LGPS retirement help needed please!

ellie-g

Oh yes Kidsmugsy and in answer to your question my state pension will start at 66 (I am almost 58 now).

My_perfect_cousin

thanks all for your help

As an update re the original thread. I have now taken some (brief) independent financial advice.

The general advice was to leave the two pensions separate on the basis that it is possible to predict what is likely to happen if my 'old' (larger) pension is kept alone. Whereas it is more risky to combine the two pensions and hope that the final arrangements are advantageous / I am made redundant.

The IFA also talked about pension changes planned for April 2015. He said that they would be significant for LGPS folks I wasn't aware of these.

As my wife will have 31 years of (a single) LGPS on 31 August 2014 and is also 54, we'll need to find out what's what!

BTWthe IFA was keen that I got confirmation of my rule of 85 situation. I said that I have emails stating that I will meet it by the age of 60 as by 31st August I will have 30 year plus 3 months of 'old' service, I will be 54 years of age and I will have 9 months of 'deemed' service. (In effect the 9 months of 'deemed' service will have been spent in the employment of my new employer.

I do find this 'deemed' service a bit odd, but the pension guy has clearly written that I will meet the rule of 85 by the age of 60..

I guess that, by age 55, I will have certainly done so as my age plus actual (old) service of 30 years will add up to 85.

I think that the IFA advice is pretty much in line with advice received on this excellent forum I think.

ie - avoid trying to be too clever!

I'd value any more wisdom etc however. As it stands, I plan to talk to the IFA again in October before making a final decision.:)

Fairzo

My_perfect_cousin wrote: »

The IFA also talked about pension changes planned for April 2015. He said that they would be significant for LGPS folks I wasn't aware of these.

:eek: Any clues?

hyubh

The IFA also talked about pension changes planned for April 2015. He said that they would be significant for LGPS folks

Hmm... I'd be inclined to press him a little on that. Unlike the unfunded public sector schemes, transfers out to money purchase schemes aren't being banned. Conversely, and this time like the unfunded schemes, there are no plans to adjust scheme benefits downwards to reflect the end of contracting out (private sector DB schemes in contrast are being allowed to do this given the increase in employer NI conts involved).

, but the pension guy has clearly written that I will meet the rule of 85 by the age of 60..

But with full or merely tapered protection? I'd double check, like the IFA suggests.

kidmugsy

ellie-g wrote: »

Oh yes Kidsmugsy and in answer to your question my state pension will start at 66 (I am almost 58 now).

A mere slip of a girl.

littlelad

OP - are you 60 after 31 March 2020? This is the expiry date for any tapered protection under Rule of 85.

My_perfect_cousin

Yes - I will be 60 in 2020 but not until after 31st March 2020

MARTYM8`

littlelad wrote: »

OP - are you 60 after 31 March 2020? This is the expiry date for any tapered protection under Rule of 85.

There is actually other protection under the 85 year rule for anyone who joined the LGPS prior to 30 September 2006 in respect of their pre April 2008 earned benefits.

Essentially if you meet the 85 year rule you can take your pre April 2008 earned benefits earlier than your state pension age without actuarial reduction.

So say you have 25 years LGPS service and reach the age of 60 - you meet the 85 year rule even if you don't hit 60 until 2030. You can take 100% of your pre April 2008 benefits at 60 - but your post April 2008 benefits are subject to the usual actuarial reductions pre state pension age.

The 85 year rule is calculated differently for deferred benefits - this being your LGPS service plus your age plus the number of years from the date you left the LGPS to your retirement.

So anyone with limited LGPS service who returns to local government late in life should be careful about merging their deferred benefits because they might lose this protection (as if they merge their service plus their age may well be less than 85).

A lot of people don't realise this - but it explains why a lot of people are able to go part time in local government at 60 cos they can draw down their pre 2008 benefits without reduction so they are no worse off by going part time.

It is complicated - but the 85 year rule still offers protection to anyone with service pre Sept 2006. It doesn't just apply to those aged 60 by 2020.

The OP cannot lose his 85 year rule protection whatever his decision - as he has 30 years service and is nearly 55.

Is it any wonder people get confused re the LGPS - most people don't have a clue about these minor things which are actually very material for your choice of retirement date!

MARTYM8`

Fairzo wrote: »

:eek: Any clues?

There are no specific changes to the LGPS planned for April 2015 as far as I am aware.

There were big changes this April - not just to the main scheme but also to AVCs (i.e. anyone starting an LGPS AVC post April 2014 can only take 25% of their AVC as a tax free lump sum - rather than potentially being able to take 100% of their AVC as a tax free lump sum if the total is less than 25% of their total pension pot in the LGPS). That was another sneaky change made which few noticed - as that was one of the big selling points of AVCs in the LGPS. Not that I expect 25% tax free lump sums will last much longer if Labour win the election.

There are wider pension changes of course - but these don't necessarily affect public sector schemes specifically.

Nick_C

Because of the length of time you have been in the scheme, isn't your normal retirement age 60 anyway? I thought the 85 rule only applied to early payment on redundancy, after 55 but before 60.

Only change I'm aware of in 2015 is you will no longer pay a reduced rate of NI. However, contributions from 2015 will count towards the new State Pension.