Armed Forces Pension into LGPS?

Pension_Panic

Hi folks,
I've just started a new job and have transferred 3 pensions into LGPS. This transfer has earned me circa 14 years...

The bit I'm losing sleep over is the fact that I've transfered my RAF pension over!

The RAF pension would of paid £2,835 Pa plus 8k grant at 60. The LGPS have offered £6532.90 Pa but does not state what age (65 I'm guessing?)
This is the equivilant to 10 years and 73 days in LGPS.

This bit you'll love! I've signed and sent the transfer..........

Any thoughts would be greatly recieved..

uknick

If you've already transferred it not sure you would want our thoughts

Pension_Panic

No I really do! I've managed to hold the paperwork...You tease!

atush

You're the tease for not saying.

They are both good pensions, you need to work out the actual RA of the pension you've joined as you dont' know, and to work out when you want to retire. If it is at 60, you may want to retain the army pension.

Drp8713

You can still take the lgps pension at 60, it will just be reduced by 25% for early payment. There is also no automatic lump sum.

These facts are both priced in thus the service it bought you is higher.

It is usually much of a muchness with club transfers

Pension_Panic

Thanks all for your posts....
I guess the LGPS is mathmatically better. If I took it at 60 then I would lose 25% = £1633 less, (not taking the lump sum into consideration) which is a couple of K better.

Cant wait till bed time.
And yes I was teasing......The paperwork has indeed gone!:beer:

uknick

Pension_Panic wrote: »

Thanks all for your posts....
I guess the LGPS is mathmatically better. If I took it at 60 then I would lose 25% = £1633 less, (not taking the lump sum into consideration) which is a couple of K better.

Cant wait till bed time.
And yes I was teasing......The paperwork has indeed gone!:beer:

I know that, you said so in your original post.

But as you ask, I would have kept my military pension as that pays out at an earlier age, and in the long run you will probably get more money in total.

But, that is a very simplistic view. When I took an exit package from the civil service I thought long and hard about whether to take early retirement or the redundancy package.

In the end I took the pension as I got the guaranteed income earlier. But the calculations involved cash flows over many years. But, there again I am an accountant by trade so I should have been able to do the calculations

Pension_Panic

Thanks Nick,
I've had a reprieve as the RAF have asked for proof of address...
I've got untill June to move it so I think I'll wait untill the new rules come out for LGPS in April.

As you say, at least I know I can get the dough at 60 rather than 65, 67, or whatever it will be in the future.....

Mind you, who says that wont change!?

greenglide

Just to complicate things further the preserved pension in the MOD scheme will, presumably, be indexed to inflation (CPI or RPI) while the LGPS one will increase according to the salary you are paid.

If wages do not keep up with inflation then the preserved pension can look very good.

I left local government in 1996 and the preserved pension had grown enormously by the time I reached 60 in 2011 - significantly more than my pension had grown in the scheme I am currently in. Unfortunately the LGPS wouldn't let me delay taking the pension (they do now, depending on age and date of leaving the scheme).

atush

I would consider keeping the army pension. No1 it will let you retire earlier if you decide to (along with S&S isas and savings) so you don't have to take your LGPS early/reduced.


No2, the income you receive from it (if you are still working for a few years til say 62) could be put into the LGPS AVCs which can be used as a LS.

hyubh

Pension_Panic wrote: »

I've got untill June to move it so I think I'll wait untill the new rules come out for LGPS in April.

Hopefully before April . If you do decide to do it, I'm not sure I'd risk waiting to April or later though - while the precedents of the USS and Nuvos suggest it will still buy you a final salary benefit, there's a risk the government will have it go against your 2014 not 2008 scheme normal pension age (i.e., state pension age not 65).

As you say, at least I know I can get the dough at 60 rather than 65, 67, or whatever it will be in the future.....

If you transfer it in before the new scheme starts, it will be 65, but not takeable unless you draw your 2014 scheme benefits as well... and if you take them at 65, you'll suffer a reduction.

Mind you, who says that wont change!?

The terms of the transfer itself will be safe - it's the terms of what it gets attached to that may prove a bit... flexible.