LGPS / NHS pension / public sector pension swan song

Mistermeaner

Seen a few posts regards the ability to variously 'transfer in'  / buy 'additional years'  in various pension schemes, on apparently very good terms vs what one might get on the open market in terms of annuities 

Just wondering how viable a strategy it may be for someone who's been dc private sector their whole career to seek out any old public sector role for a final swan song before retirement and put in Just enough service to be able to access the buy in options 

One could then use a portion of their dc pot to get a fixed escalating income on better than market terms to cover base expenses while keeping the remainder of their pot for flexi draw down ?

jamjar92

Not all LGPS schemes allow buy in now since the pension reform a few years ago.

GunJack

...and transfers-in usually have to be done within the first year of employment, or you've missed the boat...

Dox

Mistermeaner said:

Seen a few posts regards the ability to variously 'transfer in'  / buy 'additional years'  in various pension schemes, on apparently very good terms vs what one might get on the open market in terms of annuities 

Just wondering how viable a strategy it may be for someone who's been dc private sector their whole career to seek out any old public sector role for a final swan song before retirement and put in Just enough service to be able to access the buy in options 

One could then use a portion of their dc pot to get a fixed escalating income on better than market terms to cover base expenses while keeping the remainder of their pot for flexi draw down ?

You'd need to be able to get a job which offered access to a final salary public sector pension and it would need to be one which allowed transfers in and the terms offered would need to be suitably attractive.  So 'how viable' - well, depends if you could meet those criteria, especially getting a public sector job in the first place.

RetSol

Sounds like a question for @hugheskevi. 

Silvertabby

Mistermeaner said:

Seen a few posts regards the ability to variously 'transfer in'  / buy 'additional years'  in various pension schemes, on apparently very good terms vs what one might get on the open market in terms of annuities 

Just wondering how viable a strategy it may be for someone who's been dc private sector their whole career to seek out any old public sector role for a final swan song before retirement and put in Just enough service to be able to access the buy in options 

One could then use a portion of their dc pot to get a fixed escalating income on better than market terms to cover base expenses while keeping the remainder of their pot for flexi draw down ?

Theoretically possible, but unlikely in practice.  Apart from getting a job in the first place, not all employers now allow transfers in from DC/non club (club schemes typically being other public sector schemes) pension funds. 

Should make for an interesting exchange at interview:

Interviewer:  Why do you want this job?

Interviewee:  I want to scr*w the tax/council tax payers by transferring in a shed load of money into the LGPS in order to get an enhanced annuity. 

JoeCrystal

Silvertabby said:

Theoretically possible, but unlikely in practice.  Apart from getting a job in the first place, not all employers now allow transfers in from DC/non club (club schemes typically being other public sector schemes) pension funds. 

Should make for an interesting exchange at interview:

Interviewer:  Why do you want this job?

Interviewee:  I want to scr*w the tax/council tax payers by transferring in a shed load of money into the LGPS in order to get an enhanced annuity. 

  I agreed, the barrier is very high with getting the job in the first place. Not much around this end of the country for the likes of me, unfortunately, but still keeping an eye out though. 

hugheskevi

For the Civil Service pension scheme it should work for transfers into any of the Defined Benefit schemes, including the career average schemes. However, there are a few points to note:

• Transfers in are limited to 50% of salary (eg if salary is £20,000 p/a the maximum pension a transfer-in can buy is £10,000)
• Transfer has to be done in first 12 months of employment
• Transfer-in triggers preservation, ie, the usual rule that if you leave within 2 years of joining the scheme your pension contributions are refunded/transferred does not apply
  

None of the above should be problematic. However, in practice transfers-in can take a frustrating amount of time. Whilst in theory it is a straightforward process, the following needs to happen:

• The scheme administrator has to write to the ceding scheme to obtain a valuation of the amount being transferred (seriously antiquated in a world of online access and Defined Contribution pensions, but member-supplied information is not accepted)
• The scheme administrator then writes to you with a quote of how much the pension transfer will purchase
• You then write back to accept the quote
• The scheme administrator sends the necessary paperwork to the ceding scheme
• The ceding scheme makes the transfer
• The scheme administrator processes the transfer-in

Throughout the process neither scheme has any incentive to hurry or chase up a response, and the use of written material is a recipe for delays, lost paperwork and non-response. In practice you are likely to have to play the role of chivvying all parties to get things moving, and the process may well take months.

Nebulous2

Transferring from an LGPS in England to one in Scotland took me around 2 years. The current scheme wrote to the old scheme asking for figures and they weren’t forthcoming. I was approaching the year mark and concerned about the need to transfer in the first 12 months, so I emailed them. I received a very relaxed response saying, because I had asked for the figures within the first 12 months that was good enough. That turned out to be the case. 

I can only imagine transferring in from a private scheme would be worse. 

bigadaj

Nebulous2 said:

Transferring from an LGPS in England to one in Scotland took me around 2 years. The current scheme wrote to the old scheme asking for figures and they weren’t forthcoming. I was approaching the year mark and concerned about the need to transfer in the first 12 months, so I emailed them. I received a very relaxed response saying, because I had asked for the figures within the first 12 months that was good enough. That turned out to be the case. 

I can only imagine transferring in from a private scheme would be worse. 

What was the benefit of doing this rather than leaving the two presumably fairly similar schemes separate?

Silvertabby

bigadaj said:

Nebulous2 said:

Transferring from an LGPS in England to one in Scotland took me around 2 years. The current scheme wrote to the old scheme asking for figures and they weren’t forthcoming. I was approaching the year mark and concerned about the need to transfer in the first 12 months, so I emailed them. I received a very relaxed response saying, because I had asked for the figures within the first 12 months that was good enough. That turned out to be the case. 

I can only imagine transferring in from a private scheme would be worse. 

What was the benefit of doing this rather than leaving the two presumably fairly similar schemes separate?

Higher pensionable pay in the new post, which would then raise the value of the transferred in benefits?