West Yorkshire Pension Fund

Popz

Hi Guys

I've worked in an organisation signed up to the West Yorkshire Pnesion Fund. Its a final salary pension scheme which i understand is a rareity these days. I opted out of the scheme when i commenced work a few due to money being tight and wanting to get amrried, buy a house etc etc. Now that im settled, i need to start thinking about 30/35 years down the line.

I was wondering if people could advice on this sceme and if it was actually worth joining. My knowledge of these things is zilch. I've checked their website and made some sense of it but im still confused.

For info i'm 31 if that matters.

Thank you

Linton

Looking at the details of the 2014 scheme:

You pay between 5.5-12.5 % of gross salary (20%-40% less effect on net salary) depending on salary level and get benefits that would cost 25% of your salary in the private sector. That doesnt include the cost of the death in service and ill-health provisions. It's a no brainer, you were mad not to have joined when you started work.

25% figure comes from the H-L pension calculator assuming a salary that only rises with inflation with the employee working from age 30-65.

atush

Join today, yes it is worth it. so sorry you didn't earlier. that was unwise.

hyubh

I've worked in an organisation signed up to the West Yorkshire Pnesion Fund. Its a final salary pension scheme which i understand is a rareity these days.

The West Yorkshire Pension Fund is part of the LGPS (Local Government Pension Scheme). The rules of the scheme are set by central government, but administratively and financially it's divided into several funds, each of which will then have a number of participating employers.

While the LGPS is final salary scheme at present, it will be changing to a career average one in 2014. For lower and middling earners this won't make much of a difference, and even for higher earners is still better than the alternative, i.e. dropping the 'defined benefit' basis entirely.

I was wondering if people could advice on this sceme and if it was actually worth joining.

Most certainly.

rabbitmumu

doesn't matter whether it's career averaged or final salary scheme, you got a LGPS scheme, and you are young, of course you join!

Popz

Thanks guys...appreciate everyone's input.
Is there any way of making additional payments retrospectively? Or am i having to start afresh?

Also can someone give me some figures please? If i was to contribute for 34 years and retire on a salary of say 45k. What could i expect?

I wont tell you how many years I've missed out on - feel bad as it is

mark55man

Popz I am pretty sure you can buy additional years, or at least join their in house AVC which (unusually for government pensions) you can use to fund your tax free sum and will mean you get more pension income (£1 for every £12 saved which is equiv to £8300 for 100K much better than annuity rates at the moment)

If you search for LGPS ARC AVC on google you will see a number of articles that might help. you also usually have some options in the dirst year of your pension that will lapse so you need to speak to your pension rep to get the facts

It can be hard to tell which of your many options is the best but buying additional years in a FS or Career average scheme seems a great start

xylophone

I opted out of the scheme when i commenced work a few due to money being tight and wanting to get amrried,

:eek: Aargh!

I see you've realised your error - think of the death in service, widow's pension, provision for dependants, tax saving... in your position I'd be beating a path to the door!

Read the pension booklet for your firm with care http://www.lgps.org.uk/lge/core/page.do?pageId=100340 and find out about whether you can make additional contributions.

hyubh

Popz wrote: »

Is there any way of making additional payments retrospectively?

No. You can take out an AVC or ARC contract going forward however, though an added years contract won't be possible. In the LGPS an AVC is a separate investment with an insurer, the outcome of which can be put together with your main benefits to get a lump sum without reducing (or not reducing as much) the LGPS pension; in contrast, ARCs involve making a series of fixed regular payments to the main pension fund in order to purchase a fixed amount of extra pension. Both sorts of additional contributions are deducted through payroll, and get you further tax relief by making them.

Or am i having to start afresh?

Yes, unless you have an old pension to transfer in.

Also can someone give me some figures please? If i was to contribute for 34 years and retire on a salary of say 45k. What could i expect?

Under the current rules, an annual pension that is 45K / 60 x 34 = £25,500, assuming full time working thoughout. A tax free lump sum could then be bought at a rate of £12 of lump sum for every £1 of pension you give up, up to a maximum of 25% of your overall benefits. E.g., you might reduce the pension by £500 to take a lump sum of £6,000.

Popz

Thank you to everyone for their input.

Does anyone know if there is any tax and NI relief for those that sign up?

What would the breakdown of take home pay be for someone on say £26k a year (including student loan repayments).

Thanks

hyubh

Popz wrote: »

Does anyone know if there is any tax and NI relief for those that sign up?

Tax will be paid net of pension contributions (both basic, and if applicable, AVCs etc.), and currently your NICs will be reduced too because the LGPS is contracted out of the State Second Pension. As has been in the news recently however, contracting out will soon be abolished for defined benefit schemes (it had already been abolished for other sorts WEF April 2012).