AVC Prudential / LGPS

Sandyeyes

I was due to take my LGPS pension, lump sum and AVC starting from 1 August. I have received the figures from the pension people and filled in all the paperwork and I thought all was well. I phoned up Prudential to ask when the AVC would be processed only to be told that some shares part of my AVC is invested in have been suspended so they won't finalise the AVC. This in turn means the LGPS people will not pay my monthly pension and lump sum. So I will have no income. I have phoned prudential several times but they just say there is nothing they can do as there could be tax implications. The LGPS people can't pay anything until the AVC is wound up. I am devastated and worried to death as I can't get anywhere with either prudential or LGPS. Does anyone have any suggestions or suggestions for dealing with this please?

System

Hi

IF you have an LGPS pension, then it is independent of the Prudential AVC. Therefore, based on your choices, the LGPS part can be paid on the stated date.

It is quite usual for the AVC to lag behind by a few days. This could have been mentioned at the time of application.

So who is you administering authority?

What have you chosen that will cause there to be problems? NOTHING probably.

So the pension can be paid immediately, with the adjustments made for the AVC retrospectively.

dunstonh

I phoned up Prudential to ask when the AVC would be processed only to be told that some shares part of my AVC is invested in have been suspended so they won't finalise the AVC.

Property fund by any chance?

Does anyone have any suggestions or suggestions for dealing with this please?

For the benefit of others, in the lead up to retirement when you intend to fully withdraw from that pension product, you should switch your funds to low risk, liquid investments such as deposit and maybe some gilts. Equity funds are liquid but can be volatile (risk of a crash just before retirement). Property funds are not liquid and during periods of recession or decline, they can suffer short term suspensions which result in you being unable to access the funds.

Because of a run on property funds following brexit, most providers suspended their property fund.

Does anyone have any suggestions or suggestions for dealing with this please?

If it is a property fund then there is nothing you can do about it until the suspension is lifted. The suspensions are normally less than 6 months and most started in July.

The AVC is not directly linked to the occupational scheme. So, you could take that and then deal with the AVC later.

AlanP_2

The issue might be that with the pre-2014 AVCs associated with the LGPS you can take the AVC as a lump sum tax free provided that the AVC pot falls under:

(LGPS Annual Pension *20) + Any LGPS Lump Sum + AVC Pot all multiplied by 25%.

Presumably if the AVC can't be "cashed in" Prudential can't set a value on it so hence the LGPS administrators can't calculate the the overall "value" and pay everything out.

Is that the case OP - Were you planning on using the AVC to fund a lump sum up to the 25% tax free limit?

Why that should stop the LGPS paying your monthly pension sounds like a "Computer Says NO" problem as their system probably has no way of starting the monthly element without the Pension Commencement element having been completed.

That may not help you resolve the issue OP but could explain how things have ended up where they are.

Good Luck with trying to unpick it all and access some cash.

xylophone

This in turn means the LGPS people will not pay my monthly pension and lump sum. So I will have no income.

This does not seem to me to be reasonable - have you spoken to the administrator ( and you want a manager) as a start?

You might read

http://www.pensionsadvisoryservice.org.uk/pension-problems/making-a-complaint

You could ring and discuss.

System

Hi

If it starts on 01 August then payday will be either the last Friday or last day of the month, 31 August.

So until 01 September you wont know if it is late being paid.

And I do concur about the linking of the lump sum etc, but know that it can be guesstimated and adjusted if needed by prior agreement, paying a potentially lower figure and a small top up the following month.

SO it is the LGPS you MUST speak to and have the process explained to you.