Lgps experts

OldBeanz

chiefie wrote: »

Thanks - the scheme rules suggest not but I can't rule out they haven't updated things - at least that's what I am forlornly hoping :j
Darn it !

You are not the first to suggest this so it may be a MSE urban myth that this was stopped or has been suggested that each local authority has a different policy.

chiefie

Thanks everyone for your responses I will post when I have the answer ��

Apodemus

Silvertabby wrote: »

...The remaining £5K AVC can't be taken as cash, only as a pension of some description (depends on when you started to pay into the AVC fund).

This surprised me! I don't have any AVCs but colleagues do and I always assumed these were treated like a DC scheme and could be taken as cash at retiral.

k6chris

Can you transfer 'excess' AVCs (over the 25% TFLS limit) to a private SIPP, prior to triggering retirement, rather than being forces to use them to buy annuity / LGPS top up??

finallyretired

This included some proposals re AVC's, but I'm not sure if/when any changes were/are to be made.

Google gov.uk/government/consultations/local-government-pension-scheme-regulations

The proposed changes were:

AVCs – the member will (in broad terms) be given the choice of applying any AVCs under the LGPS to provide any of the following forms of benefit: a pension commencement lump sum; one or more uncrystallised funds pension lump sums; annuity purchase from an external provider; or purchase of additional pension under the LGPS. Alternatively, the member can opt to transfer the AVCs out to another registered pension scheme (eg. to take advantage of flexi-access drawdown)

System

Hi

I did have the OMO (Open Market Option) back in 2011 for my AVC, but stuck with the LGPS as my personal choice.

Silvertabby

“ ...The remaining £5K AVC can't be taken as cash, only as a pension of some description (depends on when you started to pay into the AVC fund).
Originally posted by Silvertabby ”
This surprised me! I don't have any AVCs but colleagues do and I always assumed these were treated like a DC scheme and could be taken as cash at retiral. Posted by Apodemus

It depends on the scheme rules and if the AVCs are -in-house'

I did have the OMO (Open Market Option) back in 2011 for my AVC, but stuck with the LGPS as my personal choice. Posted by johndough

This was before the 'pension freedoms', but I've only ever known 1 person opt for the open market option for the residual value (ie, surplus to cash) of their LGPS in-house AVC. It was such an unusual choice, I rang them to confirm that they'd ticked the right box. Seems they'd seen the TV adverts claiming that "You will get more for your pension on the open market" They hadn't even asked for a quote - and when they did, no-one was interested in the <£10K transfer value. Luckily, we had enough time to unpick this one and revert to the LGPS.

We would ask our in-house AVC provider to supply their own annuity figures to the retiring scheme member, so they could compare them to the LGPS service purchase or annuity quote. The differences in figures were really quite alarming - in many cases the AVC providers annuity quotes were only 2/3rds of the LGPS quotes.

AlanP_2

Thanks for this thread, it has prompted me to make further enquiries with the administrators of my LGPS scheme.

When I asked previously got told no, any new Post 2014 AVC can only be used as 25% tax free and then the other 75% Annuity or purchase more LGPS.

Followed the link to main LGPS site as given above and then checked through the scheme booklets on our local LGPS site.

Booklet indicates you can take 100% of it as TFLS:

Take your AVCs as cash

You can take some or all of your AVC fund as a tax-free cash lump sum but you can only take it all as a lump sum if you draw it at the same time as your main LGPS benefits and provided, when added to your LGPS lump sum, it does not exceed 25% of the overall value of your LGPS benefits (including your AVC fund).


The Brief Scheme Guide is even more explicit:

Taking AVCs as cash

If you pay Additional Voluntary Contributions (AVCs) via the LGPS you may elect to take all of your AVC fund as a tax-free lump sum if you draw it at the same time as your main LGPS benefits provided, when added to your LGPS lump sum, it does not exceed 25% of the overall value of your LGPS benefits (including your AVC fund) and the total lump sum doesn’t exceed £250,000 (2016/17 figure) less the value of any other pension rights you have in payment.


Employer's Pension department have passed the question over to Scheme Administrators.

PensionTech

Can you transfer 'excess' AVCs (over the 25% TFLS limit) to a private SIPP, prior to triggering retirement, rather than being forces to use them to buy annuity / LGPS top up??

Probably not, by the looks of it. You don't have a statutory right to do this because the statutory right to transfer DC benefits (like AVCs) applies to all of the benefits at once - i.e. you wouldn't be able to take some AVCs as a PCLS and the rest as a transfer. Schemes may allow partial transfers, but the LGA has indicated (in its response to the consultation mentioned by finallyretired above, which the government has yet to respond to) that it doesn't want to offer partial transfers. However, you may be able to take the "excess" AVCs as a one-off "uncrystallised funds pension lump sum" (of which 25% is tax-free and 75% is taxed as income) prior to retirement so that the remaining AVCs are small enough to be taken fully as a PCLS, subject to the eventual implementation of and amendments to the consultation.