Advice Requested for partners LGPS pension

taktikback

But the literature suggests that both the period of employment and the salary is used in the calculation of the actuarial equivalent?

and that suggests that the new salary is the basis of the calculation, otherwise what what would be the reference point for actuarial equivalence?

jem16

taktikback wrote: »

But the literature suggests that both the period of employment and the salary is used in the calculation of the actuarial equivalent?

Yes the old salary is used.

See Page 2 here;

http://www.civilservice.gov.uk/wp-content/uploads/2013/01/The-Public-Sector-Transfer-Club.pdf

How does a Club transfer work?

The transfer value calculation is generally the same as for a non-Club transfer. The difference is that the new Club scheme works out the service credit using a set of standard tables that all Club schemes use. The Club arrangements also require the new scheme to use the member's salary in the old scheme when working out the service credit, regardless of any increase on moving.
When someone transfers between two schemes with identical provisions, the transfer should produce a year-for-year credit. Where the scheme provisions differ, for example if they have different pension ages, a transfer might produce a higher or lower service credit.

taktikback wrote: »

and that suggests that the new salary is the basis of the calculation, otherwise what what would be the reference point for actuarial equivalence?

Club transfer rules say the old salary is used.

pandora205

Just to mention that transferring pensions across from LGPS to TPS is optional. Colleagues in my profession were previously in TPS, myself included, and some transferred and others (such as one who had been a head teacher previously) did not. There is a window of time to decide whether to amalgamate pensions (12 months I think). Having two pensions does make the pension statements even more complicated of course, especially for those of us in LGPS pre 2008.

My understanding is that CARE starts from 2014 and is not backdated so this protects previous pension accrued.

jem16

pandora205 wrote: »

Just to mention that transferring pensions across from LGPS to TPS is optional. Colleagues in my profession were previously in TPS, myself included, and some transferred and others (such as one who had been a head teacher previously) did not.

All transfers are optional. If it's beneficial to transfer then you should. If you lose out by transferring then you should not.

taktikback

OK -thanks for the clarification.

What I don't get, is why they bother referencing salary at all (old or new), if all they are going to do is a straight transfer of membership period?

hyubh

taktikback wrote: »

What I don't get, is why they bother referencing salary at all (old or new), if all they are going to do is a straight transfer of membership period?

At present, the LGPS and TPS benefit structures happen to be very similar. However, other 'club' schemes can have different normal retirement ages, different life cover benefits, etc., and moreover, transitional protections for people with service dating back to previous versions of their scheme can differ a lot - when you transfer into a new scheme, you transfer into the scheme as it is now and lose any transitional protections you might have had in the old one. E.g., someone with a lot of service in the LGPS might prospectively benefit from the 85 year rule, so the transfer value would be higher than otherwise to reflect the fact.

Andy_L

jem16 wrote: »

If I were to guess I would say that any final salary service should transfer over as final salary service and any CARE service should transfer over as CARE service.

Would there be any point in transferring/allowing transfer of CARE schemes as as the accrued pension is revalued annually via an inflation link and unaffected by any career development pay rises

hyubh

Andy_L wrote: »

Would there be any point in transferring/allowing transfer of CARE schemes as as the accrued pension is revalued annually via an inflation link and unaffected by any career development pay rises

The revaluation rates in the post-Hutton schemes differ... so yes, from a member's point of view (LGPS 2014/2015 is CPI, TPS 2015 CPI + 1.5% - teachers are getting a worse accrual rate instead).