Why must I cash in my pension when being made redundant

LakeThirlmereC

I have been made redundant from my main contract and voluntarily!!!! resigned from the other (both covid related). Two separate contracts one payroll provider. As I am over 55 I am being told by my LGPS provider that I MUST take my pension/money and stop the scheme. I want to keep the money in there and find another job. Why MUST I cease the pension before I want to. (which will result in losses to me). This does not equate with good planning for the future. Can anyone advise please. 

garmeg

LakeThirlmereC said:

I have been made redundant from my main contract and voluntarily!!!! resigned from the other (both covid related). Two separate contracts one payroll provider. As I am over 55 I am being told by my LGPS provider that I MUST take my pension/money and stop the scheme. I want to keep the money in there and find another job. Why MUST I cease the pension before I want to. (which will result in losses to me). This does not equate with good planning for the future. Can anyone advise please. 

Are these contracts less than 2 years in duration when they ended?

Brynsam

LakeThirlmereC said:

I have been made redundant from my main contract and voluntarily!!!! resigned from the other (both covid related). Two separate contracts one payroll provider. As I am over 55 I am being told by my LGPS provider that I MUST take my pension/money and stop the scheme. I want to keep the money in there and find another job. Why MUST I cease the pension before I want to. (which will result in losses to me). This does not equate with good planning for the future. Can anyone advise please. 

You can't go on contributing to the LGPS once you've left employment, because membership of the LGPS requires the employer to contribute as well as the member. If (and only if) you have under two years of LGPS pension scheme membership, you have two options under the rules of the scheme:

1. take a refund of your personal contributions (minus the tax relief you received on these) and you'd lose the benefit of employer contributions
2. transfer your LGPS pension benefits to another pension scheme. The amount you can transfer will take into account employer contributions as well as personal contributions. You don't have to do this immediately - you have up to five years to arrange a transfer.

More info: https://www.lgpsmember.org/tol/thinking-leaving-before.php

GunJack

some form of Compulsory Early Retirement?? This may be one for @Silvertabby

xylophone

As I am over 55 I am being told by my LGPS provider that I MUST take my pension/money and stop the scheme. 

How long have you been a member of the LGPS?

Brynsam

GunJack said:

some form of Compulsory Early Retirement?? This may be one for @Silvertabby

No such thing - a scheme member can't be made to take their pension early without their express agreement. But entirely agree, Silvertabby....where are you?!

Edit: apparently they can! I stand corrected, with thanks to Silvertabby.

Silvertabby

If you have only been made redundant from one of your posts, and have more than 2 years service/are over 55 then LGPS rules are that your pension must be paid.  Deferring or transferring out isn't an option.  As you are being made redundant, these benefits should (I say should tentatively because there are some odd things going on re redundancy benefits at the moment) be paid without any actuarial reduction for early payment, so I can see no benefit in deferring payment.

As regards your other post, if you voluntarily retired then you should be given the choice of taking your (much reduced for early payment) pension now, or deferring it.

It all really hinges on your pensionable service - more or less than 2 years.

dunstonh

Why MUST I cease the pension before I want to.

It is unclear from your post what you mean by cease.

Normally when someone leaves employment, you cease to be an active member. ie. you dont contribute to it any more and nor does the employer.      You are not told to take the commence the pension income.  The pension remains with the scheme in a deferred state.   You are not told to transfer it unless you have under 2 years service (transfer is one fo the two options given)

LakeThirlmereC

I've been in the LGPS more than two years, but part time hours - don't know if that's relevant or not. 

LakeThirlmereC

The post I voluntarily!! resigned from I'd been paying into the scheme for 4 yrs and the post I'm being made redundant from I'd been contributing just over 2yrs

Silvertabby

Then my earlier post applies.  

Other than that, as the LGPS is a defined benefit scheme, it is not possible to leave your employment but continue paying into the scheme.  This is because your membership of the pension fund is a benefit of your employment  -  and your eventual pension and both your and your employer's contributions are based on your salary.  So, no employment = no salary  = no contributions = no pension.