LGPS - 2yrs study - NHS pension

wilkies5

Hello, I currently pay into a Local Govt Pension Scheme. I intend to take 2 years out to study for a change of career before resuming a higher paid job in a different sector: NHS.
Please advise if I have to 'port' my pension over - or freeze it and start again? I am 51 years old and do already have 32 (out of the 35 yrs) years of contributions so I know I will qualify for the state pension but want to make enough provision for myself when I retire at 67.
Does anyone have any advice for me please?

kidmugsy

There's no question of freezing it; LGPS pensions don't suddenly become static in value the moment you leave the scheme.

central

Are you going to train as a physician's associate?

wilkies5

Er....no. ODP actually.

xylophone

Your LGPS pension is deferred, not frozen, if you leave the scheme.

http://www.lgps2014.org/content/deferred-benefits

Re transfer from LGPS to NHS

http://www.nhsbsa.nhs.uk/Pensions/4192.aspx

http://www.civilservicepensionscheme.org.uk/media/95420/club-list-dec-15.pdf

molerat

As you have been a member of a contracted out pension your 32 years is a bit irrelevant, it is the starting amount that matters and how many years you need to pay to achieve the maximum SP figure.

xylophone

As you have been a member of a contracted out pension your 32 years is a bit irrelevant, it is the starting amount that matters and how many years you need to pay to achieve the maximum SP figure.

Your 32 years qualifies you for a state pension but you will receive the New State Pension.

https://www.gov.uk/new-state-pension/how-its-calculated

See here re contracting out and the new state pension.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447195/new-state-pension--effect-of-being-contracted-out.pdf

The NSP was set at £155.65 for 2016-17.

You will be able to obtain an accurate statement of your "starting amount" from around October this year.

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

hyubh

wilkies5 wrote: »

Hello, I currently pay into a Local Govt Pension Scheme. I intend to take 2 years out to study for a change of career before resuming a higher paid job in a different sector: NHS.
Please advise if I have to 'port' my pension over - or freeze it and start again?

You would have to explicitly request a transfer if you wanted that, otherwise your LGPS benefits would remain 'deferred' and separate.

Assuming you joined the LGPS before April 2014, rejoining a public sector scheme within 5 years of leaving the LGPS and transferring in the old LGPS pension will lead to a final salary service credit in the new scheme corresponding to your pre-2014 LG service. If your new rate of pay were higher than the old, allowing for inflation, this will be particularly beneficial because the transfer will be done on 'Club' terms as xylophone suggests.

On the other hand, if you've got a large number of years in the LGPS, transferring would mean you lose any 85 year rule protections for drawing your pension without reduction before 65. That said, the service credit in the NHS scheme would compensate for that, so if you had no intention of retiring earlier, this issue would actually be one point in favour of transferring (i.e., get a bit more pension in exchange for losing a minimum retirement age you never cared for in the first place).

Lastly, if you only joined the LGPS recently and so only have CARE benefits in the scheme, transferring would be a bit pointless because you would not get the NHS scheme's higher active member revaluation rate - the government in its wisdom has decreed that the old scheme's rate should still apply, meaning for a LGPS to NHS transfer your transferred-in CARE benefits would continue to increase only by CPI. For the increases just gone this would have meant losing money because CPI was negative (while revaluation in deferment is CPI too, that has an effective underpin of 0% due to covering pensions legislation).

(PS - much of what I've covered above is in here:
http://www.nhsbsa.nhs.uk/Documents/Pensions/Transfer_Booklet_(V14)_online_10.2015.pdf)

MARTYM8`

I would reiterate the previous posters points.

Seek advice before doing anything (transferring or not) - as you could make a big financial mistake depending on your LGPS service and new vs old salary.