Transferring Pension Trust Pension to LGPS

mckln335

Hi,

I was paying into a DC scheme (5% Employee, 5% Employer) with my previous employer and as it stands I have a value of £23,457.54 in my retirement account. I have recently started a new job with the local authority and have joined the LGPS pension scheme. I have been given a quote to transfer my previous pension in, giving a potential pension of £3068 per annum and a contingent spouse's pension of £939 per annum. Should I transfer?

Brynsam

There isn't a yes/no answer here. Looking at the figures quoted by LGPS, I would guess you are pretty young, so your DC scheme will have quite a time to grow - but the chances of it growing enough to beat the promise of a guaranteed pension...who knows?

Linton

As Brynsam implies, it is impossible to say how good the deal is without knowing your age. If you are near retirement age the deal would be unbelievably generous. One factor you may wish to consider is that a separate DC pension would provide more flexibility. For example it would make it easier to retire early as it can currently be taken at 55 whereas taking your DB pension early could result in a significant reduction.

mckln335

Unfortunately I am nowhere near retirement age, I am 30. 😣

JoeCrystal

Are you planning to keep contributing into your DC pension scheme? If not, then I would go for LGPS because you can always open your own private personal pension and contribute to it. To get an index-linked annuity at 68 would require you to contribute £270 every month for the next 48 years if you are lucky with the return and market condition. If you are planning to contribute into your DC pension scheme, how much are you planning to contribute?

mckln335

Hi Joe,

As far as I can see from the paperwork, I have left the scheme so can no longer contribute. Besides if I did, then my previous employer would obviously no longer be contributing. The only advantage I can see is that I could potentially draw on the National Pension Trust pension at 65 as opposed to 68. A guaranteed £3000 a year from the LGPS seems a better deal to me?

OldBeanz

We cannot give advice on here but I do not think anyone would disagree. You need to look at contributing to an LGPS AVC which you can draw tax free when you draw your pension.