Huge mistake transferring Civil Service Pension

Kynthia

My husband has transferred his civil service pension into the LGPS and I think he's made a massive mistake costing a fortune. I don't think he intended to and ticked the wrong option as he was discussing only transferring the Alpha portion, which was an option.

He had 20 years in Classic before being moved into Alpha. So he was due to get his Classic pension from 60 years with a lump sum. His quote for the LGPS pension gives a similar reckonable service and annual pension, however I presume this is from 68 years with no lump sum. Therefore he has lost 8 years of payments and the lump sum?

I believe the reason this transfer is so detrimental is due to his new salary being 25% lower than his salary in the previous job.

I know I'm grasping at straws but is there any way to undo the transfer, either due to selecting the wrong option by mistake or due to how detrimental the transfer is? I don't think the quote was very clear what the implications snd how much worse off he would be. Can anything be done?

Any advice would be great as i just feel so sick at what has been lost.

JoeCrystal

Why do you think they say "get independent financial advice"? It is not an easy decision to take some time. Frankly, your husband can still access his pension from 60 or earlier, just actuarially reduced, so he hasn't lost any money. I was under the impression that the transfer can still buy the equivalent in the LGPS and on a preferential rate as well. So what does precisely the quote is saying? It may not be a huge mistake.

Nothing is stopping him from improving his pension in LGPS either.

Silvertabby

A club transfer aims to give roughly equal rights in the gaining scheme - but the quote says (or should say) that the scheme NRAs may not necessarily be the same.
Your husband has no automatic right to ask for the transfer to be reversed - but he could ask the question.  Note that both the CS and the LGPS would have to agree.
From memory, I've only known 2 transfers be reversed in 20 years - and they were both LGPS to LGPS.  

hyubh

He had 20 years in Classic before being moved into Alpha. So he was due to get his Classic pension from 60 years with a lump sum. His quote for the LGPS pension gives a similar reckonable service and annual pension, however I presume this is from 68 years with no lump sum. 

Will be LGPS 2008 terms, so NRA 65, no automatic lump sum, but an accrual rate of 1/60 not 1/80 (i.e. a 'similar' length of reckonable service would produce a greater annual pension). Also an LRF (actuarial increase) applied if taken after 65.

I believe the reason this transfer is so detrimental is due to his new salary being 25% lower than his salary in the previous job.

The service credit calculation from the CETV will have been done against the pay in the old job (standard Club terms), which is the preferential method for someone going up the career ladder with the move. So yes, retiring on a lower salary (after inflation, and whole-time equivalent if part time) would be a bad idea.

Kynthia

Thank you for your comments. Is it definitely from age 65 he'll get it? That's something at least.

I'm just so upset as his quote gives him less per annum than he was due to get from the PCSPS, plus he gets it 5 years later with no lump sum.

So he's lost £70k he would have got just between the ages of 60 and 65 (5 years of pension plus the £26k lump sum).

Any ideas if we are best going down the route that he accidentally ticked the wrong option on the box, as I thought he was just going to transfer the Alpha portion of his pension, or the fact he's selected an option that leaves him significantly worse off and no-one would do that knowingly?

Silvertabby

It's worth a try.  After all, if you don't ask then you definitely won't get.  Don't get your hopes up too much though...

Dox

Kynthia said:

Any ideas if we are best going down the route that he accidentally ticked the wrong option on the box, as I thought he was just going to transfer the Alpha portion of his pension, or the fact he's selected an option that leaves him significantly worse off and no-one would do that knowingly?

I'd go for the 'accidentally ticked' option, adding a comment along the lines of 'clearly [I] would not have intentionally chosen an option that would leave me significantly worse off'. Covers both bases - although as Silvertabby says, I wouldn't be too optimistic that the schemes will both agree. If they don't, you have no grounds for a formal complaint, I'm afraid.

eskbanker

Kynthia said:

I think he's made a massive mistake costing a fortune. I don't think he intended to and ticked the wrong option as he was discussing only transferring the Alpha portion, which was an option.

Kynthia said:

Any ideas if we are best going down the route that he accidentally ticked the wrong option on the box, as I thought he was just going to transfer the Alpha portion of his pension, or the fact he's selected an option that leaves him significantly worse off and no-one would do that knowingly?

Please don't take this the wrong way but you've made multiple references to what you thought he was wanting to do, what does he say about this?