Transfer existing pension into LGPS

davidncohen

Anyone with a view on this - comments most welcome.

I joined the LGPS scheme a few months back at a local authority, and now have the details of transfer rights from one of my existing pensions:

The transfer payment may purchase a service credit of 3 years and 72 days membership in the LGPS. Based on my current annual pensionable pay of £35592, the benefits would be:

- Annual retirement pension £1422.46
- Lump Sum Retiring Allowance £4267.38
- Annual Spouses's Pension £711.23

This pension details are as follows (I paid into it for about 2 years whilst at a large US UK based corporation):

Company -- Standard Life
Type of scheme -- Money purchase with no contracted out benefits
Date plan started -- 25-Dec-2000
Plan status -- Paid up
Contribution protection Benefit -- No
Guaranteed annuity rates -- No
Fund Management Charge -- 1% deducted daily
Total Transfer value (as at 30-Oct-07) -- £22, 626.31
Current funds (with total amount in fund)--

• Pension 2 Managed Fund (£17, 765.86)
• Pension 2 Cautious Managed Fund (£300.75)
• Pension 2 WIth Profits 2 (£4,386.84)

I recall that in the past their were penalties for transferring if you had invested in With Profits (up to 25% at one time I think), but I don't know if this is still the case).

If I access my pension on-line today these are the figures:

Current Transfer Value -- 21,458.51
What my plan might be worth if I retire at 65:

• Fund might be worth £35,100
• Could buy me a pension worth £1,380 pa
• Or I could take a tax free lump sum of £8,790
• My reduced pension would be £1,040 pa

I'm 51, and hoping to continue my career at my current local authorities.

All help appreciated.

Regards,

David

Mortgage_&_debt_free

I can only speak from experience. I moved from a private company to a local authority and my pension bought about 6 years.

I jumped at it because it's guaranteed and index linked and if you get promoted to a higher salary it's worth even more because it's based on your new salary, not what the original cash would have bought.

HTH

Andy_L

[quote=davidncohen;6915012

- Annual retirement pension £1422.46
- Lump Sum Retiring Allowance £4267.38
- Annual Spouses's Pension £711.23

This pension details are as follows (I paid into it for about 2 years whilst at a large US UK based corporation):


Current Transfer Value -- 21,458.51
What my plan might be worth if I retire at 65:

• Fund might be worth £35,100
• Could buy me a pension worth £1,380 pa
• Or I could take a tax free lump sum of £8,790
• My reduced pension would be £1,040 pa

[/quote]

Looks like a no brainer to transfer it. However:

You can probably take the money purchase pension now, whilst you are new enough to the LGPS to have to stay to 65
Public sector payrises are likely to be held below rpi for the next few years - negating much of the advantage of salary linking, though as M&DF says you still gain from promotion - how likely is that?