Should we opt back into our LGPS???

ds1980

OK please don't shoot me down. Me and our lass both work in education and opted out of the local government pension schemes when we joined. We took this decision as the extra cash was needed and welcomed at the time. We are now at a stage (both 28) where i feel we should start back into this scheme and everyone tells me i'm stupid for not being in it.

Have i left it too late?? Never really took the time to understand it all. Are all LGPS the same? I think we contribute 6% and then employer the rest. Can someone please give me the benefits of joining and the perhaps the any reason why not?

We recently got married does this have further benefits. Also what happens if we become ill or something sinister happens? I know someone that lost all of hers as she sadly passed away? Can this be safeguarded?

Our lass does have a stakeholder pension (L&G I think) from before....can this go into the LGPS or should it be left alone?

Sorry for all the questions

thanks,

ds1980

jem16

ds1980 wrote: »

Have i left it too late??

I think you can join any time.

Never really took the time to understand it all. Are all LGPS the same? I think we contribute 6% and then employer the rest.

Yes. Doesn't really matter what the employer pays. Your 6% will actually be less after tax relief - actually works out at 4.8%.

Can someone please give me the benefits of joining

A final salary pension with no stockmarket risk, death benefits and family benefits.

and the perhaps the any reason why not?

None whatsoever. You would be mad not to join.

We recently got married does this have further benefits. Also what happens if we become ill or something sinister happens? I know someone that lost all of hers as she sadly passed away? Can this be safeguarded?

Your spouse will receive a pension plus a lump sum if you die in service. Once your pension starts and you then die your spouse will get a half pension.

Our lass does have a stakeholder pension (L&G I think) from before....can this go into the LGPS or should it be left alone?

Would depend on transfer values.

ds1980

think that about sums it up! Thanks for a swift response.

I mean about being 28 and joining is this too late...i know i can opt back in any time.

seven-day-weekend

Joining at 28 is considerably better than not joining at all!

I didn't join the LGPS until I was 44, (because I wasn't eligible) and left it at 54 when I moved to Spain after hubby took early retirement, but there is still a small deferred pension waiting for me with a five grand lump sum for when I am 65. It is index-linked and goes up every year even while it is deferred.

You can't lose.

treliac

I've heard mutterings that public sector pension benefits might be cut, especially if the Tories win the next election. Pension costs are said to be unsustainable.

Is it something they could do in relation to benefits already accrued?

ds1980

I suppose the other reason why i have doubts is because of the point made above. As we have an aging population i often wonder who's going to pay for me! Surely the "hole" can only get bigger?

Not a lot we can do about that one though is there!

Cook_County

treliac wrote: »

I've heard mutterings that public sector pension benefits might be cut, especially if the Tories win the next election. Pension costs are said to be unsustainable.

Is it something they could do in relation to benefits already accrued?

Depends if it is funded or unfunded. Which is it?

In truth no-one else apart from MPs gets gold-plated pensions these days, many of us would vote for lower council tax & thus by implication for a more modern LGPS.

EdInvestor

LGPS is funded.But then so is Royal Mail - but not for much longer.Whether funded or unfunded shouldn't affect benefits or their security in a public sector scheme however.

Andy_L

treliac wrote: »

I've heard mutterings that public sector pension benefits might be cut, especially if the Tories win the next election. Pension costs are said to be unsustainable.

Is it something they could do in relation to benefits already accrued?

Legally no, accrued rights are protected. However Parliament could "change the law to let them break the law" IYSWIM.
However it's very much a "year-zero" option as it destroys their financial credibility & thus, eg, they can't raise money buy selling bonds or NS&I certificates

m1ntie

ds1980 wrote: »

think that about sums it up! Thanks for a swift response.

I mean about being 28 and joining is this too late...i know i can opt back in any time.

The LGPS is final salary - based on 1 sixtieth of your salary for each year of pensionable sevice. If you stay in LG and retire at 65 you would have 37 years pensionable service.

Lets say you were retiring tomorrow on a salary of £25K, your pension would be worked out like this - 25K divided by 60 = £416.67 X 37 = annual pension £15,416. If you wanted to take a tax free lump sum you would of course have to commute part of your pension.

The pension is of course fully index linked and there are generous death benefits for spouses and dependants.

Join tomorrow before they decide to close it to new entrants which they surely will.