Pension transfer to funded Govt Pension scheme

OldBeanz

Talking to a mate in the pub last night (so that is the level of this conversation) and he wondered whether this would work.

He is in the process of being made redundant from the Civil Service with a DB pension of £20k pa + £30k lump sum and as he is 60 there is no benefit in not drawing the pension.

He has seen a job in the papers offering an LGPS pension in a part time job worth £7k pa and realising this is a funded pension could transfer his existing CS pension into the LGPS;live of his savings for a couple of years; then take his whole pension to use as drawdown.

Now as stated this was just talk in the pub and he is aware that his pension makes him one of the lucky ones. Could he actually do this. Would he be locked in until his SP age of 66?

hyubh

OldBeanz wrote: »

He is in the process of being made redundant from the Civil Service with a DB pension of £20k pa + £30k lump sum and as he is 60 there is no benefit in not drawing the pension.

If he's reached his NPA in the scheme then he doesn't have a statutory right to a CETV (which isn't to say the scheme itself forbids one). If he's serious about this he should check with the civil service scheme administrators/read up on the scheme rules to see whether a Club transfer out is possible at his age (still involves a CETV, but special rules etc.).

He has seen a job in the papers offering an LGPS pension in a part time job worth £7k pa and realising this is a funded pension could transfer his existing CS pension into the LGPS;

If possible this could potentially be extremely lucrative given the previous government's cack-handed way in dealing with the implications of the new CARE schemes on the Club - see the section on Club transfers here:

http://www.lgpsregs.org/images/AdministrationGuides/TransfersInv1.2clean.pdf

then take his whole pension to use as drawdown.

You mean, transfer out again, this time to a DC scheme? If so then he may hit the NPA issue again, although the higher NPA of the LGPS (and more so CARE LGPS) will help with timing - since an LGPS member must take all their benefits at once, if different parts attract different NPAs the only one that will count with respect to the statutory right to a CETV will be the latest.

While against that there will be an actuarial reduction, the higher NPA of the final salary LGPS compared to the old final salary civil service scheme will make that negligible. (CARE LGPS = SPA, final salary LGPS = 65 [post-06 joiner so 85 year rule n/a], and a Club TV-in done within 5 years of leaving the old job will get a final salary service credit for the proportion of the old scheme benefits that were themselves final salary.)

That said... crucial point in all this is really my first one! If the civil service scheme doesn't allow him to transfer out given his age, then it's all academic...

OldBeanz

Thanks for that. I am not sure he wants a job but you know what it is like in the pub after a few sherbets.

xylophone

Thanks for that. I am not sure he wants a job but you know what it is like in the pub after a few sherbets.

Nobody in thish (hic) augusht community hash the faintest idea what you mean......:rotfl: