should I use an IFA

mark55man

My OH and I (mainly I) have identified that we think she should switch her LGPS pension (2.5 yrs accrues at 15K) into a TPS pension (1 year contract @ 30K).

What is the best way to do this - through her work, through the TPS or through an IFA.

I have had advice from this forum before which suggests its a good idea, but I am wary of making a mistake that could be costly, and we are very time poor for getting things done together at time when advisors may be open for business

jem16

mark88man wrote: »

What is the best way to do this - through her work, through the TPS or through an IFA.

I'm not sure what you would want the IFA for? Is it to check your assumptions or what?

I can't see any issues with transferring. Due to the Public Sector transfer club she'll get a straight transfer of her LGPS service into the TPS where it will then be worth twice as much. Assuming you have checked this out, it seems a no-brainer to me and I can't see that an IFA would tell you any different.

As to carrying out the transfer, you would simply contact the TPS and arrange it.

Wilkins

Does your OH intend to stay in teaching? If not, I'm not sure the transfer will be worth it. But if so, then I can't see the need for an IFA. Club transfers are, I think, mostly neutral in their immediate financial impacts.

For the mechanics of transferring, just download the form from the TPS website and follow instructions. You may, of course, wish to compare the investment style of the respective schemes and the fact that the LGPS scheme is market funded whereas the TPS one is not.

jem16

Wilkins wrote: »

Club transfers are, I think, mostly neutral in their immediate financial impacts.

Club transfers look at the benefits for each scheme and ignore the salary with each.

With the LGPS and the TPS that the OP's wife will be joining, the benefits seem to be more or less the same - ie retirement age 65, a sixtieths scheme ( or eightieths scheme with automatic lump sum), spouse benefit etc. So the transfer should be year for year between the two.

So LGPS = 2.5 years at £15k
TPS = 2.5 years at £30k.

In this case a big leap as opposed to being mostly neutral.

mark55man

Thank you very much - I appreciate your confirmation of my assumptions. If I have learned one thing from this board it is that it is best to check your assumptions

hyubh

jem16 wrote: »

Club transfers look at the benefits for each scheme and ignore the salary with each.

You mean 'ignore the salary of the new job'...? The 'like for like service' aim is achieved partly by using the final pensionable pay of the old job as the input pensionable pay for the new.

In this case a big leap as opposed to being mostly neutral.

Indeed - assuming both pay figures quoted were WTE (or the hours are full time in both anyway).

mark55man

hi hyubh

my OH worked full time both jobs, but because of the fact that TA's are treated badly although she work 08:30 to 3:30 she only got paid 9-12 and 1-3 so was effectively on 25/37.5 % part time

now she has returned to teaching she is still working extra hours but is at least getting 100% for it

hyubh

mark88man wrote: »

my OH worked full time both jobs, but because of the fact that TA's are treated badly although she work 08:30 to 3:30 she only got paid 9-12 and 1-3 so was effectively on 25/37.5 % part time

The important figure will be what payroll reported to pensions. Her final LGPS WTE pensionable pay figure will be on her deferred benefit statement, as produced by the LGPS administrator - in principle you need to compare it to her salary now. That said, it's highly likely the teacher salary is higher, and with potential to go a lot higher even when inflation is taken into account, in which case a club transfer (given the very similar benefit structures between the current TPS and LGPS) will be clearly desirable.

FatherAbraham

Wilkins wrote: »

You may, of course, wish to compare the investment style of the respective schemes and the fact that the LGPS scheme is market funded whereas the TPS one is not.

Why would a public-sector-pension-scheme member give a flying fig about a scheme's "investment style"?

TPS doesn't have one, since there's no fund. It's sheer state liability.

LGPS is funded, but the quality of the investment style is only of concern to the party with the liability -- superficially the legal employer, more profoundly the local taxpayers.

Only unfortunate mortals with defined-contribution pension pots need to care about "investment styles".

Warmest regards,
FA

jem16

hyubh wrote: »

You mean 'ignore the salary of the new job'...? The 'like for like service' aim is achieved partly by using the final pensionable pay of the old job as the input pensionable pay for the new.

Yes I did - bad wording on my part really.

kidmugsy

FatherAbraham wrote: »

Only unfortunate mortals with defined-contribution pension pots need to care about "investment styles".

FA

Plus mortals in private Defined Benefit schemes.