Losing pension by promotion

MollyMoon

I have worked for a local authority for 22 years. I am 55 in september and planned to go on the 'Rule of 85' which kicks in when i am 57.5 yrs. To be honest I dont want to get carried out of the job feet first and i cannot face working in my field until i am 67.
I contacted LGPS administrators and was horrified to discover that when I agreed to a promotion within my own team 4 years ago the employer split my pension between my original staff number and a new one with the promotion. I am still in same team, doing same job but split 50/50 between worker and deputy team manager. My pension is now split between the one that I have paid into since I started working there and a new pension under new rules so in effect half of my salary no longer contributes to the Rule of 85' equation which means I cannot retire early. as planned. At the time I took the promotion nobody told me that i would lose out with my pension. They split my contributions between the two (in essence) posts but the result is that I am now severely disadvantaged by this and had no knowledge of it. I am absolutely devastated and don't know who I can turn to and whether I can in fact do anything about it at all. Local authorities are so powerful and I feel like I have been royally shafted by them with the discovery of this anomaly.
Any advice would be really welcome. Where can I go for help and can I fight this?
I am with a union but they are really quite useless.
Molly :cool:

Southend1

Not all union reps have taken a pensions course and they can be very complicated. Ask your union rep to take advice from a regional officer or seek advice yourself via the member helpline.

Can you not retire under the rule of 85 based on your old membership and take the remaining pension from your new job at the higher retirement age? Although I'm not sure why they seem to be treating you as having two separate memberships. It could be wrong or could be a quirk of LGPS. Someone more knowledgeable should be along to comment soon.

xylophone

Try PM to hyubh who is the expert on this scheme?

https://forums.moneysavingexpert.com/discussion/comment/68491331#Comment_68491331

http://www.lgps2014.org/content/rule-85-protection

hyubh

MollyMoon wrote: »

I am 55 in september and planned to go on the 'Rule of 85' which kicks in when i am 57.5 yrs.

By default the 85 year rule kicks in from age 60 onwards, regardless of whether age + membership is 85 before then. For a voluntary early retirement to benefit before age 60 requires employer consent (reason being, it will likely cost them).

I contacted LGPS administrators and was horrified to discover that when I agreed to a promotion within my own team 4 years ago the employer split my pension between my original staff number and a new one with the promotion. I am still in same team, doing same job but split 50/50 between worker and deputy team manager.

If that means you have two rates of pay, then splitting the pension was inevitable I'm afraid as it meant two final salary calculations. Other final salary schemes could be different, but that's just how the final salary LGPS worked (and typically it worked in the member's favour...).

My pension is now split between the one that I have paid into since I started working there and a new pension under new rules so in effect half of my salary no longer contributes to the Rule of 85' equation which means I cannot retire early. as planned.

It's a bit more complicated then that. You've got two separate memberships, both of which involve final salary benefits and both of which involve CARE benefits; however, as you imply, only one of them carries 85 year rule protections.

If you're looking to go before 60 and having the 85 year rule apply when you do so, then if anything having part of your pension not covered by it will surely increase the chances of your employer agreeing, since any strain charge from the pension fund will be lower.

On the other hand, if on reflection your aim is to retire age 60, then a way to put your two memberships together again would be to resign from the higher grade post shortly before age 60, request its pension membership is combined/aggregated into your remaining membership, then retire. (The gap is required since, so long as both memberships are active, you can't combine them.) With respect to your final salary benefits, they will then all be calculated against your lower rate of pay but with the combined-in membership pro-rated upwards to reflect the higher rate of pay at the point it ended... so you wouldn't lose out.

Local authorities are so powerful and I feel like I have been royally shafted by them

Neither is the case.

System

Hi

Disappointed to read this.

4 years ago, and you never received any Annual Benefit Statements since, showing you have at least 2 records / pensions within the LGPS, that is quite poor administration.

People in Local Authorities get moved around all the time, and they don't even realise it. The worst sort is a cost centre change and HR terminate your employment and start a new one for you without telling you. Then you lose your added years contract that was attached to the original post.

So first of all speak / have a face to face with the LGPS people and find out your status, and your potential at aged 60.

Consider "tricks" like asking about leaving the LGPS 1 month after aged 60, and then 1 month later leave your employment, so you have 2 deferred benefits. Could they be combined?

Ask about joining the two records together, even if it means leaving and rejoining the LGPS on 1 employment. Then start a new small one at 49ths which will payout eventually, limiting the amount excluded from the rule of 85.

OH Yes, do have a go at your union folk, and shout loudly at HR it may garner some information.

AlanP_2

It's unlikely to be HR per se that you need to talk to, although the LGPS admin team may be "hosted" within HR.

My wife is a District Council HR Manager and she has always found the county based pensions team to be very helpful and not attempting to "shaft" people deliberately, far from it in many of the complicated cases she discusses with them (severe illness and the like).

Give your pensions team a call and ask to meet with one of the to talk the situation through and see what the options are (might be worthwhile getting a normal HR advisor so sit in as they may well understand the contractual side of things better).

Southend1

johndough wrote: »

OH Yes, do have a go at your union folk, and shout loudly at HR it may garner some information.

Having a go or shouting at people is not likely to achieve the desired result. The union rep is a trained volunteer, doing his best to help members often in very difficult circumstances. The HR staff are probably not experts in complicated pensions situations either. However if OP is polite and persistent both should be able to help her access the information she needs.