LGPS retirement help needed please!

littlelad

OP - Anyone who is 60 after April 2020 does not have any protection under Rule of 85 for benefits accrued AFTER 2008 service

MRMX9

littlelad wrote: »

OP - Anyone who is 60 after April 2020 does not have any protection under Rule of 85 for benefits accrued AFTER 2008 service

I agree - but the 85 year rule does offer protection for pre April 2008 service irrespective of your age.

Take someone aged 45 now in local government who started work in 1988 who wants to retire when they reach 60 in 2028.

Their state pension age will be 67 - so without the 85 year rule they wouldn't be able to take any LGPS benefits before 2035 without actuarial reduction. But the 85 year rule protection allows them to take 20 years (nearly half their benefits) seven years earlier without a reduction. The new regulations even allow you I believe just to take the pre 2008 benefits - and then the post 2008 later at state pension age.

Being able to take a large part of your benefits 7 years early without a 25%+ actuarial reduction - is surely a protection worth having?

MRMX9

Nick_C wrote: »

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.

The state pension age at which you can draw your LGPS benefits as well would be 66 for someone aged 54 now.

Without the 85 year rule protection if someone retired voluntarily at 60 they would take a 25% hit on their pension/lump sum - the protection allows them to take their pre 2008 benefits without reduction at 60 and potentially take the post 2008 at 66. This offers the potential to go part time - or leave service/do other work - and get the pension balance at 66.

That is certainly my understanding.

I agree with the NI issue - this follows on from the contribution rises in April 2014 for higher paid members. So that 1% pay rise will for some be offset by being 4% worth off due to contribution/NI changes.

The LGPS is still a good deal - if you live long enough to get it!

inthebubble

Thank you to the last poster for this really interesting idea that it may in future be possible to take lgps pension in tranches.

Is anyone able to direct us to the regs on that?

If it is possible, could the first tranche be at any age from 55 onwards, subject to normal reductions for early payment?

And what would happen to any AVC pot?

Many thanks.

hyubh

MRMX9 wrote: »

The new regulations even allow you I believe just to take the pre 2008 benefits - and then the post 2008 later at state pension age.

You sure about that?

My_perfect_cousin

Thanks again all. I'll email the pension guy to ask the specific question regarding the rule of 85. From emails he has said:

'...[FONT=&quot] it does not necessarily matter exactly when you meet the rule of 85 when voluntarily retiring, merely whether or not you meet it before age 60, which you do for your currently separate (old) pension record.[/FONT] '

Teaandscones

You can take LGPS benefits in tranches, but only if either:

1. You have separate benefits. or
2. You use flexible retirement.

see

https://www.lgps2014.org/content/when-can-i-take-it

Why this is the case I do not know, but the LGPS rules can be a bit bizarre.

hyubh

Teaandscones wrote: »

You can take LGPS benefits in tranches, but only if either:

1. You have separate benefits. or
2. You use flexible retirement.

That's not what MRMX9 alluded to though, is it...? Multiple memberships for multiple employments + flexible retirement was already there before the CARE scheme...

Why this is the case I do not know, but the LGPS rules can be a bit bizarre.

Hmm, separate memberships for separate employments (general case)/separate employments in all but name (flexible retirement cases) in a final salary scheme (until recently) that is itself split into multiple pension funds (still the case) sounds quite rational to me. It's combine-by-default that's arguably 'bizarre' - cf. the recent USS 'variable time' thread involving a situation that wouldn't arise in the LGPS...

Teaandscones

hyubh wrote: »

Hmm, separate memberships for separate employments (general case)/separate employments in all but name (flexible retirement cases) in a final salary scheme (until recently) that is itself split into multiple pension funds (still the case) sounds quite rational to me. It's combine-by-default that's arguably 'bizarre' - cf. the recent USS 'variable time' thread involving a situation that wouldn't arise in the LGPS...

What I find bizarre is that the very useful option outlined by MRMX9 of taking LGPS benefits in tranches only applies if someone is granted flexible retirement. If they retire or move to a job outside local government they have to take all the benefits at the same time.

esmy

MARTYM8` wrote: »

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.


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.

So, I have been in LGPS since 1983 with continuous service with one LA. I am 60 in November 2020 so I will have 'passed' the 85 marker by the time I am 55. Are my benefits up to 2008 protected if I retire at 55? Or is this still at the discretion of my employer?