Local Government Pension Scheme - Increase in ARC's from April 2013

CAE

woolly_wombat wrote: »

Could you please post a link Pixieboy.

I have been trawling the Local Government Employers website but can't find any details.

As I stated above, my LGPS administrator has not informed me of these increases.

Many thanks.
WW

Don't think the LGE website has been updated yet. From memory the GAD guidance was dated 5th March, and received by administrators a few days afterwards. I'm sure that administering authorities will be writing to affected members within the next few days, having had to identify those concerned and recalculated the monthly payments in line with the new GAD guidance.

Pixieboy

As CAE said, the revised factors are not available online yet as far as I am aware.
These things take time and I'm sure all administering authorities will be writing soon....

woolly_wombat

Still haven't heard a thing.

1st April 2013 is rapidly approaching.....

I find it quite astonishing that so little notice of this significant change has been given.

I guess it's a sign of the times.

woolly_wombat

Well, well we do live in 'interesting times'.

The Office for National Statistics has decided that the RPI is no longer an 'official statistic'!

http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/february-2013/stb---consumer-price-indices---february-2013.html
While ONS will continue to publish the RPI every month, its designation as a National Statistic has been cancelled

Here is what Ros Altmann has to say:
http://www.rosaltmann.com/pdf/RPI-ONS_says_no_longer_National_Statistics_18_Mar_2013.pdf

ONS decision to downgrade RPI was kept very quiet: Last week, the ONS quietly
downgraded the Retail Prices Index, RPI - our traditional long-standing measure of
inflation, on which many incomes and prices depend. A statement, hardly noticed by
anyone, said it had decided the RPI would no longer be an official statistic. There
was no widely disseminated press release or publicity.

and

Will pension trustees try to reduce uprating by abandoning RPI? If it is no
longer considered to be a 'National Statistic', will pension trustees decide to stop
using it for pensioner increases in future? This would need to be challenged in the
Courts, but as it could represent a significant cost saving to many schemes, some
trustees may decide to test this even when the Trust Deed specifies pension rises
must be based on RPI.

WW

darren72

I've now had confirmation that if I start a new contract (to build up £3000 - ie, to make up the total extra pension to £5000 extra annual pension [As I've already built up approx. £2000 of the £5000), I will need to contribute approx. £340 per month over the next 6 years. - This will be linked to CPI.

If I continue with my existing contract until it ends (approx. 6 months time) from 1st April 13 I will need to pay £581.60 per month. This is linked to RPI.

I understand that the link to RPI is better, but is it worth the difference between £340 and £581 per month ??

Also, does the linkage only take effect when the pension starts to pay (ie, at pension age) ? - As I am 'buying' an additional '£5000' annual pension. I don't retire for approx 25 years.

Any thoughts appreciated.

Thanks in advance

browniej

No the linkage starts from when you make the first contribution.

darren72

browniej wrote: »

No the linkage starts from when you make the first contribution.

How does that work then ? - If I am buying an additional £5,000 period, does that amount increase each year in line with CPI/RPI ??

Thanks

browniej

darren72 wrote: »

How does that work then ? - If I am buying an additional £5,000 period, does that amount increase each year in line with CPI/RPI ??

Thanks

My brother took out ARCS recently. He was advised that they increased in line with inflation so that the £5000 you buy will be more when you actually take the pension.

jem16

darren72 wrote: »

How does that work then ? - If I am buying an additional £5,000 period, does that amount increase each year in line with CPI/RPI ??

Thanks

Might be worth checking this thread out, in particular this post.

http://forums.moneysavingexpert.com/showpost.php?p=60010007&postcount=44

darren72

jem16 wrote: »

Might be worth checking this thread out, in particular this post.

http://forums.moneysavingexpert.com/showpost.php?p=60010007&postcount=44

Thank you very much - That thread and that post are certainly very useful.

My decision now is whether to continue with my existing contract (increasing with RPI) but at a far higher monthly rate, or stopping and starting a new contract which increases with CPI - With the figures shown in my previous post.

Am I correct in saying that there is no easy way of working this out ??

Thanks