Dismissed from job in 2009 - refund of contributions?

Burnley_Lad

I was dismissed from my job in April 2009.

Would I be able to claim for a refund of contributions I made whilst I was there? I was contributing the Local Government Pension Scheme.

mgdavid

how long was that employment?
what options were offered to you at the time?

Burnley_Lad

Thanks for your reply. The employment was for 9 years, but just the last two were in the pension scheme.

As far as I am aware, no options were given to me at the time, but I do receive a 'deferred pension' statement each year still.

neilvw

I believe the general rule for occupational schemes is that refunds of contributions can only be made if you leave with less than 2 years' pensionable service. I think you should have been offered a cash equivalent transfer value though.

Out of interest, what is your deferred pension and how much do you think you paid in?

Burnley_Lad

Thanks for your reply.

I've worked out today that I paid in around £2,700 over the two years. I'm not sure what you mean by 'what is my deferred pension'?

hyubh

Burnley_Lad wrote: »

The employment was for 9 years, but just the last two were in the pension scheme.

As far as I am aware, no options were given to me at the time, but I do receive a 'deferred pension' statement each year still.

The vesting period in the LGPS was only 3 months in 2009. The fact you have a deferred pension every year ties in with that - once you meet the vesting period, leaving before retirement means a deferred pension, and no option of a refund. However, a deferred pension is much the better option anyhow (a refund would have been of employee contributions only, less tax and NI reclaimed by HMRC).

hyubh

neilvw wrote: »

I believe the general rule for occupational schemes is that refunds of contributions can only be made if you leave with less than 2 years' pensionable service. I think you should have been offered a cash equivalent transfer value though.

This is incorrect, the LGPS vesting period was only 3 months in 2009, and as such, at that point there was no 'middle ground' between having a DB and having a refund through payroll. Only now it's gone back up to 2 years does that middle ground exist, i.e. where a TV out but no DB is possible.

neilvw

Burnley_Lad wrote: »

Thanks for your reply.

I've worked out today that I paid in around £2,700 over the two years. I'm not sure what you mean by 'what is my deferred pension'?

How much annual pension does it say on the statement?

System

Hi

For 2 years service you will have 2/60 * Final Salary as a pension.

3.333% of your final salary. For 12K that would be £400 per annum. 16K would be £535 per annum. etc etc.

You paid in £2700, your refund would be worth around £2000.

So with a guaranteed 10 years of pension your 2K will be 4K (10 * £400), even possibly (10*£535) £5,350. etc etc.

So 30 years of retirement @ £400 per annum index linked is many time more than you paid in.

So look for your Statement and ask again if you want an explanation. of it's value/meaning.

hyubh

johndough wrote: »

For 2 years service you will have 2/60 * Final Salary as a pension.

As he left in 2009 it will be mixed 1/60ths and 1/80ths pension with a small standard lump sum.

So 30 years of retirement @ £400 per annum index linked is many time more than you paid in.

Regardless of the precise amount, absolutely - and from the OP's point of view it's rather a shame that he had opted out for 7 years previously.