Lgps active member with deferred pension age 56 made redundant pension offerred reduc

macca789456

Hi thanks for your comments Hyubh. H R confirmed in an e mail that the deferred rights would be taken into account if combining pensions also several members of the pension unit said so in telephone conversations when asked, they also confirmed it had been allowed by letter to combine them. The second period of employment has ended now, They are not showing any calculations for that they have added an ammout onto the pensionable pay as stated in first quote. With regard to the conversion of pension to lump sum they are now saying that the reason it can only be 52 pounds is because of the maximum allowed under the rules at the time I think they mean tax allowances or something.Is it right that they can use the latest salary amount rather than the higher first one which would be more favourable. If they are not allowing any deferred rights then why are they using the old pre 2008 calculations where is the rules and regs that say this is allowed It appears they are choosing the latest salary to get the lowest amount and the earliest rules to get out of any pension to lump sum conversion. Many thanks for your input.

woolly_wombat

macca789456 wrote: »

Is it right that they can use the latest salary amount rather than the higher first one which would be more favourable. .

Yes.

That's the downside of combining. Might have been better to wait 'till 60 to get the deferred pension separately.

Have another look at Drp8713's post no 4.

WW

hyubh

Is it right that they can use the latest salary amount rather than the higher first one which would be more favourable. If they are not allowing any deferred rights then why are they using the old pre 2008 calculations where is the rules and regs that say this is allowed

Combining memberships means things work as if the member only had one employment, perhaps with a large period of unpaid leave in the middle. If someone joined the LGPS in (say) 1990 and left in 2012, their pension would be calculated in two parts, the first based on pre-2008 terms for membership prior to April 2008 and the second based on LGPS 2008 terms for the service April 2008-2012. Nevertheless, the final salary used for both elements would be the same figure, viz., their final pensionable pay, and the two elements could not be drawn separately.

macca789456

Hi thanks for your answers. Why is the value of the deferred benefit built up over the years not retained when combining pensions? How come it gets taken out of any calculations. As they are using final salary and my pension now ends under the new CARE regs does this mean i will have three sets of calculations shown when breakdown of this arrives ie pre 2008, service till 1986, post 2008, service from 2009 till 2014, and CARE service april 2014 till july 2014. What If the pensions are combined should they not fall under the latest pension regs they have been put in , after all they are using that final salary for their calculations and although they are using final salary they are using what looks like 1986 IR max limits to peg back the conversion of pension into lump sum to about 55 pounds allowed. Many thanks.

woolly_wombat

macca789456 wrote: »

Hi just wondered if this looks right. Ihave a deferred pension with lgps of 10 years service from 1976 to 1986 I chose not to combine both pensions as my deferred one allows me to retire at 60 and has better pension to lump sum conversion rates 18 to 1 as 12 to 1 I was told by pensions that if i combined them as i was being made redundant i would keep my deferred pension rights.

Yes, you were right to keep the memberships separate, and I really don't like the sound of that. Pensions can be very confusing and it sounds as if you have been led astray. I don't know if there's anything you can do now, but if you are a member of a union then I suggest you contact them (although I have to admit that last time I spoke to a union rep about a pension issue they were very ill informed). You need to speak to a lgps pensions expert.
WW

hyubh

woolly_wombat wrote: »

Pensions can be very confusing and it sounds as if you have been led astray.

How so? The only thing the OP has actually quoted from the pensions administrator (see post 9 above) was right on the money.

hyubh

macca789456 wrote: »

Why is the value of the deferred benefit built up over the years not retained when combining pensions?

What do you mean? As previously explained, when 'combining' you move the membership pertaining to the deferred pension to go against the latest job instead. In other words: you are exchanging the deferred pension rights for more pension rights connected with the latest job.

As they are using final salary and my pension now ends under the new CARE regs does this mean i will have three sets of calculations

Yes, unless you fall under the 'underpin' in which case there will be four calculations - if you were within 10 years of your previous normal pension age on the scheme changing, then the post-April 2014 element of your pension will be the better of the CARE pension and if the previous scheme had never actually finished. (Chances are the CARE pension will be higher however, given how salaries generally aren't keeping up with inflation in the public sector.)

What If the pensions are combined should they not fall under the latest pension regs

Yes, and the latest regulations say, membership up until March 2008 produce benefits under the rules of the time and membership between April 2008 and March 2014 produce benefits under the rules of LGPS 2008.

after all they are using that final salary for their calculations and although they are using final salary they are using what looks like 1986 IR max limits to peg back the conversion of pension into lump sum to about 55 pounds allowed.

What do you want exactly - all the final salary element of your pension to be calculated under LGPS 2008, and therefore, with a commutation rate of 12/1?

macca789456

Hi many thanks for your replies.I think the problem is the way the pensions unit have explained things. Before i got the explanation in post nine, and the offer to combine i asked on several occasions on the phone and got an e mail saying i could keep the deferred benefits without reductions. So i applied to see if i would be allowed to combine them which was accepted this was followed with the figures which were quite lower.It was then explained that the annual increases would not be retained and the deferred benefits they referred to were the years service.The annual increases make up the most of the amount as you can see in post nine. I think it is the way deferred is interpreted as the service in years was always going to be there, it is the 28 years inflation increases that i have to forego which seems harsh and unfair When i reached sixty my N R A would it have been called retirement pension or my deferred pension.
If it came under LGPS 2008 regs would there be a lump sum without any conversions. Many Thanks

hyubh

macca789456 wrote: »

I think it is the way deferred is interpreted as the service in years was always going to be there, it is the 28 years inflation increases that i have to forego which seems harsh and unfair

If you combine, you forgo the deferred benefits and instead get extra membership against your latest salary. If you want your deferred membership to still produce benefits on your old salary (uprated for inflation), don't combine. The fact combining may not be in the member's interests is why you have to explicitly elect for it.

If it came under LGPS 2008 regs would there be a lump sum without any conversions.

Membership from April 2008 produces no standard lump sum; instead you can buy one at a rate of £1 pension forgone for £12 lump sum bought (this is an intentionally poor rate).

Teaandscones

hyubh wrote: »

If you combine, you forgo the deferred benefits and instead get extra membership against your latest salary. If you want your deferred membership to still produce benefits on your old salary (uprated for inflation), don't combine. The fact combining may not be in the member's interests is why you have to explicitly elect for it.

That is true, and with pay awards likely to be less than inflation in the next few years, unless you expect significant promotion there is a good argument not to combine. Note that for those starting LGPS membership after 1st April 2014, the default on combining has been reversed. If you started new service from April, you now have to explicitly request separate benefits within 12 months otherwise your pensions will be automatically combined.