Should I Merge two pots from the same provider?

claire1a

Hey all, had a search on the forum but I can’t see anything that includes two pensions from the same provider.

so I have two pots, from different jobs (different local councils) who use the same pension scheme. One pot is 2007-2017 which is a final salary pension (I left on a higher wage then I am on now) the other pension is the normal one. 

I have recieved a letter saying I have three months to decide whether to merge these together or keep them separate with a load of jargon about the differences which I can’t work out. So as I know everyone has an amazing knowledge on here I thought I’d seek help! 

What am I best doing?? Keep separate or merge? 

Happyto add more detail if needed and thank you in advance of any support! 

xylophone

https://forums.moneysavingexpert.com/profile/Silvertabby
Is a retired LGPS administrator - try a pm?

Albermarle

Normally a final salary scheme and a 'normal' ( DC ) scheme are completely different and not possible to 'merge' them.
So must be a special case.

AlanP_2

The "normal one" might refer to the CARE pension currently on offer through the LGPS as opposed to the pure final salary scheme which moved to CARE in 2014.

OP - Merging decisions can be complicated and affected by age, length of service, salary comparisons, salary expectations in new role etc. etc. so I would expect more detail to be needed.

As suggested @Silvertabby will hopefuly be along soon to provide guidance and comment.

xylophone

will hopefuly be along soon to provide guidance and comment.

Some previous
https://forums.moneysavingexpert.com/discussion/5719184/should-i-combine-final-salary-lgps-with-current-lgps
https://forums.moneysavingexpert.com/discussion/5913009/should-i-combine-local-government-pension-scheme-pots

Silvertabby

Joined after 2006, so no Rule of 85 protections to consider.

Less than 5 years between leaving/rejoining, so merging would mean that the final salary link in respect of pre 2014 benefits is kept - but OP says that her old salary was higher.  OP - were/both of your posts full time?  If your old post was full time, and your new post is part time, then you need to compare the whole time equivalent salary for your new post with the old.

It used to be that (subject to employer discretions) separate LGPS records could be left until retirement and then the administrator would do what was best for the employee.  However, those days are gone and now the employee has to make a decision within a very short time scale.

Unfortunately, without a crystal ball, it really is impossible to say what would be the best decision now. 

Receive several promotions/pay increases in the new role?  Combine.

Stay in same job on same pay scale?  Don't combine.

Be made redundant after age 55? Combine.

Leave on ill health at any age?  Probably little difference, assuming that both records are with the same employer.  If different employers, then 2 lots of ill health procedures.  

claire1a

So definitely more information needed sorry! 

So I am 35. My old employer was a council, full time and I left in 2017. Contributions were 6.5% matched. This was final salary as silver tabby said and then CARE from 2014. 
new employer is another council (neighbouring council so use Same pension provider), this job is also full time, pension is CARE: 6.5% matched and I have been here just over 2 years (I have a gap of 1 year as I was at uni).

i finished on 27k in old job (prob on £25k in 2013) and am now on 23k with little movement to increase except maybe go upto 26k (local authorities hate to pay rise) as there are no increments and it’s hard to jump a payscale. 

Not sure whether this is enough info but let me know if you need anymore! I was just taken aback as they said they would automatically merge in 3 months if I don’t choose and contact them to keep separate.

in some ways I think we’ll merge as I still probably have 30 years before retirement but at the same time I do t want to mess up with my money! 

Thank you all for your responses so far! Will have a look at those articles xylophone

claire1a

I’ve also just seen that my pre 2014 wage will be on the final salary scheme even if they merge so does that mean that my final salary at 65 will be the final salary for that portion as hopefully I might be earning 30k+ by then... my mind is swimming at the moment! 

claire1a

Sorry yet another post because now I’m thinking what happens if I go part time towards retirement and am only on 15k and that will be my final salary... I’m better off keeping them separate... I can’t see me being the director of a company and earning mega bucks towards the end of my working life (and if I am then I’ll be earning and saving loads so any money I loose I will gain but really can’t see that happening), more I will go part time and become a recluse with 12 cats lol (currently on two so I’m building up my clan)

claire1a

Last post for tonight I promise! (Can you tell I have anxiety lol) so just reread my deferred benefits statement. It says on her my final salary pay is £14k (not sure how that’s worked out as I was on more than that in 2013/2014) and my annual final salary pension would just be £1500. 

My care pension at date of leaving was £1318. 

So my annual pension at date of leaving is £2811...

does this change things as that’s pretty low lol

Silvertabby

claire1a said:

I’ve also just seen that my pre 2014 wage will be on the final salary scheme even if they merge so does that mean that my final salary at 65 will be the final salary for that portion as hopefully I might be earning 30k+ by then... my mind is swimming at the moment! 

Yes, but £30K + at 65 will probably still be less than £27K plus 30 years of cost of living increases.

If you leave your earlier benefits preserved they won't stagnate - they will increase by CPI each April.