Combining LGPS

musclebeach

Hi,

I opted out of the LGPS and then opted back in a month later. Now Ive been sent a letter asking if i would like to merge the two LGPS schemes together.

For some reason under "Current Salary Value" Its showing a higher amount than under my current subscription, not sure why this is as ive gone up an increment on my pay scale so im earning more.

What would be the advantages/disadvantages of me merging these two together?

Thanks.

JoeCrystal

What...

As far I am aware, your old scheme is now deferred until you retire since you opt out. Now you opt back in, you start afresh (back at first year 1/60 of your salary). (May be totally wrong though but that is my understanding). It could be that your old scheme can be used to buy years in your new scheme, but then that can also be wrong as well.

Maybe that why it is different. As for advantages and disadvantage, well it may be that you could draw on your deferred scheme at 55 which are index-linked every year at your old salary. Basically, no idea!

As a disclaimer, I have no idea concerning the LGPS! Maybe you should speak to pension folks at your work about it or read your scheme boooklet maybe. And if you join before 2008, then your years before that is also calculated differently.

Cheers

Joe

Pixieboy

How long ago was the opt out/opt in?
It may be that if this was before April 2011, the cost of living increase that would have applied to your deferred benefits has been used to uplift the value of the Final Pay used to calculate those benefits in order to give you a straightforward method of comparing the relative values of the benefits if you keep them separate or choose to combine them.
So, for example if you opted from 1/4/2010 and the Final Pay used to calculate your deferred benefit was £10,000, the increase in April 2011 would have been 3.1% making it worth the equivalent of £10,301. If your increment was worth less than 3.1%, that would explain the apparent discrepancy.
Alternatively they could be taking into account the pensions increase due in April 2012, which is 5.2%...
The best way to find out for sure is to contact the fund administrator that has written to you.