LGPS Pension Cash Transfer/Refund

PPiOS

Hi all,

I received a letter in May from the London Pension Fund Authority regarding my pension, as my contract was not renewed with my then employer (and I have remained unemployed since March for obvious reasons). I did not reach the 2-year point with my previous employer, so I have now been given the option to do a cash transfer to a different pension provider (including employer contributions), or a much smaller refund. I also appear to have the option to defer payment of the refund.

What is my best option here? I am unsure of my future employment during the current pandemic, should I defer this refund until I am enrolled on another scheme by my future employer, or am I better off finding a pension scheme myself? I am not sure if the refund including the employer contributions would transfer to a private pension for example. Am I better off contacting the sender of the letter?

Pensions in general are quite a foreign concept to me so I'm kind of going in blind here. I wasn't even aware of this sort of system for refunds until I received the letter.

Silvertabby

A transfer to another pension scheme will be a much better option for you.  You won't be able to leave your LGPS benefits frozen indefinitely - maximum of 5 years rings a bell , but check with LPFA in case they have opted for a shorter period.  That should give you enough time to sort out another pension fund (which doesn't have to be another DB fund and, yes, can be a private pension).

Note that you don't need to take independant financial advice in this case, but you will need to make it clear to your new pension provider that you don't have a deferred DB pension.    As you accrued less than 2 years pensionable service, you don't have any actual pension rights - just the options of a transfer or a refund of your own contributions.