LGPS leaving under 2 years

Mrs_Money

I quite recently joined the LGPS (6 months ago), but due to family circumstances, I may actually have to leave my job (I'm 2 years off state retirement age) and will not be likely to work again.
The LGPS information sheet says "From April 2014, any member with less than two years membership will receive a refund of contributions rather than having a small deferred pension".
Does this mean just my contributions or my employer's as well?Not being greedy- just need to know the facts!

saver861

I don't know for sure but I expect the employer contributions will be returned to the employer.

hyubh

Mrs_Money wrote: »

I quite recently joined the LGPS (6 months ago), but due to family circumstances, I may actually have to leave my job (I'm 2 years off state retirement age) and will not be likely to work again.
The LGPS information sheet says "From April 2014, any member with less than two years membership will receive a refund of contributions rather than having a small deferred pension".
Does this mean just my contributions or my employer's as well?

A refund will be just your contributions, less tax and NI. As you would have been in the scheme for more than 3 months, you would be able to transfer out to a private pension instead though, which would be better as the transfer value would be more than just your personal contributions.

That said, if you could stick it out past two years, getting an actual pension (and given the low numbers, the option to trivially commute it) would probably be most opportune.

xylophone

Ask the employer if transferring out would preserve the employer contribution.

Although any receiving scheme would normally insist on an IFA sign off, it may be that under these specific circumstances, the likes of HL might accept a transfer without?

If you will have no earned income, you could still contribute up to £2880 pa to it and receive tax relief. https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

This pension would be available to you under the new rules.

https://www.hl.co.uk/free-guides/new-pension-rules-changes-2015

You will draw your state pension under the new state scheme.
https://www.gov.uk/new-state-pension/overview

You can obtain a statement.
https://forums.moneysavingexpert.com/discussion/5171092

Mrs_Money

"If you will have no earned income, you could still contribute up to £2880 pa to it and receive tax relief. https://www.gov.uk/tax-on-your-priva...ion-tax-relief"
Is a local government pension classed as a "private" pension?

Mrs_Money

xylophone wrote: »

Ask the employer if transferring out would preserve the employer contribution.

Although any receiving scheme would normally insist on an IFA sign off, it may be that under these specific circumstances, the likes of HL might accept a transfer without?

If you will have no earned income, you could still contribute up to £2880 pa to it and receive tax relief. https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

This pension would be available to you under the new rules.

https://www.hl.co.uk/free-guides/new-pension-rules-changes-2015

You will draw your state pension under the new state scheme.
https://www.gov.uk/new-state-pension/overview

You can obtain a statement.
https://forums.moneysavingexpert.com/discussion/5171092

As this is a final salary local government pension it's probably not possible to transfer it out, is it?

xylophone

It is possible to transfer out of LGPS and will remain so, even after April 6.

It is the usual practice for any receiving scheme to require an IFA sign off, but in this particular case, where there is no option but to leave the scheme, eg Hargreaves Lansdown might accept a transfer without.

Once in a SIPP, the former LGPS is just a private pension.

Even with no earned income, contributions of up to £2880 can be made to the SIPP and tax relief received.

hyubh

Mrs_Money wrote: »

As this is a final salary local government pension it's probably not possible to transfer it out, is it?

As you started six months ago, then assuming England or Wales, then it's CARE not FS, though still DB. What makes you think you can't transfer out?

http://www.lgpsregs.org/index.php/transfers

The ban on transfer outs from unfunded public sector schemes to DC arrangements from April is irrelevant to the LGPS.

System

Mrs_Money wrote: »

I quite recently joined the LGPS (6 months ago), but due to family circumstances, I may actually have to leave my job (I'm 2 years off state retirement age) and will not be likely to work again.
The LGPS information sheet says "From April 2014, any member with less than two years membership will receive a refund of contributions rather than having a small deferred pension".
Does this mean just my contributions or my employer's as well?Not being greedy- just need to know the facts!

Hi

If you had an old pension to transfer in, before you leave, then maybe there is a financial benefit to do so.

Equally a refund from one LGPS scheme may cancel out membership rights elsewhere


Otherwise....


If you opt out of the LGPS before completing 3 months membership you will be treated as never having been a member and your employer will refund the contributions to you through your pay.

If you opt out of the LGPS with 3 or more months membership and before completing the 2 years vesting period you can take a refund of your contributions (less any statutory deductions) or transfer out your pension to another scheme.

However, if you were in the scheme before 1 April 2014 and opt out on or after that date with 3 or more months membership and before completing the 2 years vesting period you will also have the option of taking a refund of contributions (less any statutory deductions).