Local Government Pension Scheme

meerkat2007

With apologies for the long post ...

For a few years back in the 90s, I worked in local government and paid into the superannuation scheme for some of those years. When I left, I left the pension sitting in the scheme. I also have little bits of pension provision in three other minuscule pots.

However, I am now with an employer with a reasonably decent pension scheme, which I have been paying into since I started my employment with them in April this year. All things being equal, I intend to stay with this employer until I retire in 2028, when I will be 66. I am now 47.

Since the three small pension pots are so small as to be negligible, I am going to transfer them in to my employer's scheme - for example, one of the pots would pay me around £10 per month, according to the latest information pack from the provider. If anything, transferring the pots in is more of an admin exercise to cut down on having to deal with multiple providers when I'm older.

However, the superannuation scheme is a different matter, and my gut feeling is to leave that where it is. The last statement I have from them, dated 2008, shows a Retirement Grant of £4,323.28 (same as the Death Grant), with a pension of £1,441.14 pa. My pensionable pay at leaving in 1997 was £16,450.41. Yes, I know it's not much, but apart from the current pension that I'm hoping to build up over the next 19 years, it's the best pot I have.

Now, the main question I have is this: the statement shows that benefits are payable from my 60th birthday - a full 6 years before I will be retiring and taking a state pension, so given that I won't actually be retiring when I'm 60, will the superannuation scheme start paying me when I hit 60, even though I'll still be working, or will it be left there until I do finish work, or will I be given a choice - to take it at 60 or leave it until I do retire?

I suspect that the answer will be that I should contact the scheme and/or speak to a pensions expert, but if anyone does know anything useful that might apply in this situation, I'd be very grateful.

Thanks in advance. As you'll probably gather, I know nothing about pensions, but with the age of 50 coming at me, it's rather focused my attention on the issue!

Ian_W

I'm no expert on the LGPS scheme but their website - HERE - doesn't indicate that you can defer the pension beyond age 60. However, as you say, you should check it out with them.

I don't know if you have a spouse, partner or dependents but there is a death benefit payable if anything should happen to you before retirement and the site has a link to a nomination form if you were not aware.

Unless your new scheme is final salary or public sector you're probably best keeping the LGPS one separate as you intend. A money purchase scheme MIGHT see you better off at retirement but it depends on investment returns whereas your LGPS one is linked to PRI until (and even after) retirement.

meerkat2007

Ian_W wrote: »

I'm no expert on the LGPS scheme but their website - HERE - doesn't indicate that you can defer the pension beyond age 60. However, as you say, you should check it out with them.

I don't know if you have a spouse, partner or dependents but there is a death benefit payable if anything should happen to you before retirement and the site has a link to a nomination form if you were not aware.

Unless your new scheme is final salary or public sector you're probably best keeping the LGPS one separate as you intend. A money purchase scheme MIGHT see you better off at retirement but it depends on investment returns whereas your LGPS one is linked to PRI until (and even after) retirement.

Thanks, Ian - the site you provided looks very interesting, and at first reading, it looks like my gut reaction is probably right and I will be leaving it untouched. And thanks for the reminder about the death benefit - I can't even remember if I filled in a nomination form at the time (I left 12 years ago, so I would have filled in the nomination form well before then), so I'll get that sorted out as well. No spouse/partner and no kids, but my mother has been diagnosed with the early stages of Alzheimer's, so if anything did happen to me before I retire and she was still with me, I would want the lump sum to go to her, or be available for any care she might need.

My new pension scheme is partial final salary, as far as I can recall. I know I should be more aware of the details, but since I have next to no pension provision, I figured 19 years' worth of contributions to the scheme I'm now in was better than nothing.

smerch1468

I cannot see the rationale behind defering a final salary pension benefit. Any enhancement in final pension will be more than offset by the pension you forgo by retiring late.

You can carry on working and draw a pension these days.

Liquorice_Twirls

It will be payable at 60. Like smerch1468 says why delay in receiving it? You get no more for waiting.

Make sure that you have your nomination up to date as it will mean that if you died the lump sum could be paid out very quickly with much less paperwork necessary.

meerkat2007

Thanks to Liquorice Twirls (love the name!) and smerch1468 - I have every intention of collecting my LGPS lump sum and pension at the age of 60. As you say, why wait? That pension pot will be staying put.

I have also sent off the nomination form this morning, so even if I did fill one in at the time, at least they will have an up-to-date nomination in the next day or two.

Thanks again!

DiggerUK

Meerkat2007,
I can only echo that you leave your LGPS as it is, and support the arguments given you.
I will add one more reason, a lot can happen with your current employer in the next 19 years.
You may go back into LG employment. As the rules stand you are an existing member and would more than likely have the choice to opt back in to the best pension scheme going. Leave that option open.

Best of fortune.

meerkat2007

Thanks, DiggerUK - I don't need any more convincing, the LGPS pension is firmly staying where it is. I've filled in the form to transfer the other 3 little pots to the new employer's pension scheme.

Had I known then what I know now, when I left school I would have either gone into local government and stayed there, or joined my present employer and stayed here - there are a lot of people around me who have upwards of 20 or even 30 years' employment here.

Hindsight's a wonderful thing!