Transfer in private pension to LGPS?

throwa

Morning all.

I am just after some advice as to what I should do. I currently have a pension of about £165k invested in a personal pension plan with Aviva. I have just started a new role in local government and have been offered the opportunity to transfer all or some of the personal pension into the LGPS scheme. What would be best to do? Current salary is £80k, I am 37, married and the main earner. Ideally I would like to retire late 50s so would need some cash coming in to see me through to whatever retirement age would be by then.

thanks.

System

Hi

Go through the process of transferring everything in, and DO NOT COMMIT until you can see figures that you understand and are acceptable.

There are guarantees with the LGPS, so you will automatically join and have those benefits outlined, Death in Service, Ill Health etc etc.

Then see what kind of projection is likely to take a lump sum at it's maximum, then look at the additional amounts for transferring in against keeping a separate pie to take slices from later on.

Only then can you make any kind of informed decision, with or without an IFA as you choose.

You look likely to get close to 20 years in the LGPS, and it's accrual rate is slightly over 2%, so roughly you can expect (adjusted for CPI) to accrue 40% of your salary as an LGPS pension.

Therefore get some numbers and come back if you need to .

AlanP_2

I would initiate the process and get the estimate from LGPS in terms of what your £165k will "buy you" in the current LGPS CARE scheme.

You need to initiate the process within 12 months of joining.

You'll need to look at what they offer but in general terms there are potential advantages and disadvantages, the main ones being:

A defined future pension that will increase with CPI as opposed to a pot that is at the mercy of market forces.

Linking all (?) your pension together in terms of the date you can access it on. Keeping them separate gives more flexibility in this regard.


I did this a few years ago when it was a Final Salary Scheme and sacrificed the flexibility for the guarantee that would only increase as my salary increased (the 1% annul pay rise came in just after so that bit hasn't worked out quite as well so far).

Finally, don't forget you can start up a standalone PP / SIPP to run alongside the LGPS in the future to get a bit of flexibility back, well worth considering when you get HR tax relief on contributions.

Has your other half got a pension?