LGSS pension and lump sum

roytom

Hi All

I'm up for the compulsory payment of my pension from the Local Government Pension Scheme next year - I would prefer to delay it but that's supposedly not possible. It will pay a very small annual pension and a lump sum. I don't want either now but least of all a lump sum that, when invested, will earn a miserable rate of interest.

So I wanted part, or if possible all, of the lump sum converted to pension - I will need a regular pension income to live on at some stage but not yet as I'm working elsewhere (ie. not in local government).

They say the LGSS scheme I'm in won't allow the lump sum to be put back to pension. But I'm sure others have done this with a LGSS scheme recently.

Is there anything I can do to fight this. If I end up with the lump sum paid out what options do I have? Would I qualify to shove this into an annuity? I understand that annuities are also paying rubbish returns too.

Thanks
Roy

Drp8713

There is only a very small group of LGPS members who can have inverse commutation, it depends when you were a member and when you left the scheme.

If your scheme administrator says you are not elegible then you cant fight it as it is a statutory scheme and the regulations are written in law.


However if your scheme administrator is wrong thats different. Whos your administrator/authority? And when were you a member?

I can then see what i can find.

xylophone

http://timeline.lge.gov.uk/GAD/Inverse_Commutation_reg_58_October.pdf

http://www.local.gov.uk/c/document_library/get_file?uuid=55d210c7-5168-42a5-b3cf-64465eca01cc&groupId=10180 page 6.

At some stage will you have more than £20,000 per annum secure income (including State pension)? Might it be worth while using the lump sum until extinguished as an income replacement and using income to make contributions to a SIPP?

Or might you consider increasing pension contributions to your current scheme?

See an IFA? http://www.unbiased.co.uk/

greenglide

This happened to me as well. On reaching age 60 I had expected to be given the option of taking the pension and lump sum at age 60 or waiting until 65. However I had to take the pension at 60 at the lump sum as well although I could convert part of it into pension increments.

Since I hadnt expected this (and didnt want the income yet) I used the pension and the lump sum to make monthly payments into my employers AVC scheme which is a salary sacrifice scheme.

Better than nothing but I really hate the public sector mentalitywhich used to force you to retire at 60 and had (hugely generous) pensions schemes which were totally retirement at 60. Fine if you had spent your whole working life in public sector - doesnt work as well if you dip in and return to the private sector.

Having said that six years in local government got me £5,000 pa from age 60!

hyubh

greenglide wrote: »

On reaching age 60 I had expected to be given the option of taking the pension and lump sum at age 60 or waiting until 65. However I had to take the pension at 60

Because you joined before the 85 year rule was abolished for new starters and met it at 60? Or because you were made redundant? (Assuming you're talking about the LGPS - maybe you aren't.)

Since I hadnt expected this

Hmm, why not? Private sector DB schemes tend to be 60. (Of course, final salary schemes as a class are generous... but still.)

Better than nothing but I really hate the public sector mentalitywhich used to force you to retire at 60 and had (hugely generous) pensions schemes which were totally retirement at 60.

The LGPS has always been 65, though historically it could be from 60 if you had enough service.