LGPS transfer in value?

Alexland

Hi,

I have applied for a new job which would give me access to the LGPS pension scheme. Am a bit bored in my current job and it looks interesting as a sideways move. I am aware you can transfer in existing pension(s) within the first 12 months but can't find any public information on what benefit this might give me.

Currently late 30s with over £250k spread across my SIPP and workplace DC pensions and I was thinking of transferring in around £125k. Any ideas what inflation linked annual income this might generate from their normal pension / SP age?

Alex

Silvertabby

Once you have been set up on the pensions systems (won't happen from day one, even though payroll will /should have started to take pension contributions) you can ask for a quote without committing yourself to the transfer.

Alexland

Yeah I was kinda hoping to get an idea in advance from someone that knows the formula they use or has recent comparable experience as it might sway me one way or another on taking this job.

Drp8713

It is pretty straightforward to work out.

Amount of transfer in / Pension Factor + (49/160 x spouses factor)

Factors here:

http://lgpslibrary.org/assets/actgui/ew/TransfersF20170309.pdf

You will want non club TVin factors for a normal pension age of 68 I assume.

Alexland

Thanks Drp,

If I am using those factors correctly transfering in £125k at age under 40 would give an inflation linked circa £15k per annum from age 68. Does that sound about right?

Alex

Drp8713

Yes that's it.

Alexland

Sounds fair but not overly generous compared to my anticipated investment performance.

Still it would be nice to have some guaranteed income and a bit less stock market exposure in the mix.

Silvertabby

There's more to a transfer in calculation than just the GAD tables but, assuming no previous LGPS membership or GMP then they'll give you a reasonable idea.

Remember that if you do transfer in, and then opt to take your benefits before your normal retirement age, then your transferred in benefits will also be subject to early payment reductions.

Dox

Alexland wrote: »

Sounds fair but not overly generous compared to my anticipated investment performance.

Still it would be nice to have some guaranteed income and a bit less stock market exposure in the mix.

Nice enough to motivate you to get out of bed and go to work on a freezing Monday morning to do a job you are clearly only lukewarm about? I think I'd want my rewards to be rather more imminent!

With 30 years or so of working life in front of you, maybe hold out for a job you think you'd really enjoy?

Alexland

I am more lukewarm about transferring the pension - the job looks interesting enough which is about as excited as I get about anything. Hopefully circa 20 years ahead if I can draw upon the ISAs and SIPP first.

A DB scheme seems a pretty good thing to have towards the end of your career as you get the same outcome for the same regular contribution regardless of age when your money otherwise wouldnt have much time to grow in a DC scheme.

Silvertabby

!!!8220; Sounds fair but not overly generous compared to my anticipated investment performance.

Still it would be nice to have some guaranteed income and a bit less stock market exposure in the mix.
Originally posted by Alexland

Sounds pretty generous to me - are you forgetting that the amount of pension you 'buy' is indexed linked (CPI) both before and after retirement?