simple LGPS advice Q. !

simonineaston

Hi folks,
A straight-forward question about my local govt. pension membership... Since 1999, I have worked for 3 separate local authorities and paid into the LGPS , while at each job. I had a year to decide whether to transfer the pension from my last scheme to my current one, and the year is nearly up, and I need advice about what is best to do - where is the best place to get advice from? Should I pay a private advisor or can I get good advice about LGPS schemes from a public source?
Nearly everyone I have spoken to so far is at pains to point out that they cannot give advice but instead can only tell me the options, so of course I still don't know what to do for the best. What to do?!

Drp8713

I doubt a financial advisor would be much use as it is a specialist area really.

Here are some things to consider:

Under the pre-2014 schemes, your pension is based on your full time equivalent salary, so if thats higher now than when you left the other jobs then, your pension would be higher if you transfer.

However, your old pensions would have increased by CPI and maybe RPI depending on when your job ended, so if inflation has or will go up a lot quicker than your salary has or will then you might not want to transfer.

If your salary is now lower than before you might not want to transfer, but if you get a big payrise or promotion later in your career then it would be too late to combine.

If you get made redundant over the age of 55 your pension with that employer and any you have transferred in will be paid in full, pensions not transferred are not.

If you do transfer you lose the flexiblity of being able to take the pensions at different times.

Gaps between service that count towards rule of 85 notional years are lost when combining, but combining can bring forward your NRA.

I could go on but to put it simply, its not simple and the best option usually depends on future pay awards, promotions, inflation, redundancy, all of which are currently unknown.

GunJack

Isn't the LGPS a national scheme then? So regardless of which local authority you are with you're paying into the same scheme?

FatherAbraham

GunJack wrote: »

Isn't the LGPS a national scheme then? So regardless of which local authority you are with you're paying into the same scheme?

Not entirely.

For a start, distinct periods of membership are kept separate, unless specifically combined. So,

Secondly, it's a funded defined-benefit scheme, so there's no national pot to back the liabilities of each employing authority. One might therefore argue that the risks of default vary from authority to authority.

Thirdly, there are differences in the benefits accrued up to 2008, between 2008 and 2014, and post 2014. Note that pre-2014 and post-2014 service periods have distinct scheme pension ages -- but where a member has continuous service through the changeover, the pension benefits accrued must be taken at the same time (either one "suffers" an actuarial reduction on the post-2014 benefits by using the 2008-2014 pension age, or one "enjoys" an actuarial uplift on the pre-2014 benefits by using the 2014-scheme pension age).

Of course, the financially astute will note that the actuarial costs/benefits associated with having the choice of taking a different retirement age are fairly priced, and the value/cost of having the option is not charged to the member at all.

Warmest regards,
FA

System

Hi

No.

It is regulated by central government, each of the administering authorities have their own bank account and investment strategies, at a local level.

Also if you work for a charity or a private school you can be in either the TPS or LGPS, and that part of the LGPS is not funded by the council tax payer, but the individual and their employer.

A fee paying school offers this as part of their package...

Some of the benefits of working at Solihull School:

• Significantly reduced tuition fees
• Sickness and Maternity benefits equivalent to the Maintained Sector
• Free lunch during term-time
• Access to the Teachers’ Pension Scheme, or Warwickshire County Council Pension Scheme for non-teaching staff

AlanP_2

Have you rolled your previous pensions onto the new employing authority when you have changed jobs in the past i.e. do you have one pension to transfer that covers the period 1999 to (approx) mid 2014 when you joined your current employer?

With continuous pensionable service all the way through?

If you have it would appear to be sensible to bring this across into your current employer's scheme as you would then enjoy the benefit of having all your pre-2014 changes employment counting towards the final salary element that applies to pre-2014 employment.

Assuming that your current salary is higher than it was in the early 2000's.

simonineaston

Thanks for comments, folks - my current salary is almost exactly the same as my previous , but unlikely to increase any more - that's one of my quandaries.