LGPS - problems with getting final figure

cattermole

Hi

We are having problems with our LGPS getting a final figure because of the changes in April 2014 they say you can only get a figure up until the end of this year by logging in yourself on line (although the website seems to be very on and off as well) as they can't do calculations for after that at the moment until the scheme goes through parliament.

It all seems very last minute doesn't it?

Any idea of how I can do a rough calculation for those two months?

hyubh

cattermole wrote: »

We are having problems with our LGPS getting a final figure because of the changes in April 2014 they say you can only get a figure up until the end of this year

Practically, the administrator can either say that or offer massive, off-putting disclaimers.

Any idea of how I can do a rough calculation for those two months?

What is your normal pension age in the current scheme? If you don't know it off hand, it should be on your last annual benefit statement (it will be between 60 and 65 - 65 if you joined in 2006 or later, potentially from 60 if you joined earlier and have a reasonable amount of service).

Also... what do you mean by 'final figure' exactly?

cattermole

Sorry should have explained it's for other half, he meets the 85 year rule on his 60th Birthday. So no loss of benefits that has been confirmed by the administrator.

We can calculate up until 31st March on the online calculator as advised to do. So pretty much know the figure but...

After April the calculation for the last two months he will be in the scheme (as he plans to take it on his 60th Birthday at the end of May) will be under the new LGPS 2014 rules i.e. average of salary for time in scheme and 1/49th.

What they are saying is they haven't got the system up and running yet to factor in the last two months contributions, so can't give a final figure.

It isn't going to be that much more from the figure we have for up until the 31st March but would be good to know how much this small amount will be.

Andy_L

For the last 2 months it will be

2/12ths of 1/49th of his annual salary

or about 0.35% of his annual salary

However, AIUI, that will then be reduced for taking it 5 years early as the 2014 scheme has an NRA of 65

hyubh

cattermole wrote: »

After April the calculation for the last two months he will be in the scheme (as he plans to take it on his 60th Birthday at the end of May) will be under the new LGPS 2014 rules i.e. average of salary for time in scheme and 1/49th.

Not necessarily - he will be protected (benefit) from the 'underpin'. As such, calculate his pension as if the schene weren't changing, and there's your estimate. To do this, you need figures for his final salary, years and days reckonable membership up to and including 31 March 2008, and years and days reckonable membership 1 April 2008 to retirement. If he's part time, then the final salary should be scaled up to whole-time equivalent, and if he's ever been part time, then the service scaled down for part time periods.

cattermole

Slightly confused as two different answers but thank you.

Andy L thank you presumably you mean only the two months contributions in the new scheme is affected by taking it early? As he has protected rights for prior to that and does meet the 85 year rule and should have no loss of benefits.

http://lgps2014.org/content/rule-85-transitional-protections

The above link seems to indicate he would have no loss of benefits on the 2 months in LGPS 2014 either.

hyubb thank you we have all that information on the statements to date and can add it on. Or use the pension calculator in the members log in. He has never worked part time to date and won't be until after he takes the pension,

Another question is it worth re-joining the new scheme once he goes part time? We tend to think it is a) for life cover b) for extra saving until full retirement

hyubh

cattermole wrote: »

hyubh thank you we have all that information on the statements to date and can add it on.

Well, as a final salary pension it's not exactly 'adding on', though if his salary hasn't changed it will be. Remember the last ABS will have provided figures for up to 31 March 2013, so you will need to be 'adding on' the following:

Quoted pensionable pay x 1/60 x 14/12

or more simply

Quoted pensionable pay x 0.0194

So, if his pensionable pay according to the ABS is £40,000, then the extra unreduced pension will be 40000 x 0.0194 = £776 pa.

Another question is it worth re-joining the new scheme once he goes part time? We tend to think it is a) for life cover b) for extra saving until full retirement

Yes, especially as he will benefit from employee rates being banded by actual not whole time equivalent pay come April.

cattermole

Thank you very much you have been really helpful, I think I have the figure now.

Sorry just one more question they don't seem to add "sick pay" into the balance figure column on the pay slip and it shows it separately. Am I right in thinking that if it is full pay and normal deductions for pension etc. that it does count towards final salary?

Its a tad annoying the way they have changed the payslips because they don't show a total gross income for the year just the total taxable amount.

hyubh

cattermole wrote: »

Sorry just one more question they don't seem to add "sick pay" into the balance figure column on the pay slip and it shows it separately. Am I right in thinking that if it is full pay and normal deductions for pension etc. that it does count towards final salary?

Assuming he hasn't gone down to nil pay, the figure provided to the pension administrator should be the normal one, i.e. as if your husband/partner wasn't off sick. As such, sick pay doesn't come into it at all.

That said, it is possible the ABS figure won't reflect that - the pension administrator will do proper checks on the data provided by employers when a person leaves, but the sheer volume of data involved in the annual returns will preclude doing anything other than rough checks (e.g., they might query figures for individuals whose pay has supposedly dropped by 10% or more since the previous year).

(ABS = annual benefit statement by the way - I've just realised I used it before without spelling it out. Regardless of who distributes them, ABSs are produced by the pension administrator from the annual return/end of year data provided by employers.)

cattermole

Thanks ever so much. It says in all the rules it should be included unless you have reduced pay or unpaid and they took the same pension contribution. I figured what the ABS is but nice to have it clarified for sure

When we did get into his LGPS on line calculator last week it came out with a slightly higher figure, than the calculation than I get now using the formula above so will have to wait and see I guess But we are within a couple of hundred or so, but that all counts when trying to sort other things out.

The website has now been down for over 5 days, so not sure what is going on there?! Maybe they are trying to put the new scheme on.

cattermole

Rather than start another thread.

Can someone possibly explain please how it works if you decide to sacrifice some of your annual pension into a larger lump sum.

Pre 2008 lump sum is frozen at a set amount for Husband so we know what that is.

How do you do the calculation to work out how much more you could get as a lump sum verses loss in annual income from the pension.

Many thanks.