole of my LGPS fund into my new public service pension? I understand though that I could actually get the fund transferred into a DC fund offering flexible benefits. I suppose the total value of the fund would be about £40k. I'm nearly 55 by the way.


    The fund I would be looking to transfer into would probably be the civil service Alpha scheme, which in terms of accrual and NPA seems very similar to LGPS. It seems to me though that by separating the former LGPS fund into a more flexible vehicle I would have the option to access it earlier rather than hanging on until I was 66 in Alpha.


    Just to complicate matters slightly further I have also been building up an AVC fund with the Prudential AVC fund too. Not of massive value but I suppose I may as well play it into the mix.
Page 1
    • Silvertabby
    • By Silvertabby 12th Jul 17, 1:53 PM
    • 1,790 Posts
    • 2,199 Thanks
    Silvertabby
    • #2
    • 12th Jul 17, 1:53 PM
    • #2
    • 12th Jul 17, 1:53 PM
    As you joined the LGPS just last year, then all of your benefits will be CARE rather than final salary, and you won't have any early retirement (R85) protections. This does simplify things.

    Lets talk about a transfer to a DC scheme first. If you are serious about this, then you will need to specifically ask your LGPS administrators for a CETV (Cash Equivalent Transfer Value) for transfer purposes- and you will need to seek (and pay for) the services of an IFA who specialises in DB to DC transfers.

    A transfer to the Civil Service, however, is on 'club' terms - you won't be told the CETV, just how much the LGPS transfer would buy you in your Civil Service pension. If you do change jobs, then you have 12 months in which to transfer your benefits. Just asking for a quote won't commit you to transferring.

    Option 3, which may or may not have occurred to you, would be to leave your LGPS pension (and associated in-house AVC fund) where it is. Your LGPS benefits will increase each year in line with CPI inflation, and can be taken at any time from age 55 even if you are still working as a Civil Servant.

    Of course, the earlier you take your LGPS pension the greater the early retirement reduction - at least 50% if taken at 55.
    • xylophone
    • By xylophone 12th Jul 17, 3:22 PM
    • 23,416 Posts
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    xylophone
    • #3
    • 12th Jul 17, 3:22 PM
    • #3
    • 12th Jul 17, 3:22 PM
    And no transfer out of Civil Service DB Scheme to DC Scheme.
    • Acquinas
    • By Acquinas 13th Jul 17, 12:41 PM
    • 113 Posts
    • 76 Thanks
    Acquinas
    • #4
    • 13th Jul 17, 12:41 PM
    • #4
    • 13th Jul 17, 12:41 PM
    So it's a one-way street really, i.e. possible transfer out of LGPS into DC or Alpha, but once in Alpha I am essentially locked in unless I retire. In which case, that seems the least attractive of the 3 options. I noted the requirement to effect any transfer into Alpha within 12 months of joining of course, but would the same time-limit apply if I wanted to get a CETV and transfer into a DC scheme, or could I do this at more or less any point in the future?
    • Silvertabby
    • By Silvertabby 13th Jul 17, 12:53 PM
    • 1,790 Posts
    • 2,199 Thanks
    Silvertabby
    • #5
    • 13th Jul 17, 12:53 PM
    • #5
    • 13th Jul 17, 12:53 PM
    I noted the requirement to effect any transfer into Alpha within 12 months of joining of course, but would the same time-limit apply if I wanted to get a CETV and transfer into a DC scheme, or could I do this at more or less any point in the future?
    The only time limit on transferring out your LGPS pension is that it must be done more than 12 months before 65/NRA. AFAIK, you can transfer into a private pension at any time up to 74.
    • johndough
    • By johndough 13th Jul 17, 1:23 PM
    • 651 Posts
    • 250 Thanks
    johndough
    • #6
    • 13th Jul 17, 1:23 PM
    • #6
    • 13th Jul 17, 1:23 PM
    Hi

    Absolutely.

    "Option 3, which may or may not have occurred to you, would be to leave your LGPS pension (and associated in-house AVC fund) where it is. Your LGPS benefits will increase each year in line with CPI inflation, and can be taken at any time from age 55 even if you are still working as a Civil Servant."

    The benefits include ill-health and death, so potentially 2 death benefits, not to be sneezed at.
    • Acquinas
    • By Acquinas 13th Jul 17, 4:28 PM
    • 113 Posts
    • 76 Thanks
    Acquinas
    • #7
    • 13th Jul 17, 4:28 PM
    • #7
    • 13th Jul 17, 4:28 PM
    This is becoming a bit of a no-brainer then. Leave well alone, let it grow with inflation, call it into payment any time I like or transfer it by way of CETV into a DC fund at any point and enjoy total flexibility. Thanks all.
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