LGPS - had my hours reduced

woolly_wombat

hyubh wrote: »

If it's a redundancy and new employment, then strictly speaking the employer should be providing leaver and new starter details to the pensions administrator. However, you need to (a) check this has been/will be the case (b) if not, request that it is (c) make clear your election to the administrator to have separate benefits.

Unfortunately, in my experience, academies don't have the Human Resources expertise that the Local Authority employers used to have, so you will have to make that election to have separate benefits for your previous and current employment very clear to the pension administrators. Phone them and make sure to follow it up in writing.

mozzy10

woolly_wombat wrote: »

The difficulty you face is that most of your pension is final-salary and now you have been down-graded which will, in time, reduce the value of your final-salary pension.

Hopefully a LGPS expert will be along shortly to advise whether it would be worth opting out of the LGPS then rejoining (but keep the previous membership separately deferred to retain your previous higher final-salary link).

Off-topic but why was your previous position made redundant and why is your new position lower grade?

.

I was made redundant to save the school money (massive debt).
They have rehired me back but have cut down the job description to lower the pay grade by 2 grades. It's nothing but a cost cuting exercise.

Yes, I was thinking if I can opt out and keep that final salary bit at my old salary, the rejoin in a couple of months as if it's a new pension pot - if that makes sense.


Thanks for all the replies so far :T

mozzy10

hyubh wrote: »

What Silvertabby and johndough say, in short:

• The claim that your final salary benefits, by default, are against a salary already calculated is incorrect. In fact, all public sector schemes when they went CARE maintained a final salary link for pre-CARE service.
• If it's a redundancy and new employment, then strictly speaking the employer should be providing leaver and new starter details to the pensions administrator. However, you need to (a) check this has been/will be the case (b) if not, request that it is (c) make clear your election to the administrator to have separate benefits.
• Going forward, you are just accruing 1/49th of a lower amount of actual pay as pension than you would have been. The terms of the pension in itself aren't less generous (in fact, if you aren't already in the lowest contribution band, you may actually end up paying less for proportionally the same benefit). The idea that this gives reason to opt out of the scheme is very silly - your work colleagues sound rather clueless on the matter. If the employer is an academy trust, it would make the directors' day to have you all opt out.

The school said it was classed as a continuation of service as I've agreed to stay in this new position.

woolly_wombat

mozzy10 wrote: »

I was made redundant to save the school money (massive debt).
They have rehired me back but have cut down the job description to lower the pay grade by 2 grades. It's nothing but a cost cuting exercise.

Sorry to hear that. Unfortunately it's a sign of the times.

A school governor friend tells me that things are very difficult now with funding cuts, and I'm aware that my previous job has had a couple of positions axed (science tech) which has left them struggling with workload.

[I think your best bet is to opt out for a month, making it very clear that you wish to keep the pension memberships separate, but others with greater expertise LGPS will hopefully confirm.] Not necessary, as long as you leave within 10 years years of being downgraded.

hyubh

mozzy10 wrote: »

The school said it was classed as a continuation of service as I've agreed to stay in this new position.

How long are you likely to remain employed by this rather crappy-sounding establishment? The relevant part of the 2008 scheme regulations (still applicable for calculating pre-2014 benefits) is section 10 of the benefit regs, which you can view here (looks a bit messy because this document is showing all the changes since it was originally passed into law):

http://lgpsregs.org/timelineregs/LGPS2008Regs/SI20140044/20071166.htm#reg10

In short, if you leave within 10 years of being regraded downwards, you have a right, at the point of leaving, to request from the scheme administrator that your final pensionable pay be calculated as the best 3-year average over the past 13 years. (Within this, the figures for individual years are uprated for inflation). Wilts LGPS have a good account here:

http://www.wiltshirepensionfund.org.uk/reductions-in-pensionable-pay.pdf

Doing this and not opting out and rejoining would potentially be the better option since you would otherwise lose out were you to be made redundant when 55 or over.

[Edited per Joe_Bloggs' point - thanks!]

Joe_Bloggs

In response to hyubh
who said:-

You don't say your age, but within the next 10 years it reaches 55, then doing this and not opting out and rejoining would be the better option since you would otherwise lose out were you to be made redundant when 55 or over.

Mozzy10 stated in the original post:-

I'm 45 and this is the only works pension I've ever paid into.

I hope Mozzy10 can find additional work, if not a new full time job. If you act like a doormat then you will be treated as one.
J_B.

mozzy10

Joe_Bloggs wrote: »

In response to hyubh
who said:-

Mozzy10 stated in the original post:-
I hope Mozzy10 can find additional work, if not a new full time job. If you act like a doormat then you will be treated as one.
J_B.

s In response to hyubh
who said:-
Quote:
You don't say your age, but within the next 10 years it reaches 55, then doing this and not opting out and rejoining would be the better option since you would otherwise lose out were you to be made redundant when 55 or over.

Um...... technically I turned 45 ......12 days after being made redundant.

What is the significance of being 55?


Ha ha Mr Bloggs - the reason I stayed on at this school was to have some form of regular income whilst using my newly found free time to set up my wedding photography and video business. But yes, I'm also looking for a better paid job somewhere else.

hyubh

mozzy10 wrote: »

technically I turned 45 ......12 days after being made redundant.

To be honest, I'm still not quite sure how 'being made redundant' squares with 'continuous service'. The academy HR person may be using the latter term because that's just what they are used to from when the academy got started - support staff like yourself, previously employed by the LEA, were TUPE'd to the academy trust, and for pension and other purposes, employment before and after counts as 'continuous service' (it's a specific term). However, this never involved being made redundant and immediately re-employed on different terms (indeed, that's what being TUPE'd precisely avoids).

It might be worth inquiring with the pension administrator (hopefully it's still in house, or if outsourced, only to another local authority?) - they will likely be used to the concept of HR people not quite understanding pensions.

What is the significance of being 55?

If you are an active member of the LGPS aged 55 or over and made redundant, then it's an automatic early retirement with the employer paying a 'strain charge' (additional capital sum) to the pension fund to prevent an actuarial reduction. In such a situation, if half your pensionable service was already preserved, then it would stay as it is however.

mozzy10

hyubh wrote: »

To be honest, I'm still not quite sure how 'being made redundant' squares with 'continuous service'. The academy HR person may be using the latter term because that's just what they are used to from when the academy got started - support staff like yourself, previously employed by the LEA, were TUPE'd to the academy trust, and for pension and other purposes, employment before and after counts as 'continuous service' (it's a specific term). However, this never involved being made redundant and immediately re-employed on different terms (indeed, that's what being TUPE'd precisely avoids).
It might be worth inquiring with the pension administrator (hopefully it's still in house, or if outsourced, only to another local authority?) - they will likely be used to the concept of HR people not quite understanding pensions.

Good point - I think I am the first "lucky" chump who has actually been rehired! Most others (there have been many) have just gone off to pastures new.

hyubh wrote: »

If you are an active member of the LGPS aged 55 or over and made redundant, then it's an automatic early retirement with the employer paying a 'strain charge' (additional capital sum) to the pension fund to prevent an actuarial reduction. In such a situation, if half your pensionable service was already preserved, then it would stay as it is however.

So it would be locked away and not payable straight away? I think I see now....

hyubh

mozzy10 wrote: »

So it would be locked away and not payable straight away?

No - without employer consent, you can draw a preserved LGPS pension early from 55. However, doing so would result in a heavy actuarial reduction for taking it so short of your normal pension age(s) in the scheme.