Transfer from Local Government Pension Scheme

Opticalillusion

Hello all

I am in the process of looking for a new pension provider who can provide me with a SIPP. I wish to transfer my 'funded' local government pension across to a SIPP to help me access the 25% tax free lump sum and leave the rest invested. I have approx £170K to transfer. My local government scheme is happy to let me transfer out but I am now encountering problems finding a pension provider who will accept such a transfer as they all feel nervous about being caught out in future (similar to PPI I guess). I consider myself to be reasonably bright and understand the implications of what I intend to do and have done my homework. All I need is a reputable pension provider to transfer to who will accept this transfer in - does anyone have any suggestions?

I am 55 now and wish to make my own decisions about my pension - which I believe have been thought through and worked out thoroughly - I have calculated and forecast the total benefits of my existing scheme if I live to be 90 and in truth I am no worse off moving the funds now. My intention is to opt back into the LGPS after I have made the transfer - which is allowed under the scheme (it seems bonkers that we have to jump through so many hoops to do this).

Does anyone know a reputable pension provider who will accept a transfer in from a local government pension scheme - or are they all just too frightened now?

Sorry for the longwinded post - it's the nature of pensions I guess.

molerat

You will need an IFA to advise the transfer, way too risky for the companies to take it unadvised, and expect to pay at least £2K for that advice.

dunstonh

My local government scheme is happy to let me transfer out but I am now encountering problems finding a pension provider who will accept such a transfer as they all feel nervous about being caught out in future (similar to PPI I guess).

Statistically, most defined benefit occupational transfers would be considered as mis-sales if completed. Plus, the regulator requires an adviser to give the advice on these now. Coupled to that, the professional bodies and compliance companies have been telling IFAs not to transact insistent client transfers. (i.e. if the advice is that you shouldnt transfer and you insist you want to. If the advice is to transfer then you are fine).

I have calculated and forecast the total benefits of my existing scheme if I live to be 90 and in truth I am no worse off moving the funds now.

What is your critical yield?

it seems bonkers that we have to jump through so many hoops to do this

Not really when you consider that statistically, it would be the wrong thing to do in the vast majority of cases.

Good_bad_and_ugly

Opticalillusion wrote: »

Hello all

I am in the process of looking for a new pension provider who can provide me with a SIPP. I wish to transfer my 'funded' local government pension across to a SIPP to help me access the 25% tax free lump sum and leave the rest invested. I have approx £170K to transfer. My local government scheme is happy to let me transfer out but I am now encountering problems finding a pension provider who will accept such a transfer as they all feel nervous about being caught out in future (similar to PPI I guess). I consider myself to be reasonably bright and understand the implications of what I intend to do and have done my homework. All I need is a reputable pension provider to transfer to who will accept this transfer in - does anyone have any suggestions?

I am 55 now and wish to make my own decisions about my pension - which I believe have been thought through and worked out thoroughly - I have calculated and forecast the total benefits of my existing scheme if I live to be 90 and in truth I am no worse off moving the funds now. My intention is to opt back into the LGPS after I have made the transfer - which is allowed under the scheme (it seems bonkers that we have to jump through so many hoops to do this).

Does anyone know a reputable pension provider who will accept a transfer in from a local government pension scheme - or are they all just too frightened now?

Sorry for the longwinded post - it's the nature of pensions I guess.

Dunstonh,

To be strictly correct, and in the event someone else is reading who might be interested, it's also worth pointing out that the new guidance compels the saver to only demonstrate taking advice for transfers in excess of £30,000.

Optical,

The business of various compliancy bodies and IFA networks is timely. Most advisers would take the view that unless financial distress was an issue, it isn't the wisest of choices. Having said that, it's impossible to state with any degree of certainty what one would advise. You could become an "insistent client" which places more liability on your shoulders, but the regulator is keenly aware that advisers can quite easily contextualise a conversation with a view to disadvantaging a client.

In respect of legitimacy of the transfer out, the LGPS trustees have to confirm that the receiving scheme is a legitimate arrangement. Many pension providers are keen to accept money 'in' but are wary of the regulatory risk. James Hay, for instance, will receive money in but only when receipt of documented advice. Notwithstanding that, it's impossible to say whether it's a good idea for you, so I won't and you'll have to see an adviser I'm afraid. If you require limited advice, an IFA can do the business for about £1000 - costs are being hammered down and the consumer can only benefit.

In the absence of advice, are you certain the LGPS trustees are content for you to transfer without documented advice?

xylophone

http://www.wragge-law.com/insights/pension-reforms-are-you-ready-part-2/

hyubh

Opticalillusion wrote: »

I am 55 now and wish to make my own decisions about my pension - which I believe have been thought through and worked out thoroughly - I have calculated and forecast the total benefits of my existing scheme if I live to be 90 and in truth I am no worse off moving the funds now. My intention is to opt back into the LGPS after I have made the transfer - which is allowed under the scheme

Out of curiosity, when did you join the LGPS, and when did you turn 55? On the face of it 'banking' your final salary benefits (irrespective of then transferring out or not) might be prudent - presumably you're not expecting/looking for any more promotions (or conversely, redundancy), and neither the 85 year rule nor the CARE scheme underpin apply...?

(it seems bonkers that we have to jump through so many hoops to do this).

Dunno, being able to opt out and in again at will might sound 'bonkers' to some, not that I'm opposed to the possibility myself...

hyubh

Good_bad_and_ugly wrote: »

are you certain the LGPS trustees are content for you to transfer without documented advice?

GBU,

To be strictly correct and in the event someone else is reading who might be interested, it's also worth pointing out that there are no trustees in the LGPS, however LGPS administering authorities perform essentially the same function for matters like the current one

If you want a good clue has to how they will approach things, look at the LGA's guidance:

http://www.lgpsregs.org/images/AdministrationGuides/FandCTechnicalNotev1.1clean.doc
http://www.lgpsregs.org/images/AdministrationGuides/QandADBtoDCforAAsv1.pdf

Frankly, I doubt getting it out will be too much of a problem - the OP has a statutory right to transfer, and - unlike the trustees of a private sector scheme - an LGPS administering authority has no control over the terms of a CETV (well, it can petition the relevant government minister to apply a reduction if there's cash flow issues, but that's it). Rather, the difficulty will be at the other end, just as the OP is indeed finding...

Good_bad_and_ugly

I don't think he'll have a problem finding a receiver; there's just need the advice caveat. The Regulator has even implied it won't accept regulatory prevarication as sufficient excuse to delay funds in flight.

Trustee was easier to say!

System

Hi

The LGPS is not obliged to accept transfers in, although that does not seem to be your intent.

Also opting out and rejoining may be blocked if there is any question over health. You cannot join the LGPS in the hope/expectation of getting an Ill Health retirement.


Why at 55 have you suddenly decided to make your own decision about your pension? You made such a decision when you joined, and continued to contribute year after year. Perhaps even bringing in a transfer.

At 55 you can go for a partial retirement, to access your entitlement, stay employed and continue to contribute.

Living to 90 with a Lump Sum and Indexed (CPI) pension, against the vagaries of the stock market? You can expect IFA's to be cautious.