LGPS (police)

lisyloo

Can someone explain how much LGPS is worth these days.
I am only a few years off retirement (if that is relevant) so would be joining late.
I currently get 6% employer contribution plus salary sacrifice with 0% employers nics.
I’ve looked at the site and it says 1/49th of pensionable salary. If I interepret that as 2% it doesn’t seem right so I’m probably misinterpreting that.
a rough idea of what it’s worth would be useful to know if it’s even worth applying for a poorly paid job

Dazed_and_C0nfused

lisyloo said:

Can someone explain how much LGPS is worth these days.
I am only a few years off retirement (if that is relevant) so would be joining late.
I currently get 6% employer contribution plus salary sacrifice with 0% employers nics.
I’ve looked at the site and it says 1/49th of pensionable salary. If I interepret that as 2% it doesn’t seem right so I’m probably misinterpreting that.
a rough idea of what it’s worth would be useful to know if it’s even worth applying for a poorly paid job

Why do you think 1/49th is wrong?

That is roughly between a couple of other large public sector schemes, NHS is 1/54th (1.85%) and the current civil service scheme is 1/43.1 (2.32%).

The basic principle is you contribute for a year, anything from 5.5% to 12.5% and get 2.04% back as a pension.  Most employees probably contribute 5.8%, 6.5% or 6.8%.

lisyloo

Dazed_and_C0nfused said:

Hlisyloo said:

Can someone explain how much LGPS is worth these days.
I am only a few years off retirement (if that is relevant) so would be joining late.
I currently get 6% employer contribution plus salary sacrifice with 0% employers nics.
I’ve looked at the site and it says 1/49th of pensionable salary. If I interepret that as 2% it doesn’t seem right so I’m probably misinterpreting that.
a rough idea of what it’s worth would be useful to know if it’s even worth applying for a poorly paid job

Why do you think 1/49th is wrong?

That is roughly between a couple of other large public sector schemes, NHS is 1/54th (1.85%) and the current civil service scheme is 1/43.1 (2.32%).

The basic principle is you contribute for a year and get 2.04% back.  Do you mean it costs you 6% (via salary sacrifice)?  That seems at the low end of the scale even before the potential tax and National Insurance benefit is considered.

I’m use to working with dc.
2.04% of salary seems very low hence my suspicion I’ve misunderstood something.

I mean my employer contributes 6% of salary (dc) if i match at least 6%. (I’m currently putting in 60% via Sal sac, so total 66%).

ZeroSum

Salary sacrifice isn't allowed in public sector. 

The accrual rate is 1/49th's of career average salary. 
So if you earned 49,000 for a single year, you come out with a £1,000 a year pension. Stay there for 2 years, you get £2,000 etc

The employer contributions are largely irrelevant as its defined benefit, but typically they're circa 20%
The employee contributions are below
https://www.lgpsmember.org/toj/thinking-joining-how.php

lisyloo

ZeroSum said:

Salary sacrifice isn't allowed in public sector. 

The accrual rate is 1/49th's of career average salary. 
What do you mean by 6% employer contributions? 
The employer contributions are largely irrelevant as its defined benefit, but typically they're circa 20%
The employee contributions are below
https://www.lgpsmember.org/toj/thinking-joining-how.php

6% of salary into dc means if I earn say £50k then my employer puts £3k into my personal pot. (I’m sure you knew that just making sure we’re talking about the same thing).

right so will it still be circa 20% if a few years off retirement and work for say 3 years?
the circa is really useful

Dazed_and_C0nfused

lisyloo said:

Dazed_and_C0nfused said:

Hlisyloo said:

Can someone explain how much LGPS is worth these days.
I am only a few years off retirement (if that is relevant) so would be joining late.
I currently get 6% employer contribution plus salary sacrifice with 0% employers nics.
I’ve looked at the site and it says 1/49th of pensionable salary. If I interepret that as 2% it doesn’t seem right so I’m probably misinterpreting that.
a rough idea of what it’s worth would be useful to know if it’s even worth applying for a poorly paid job

Why do you think 1/49th is wrong?

That is roughly between a couple of other large public sector schemes, NHS is 1/54th (1.85%) and the current civil service scheme is 1/43.1 (2.32%).

The basic principle is you contribute for a year and get 2.04% back.  Do you mean it costs you 6% (via salary sacrifice)?  That seems at the low end of the scale even before the potential tax and National Insurance benefit is considered.

I’m use to working with dc.
2.04% of salary seems very low hence my suspicion I’ve misunderstood something.

I mean my employer contributes 6% of salary (dc) if i match at least 6%. (I’m currently putting in 60% via Sal sac, so total 66%).

I think most people would see, realistically, 2.04% as on the generous side.

You are comparing apples and pears.  Let's say you are earning £35,000 in the LGPS scheme.

You will pay contributions of £2,275 but the net cost to you, after tax relief (net pay scheme), is only likely to be £1,820.  Or just shy of £152/month.

In return you have a pension of £714.28 

ZeroSum

lisyloo said:

ZeroSum said:

Salary sacrifice isn't allowed in public sector. 

The accrual rate is 1/49th's of career average salary. 
What do you mean by 6% employer contributions? 
The employer contributions are largely irrelevant as its defined benefit, but typically they're circa 20%
The employee contributions are below
https://www.lgpsmember.org/toj/thinking-joining-how.php

6% of salary into dc means if I earn say £50k then my employer puts £3k into my personal pot. (I’m sure you knew that just making sure we’re talking about the same thing).

right so will it still be circa 20% if a few years off retirement and work for say 3 years?
the circa is really useful

See edit above

Dazed_and_C0nfused

lisyloo said:

ZeroSum said:

Salary sacrifice isn't allowed in public sector. 

The accrual rate is 1/49th's of career average salary. 
What do you mean by 6% employer contributions? 
The employer contributions are largely irrelevant as its defined benefit, but typically they're circa 20%
The employee contributions are below
https://www.lgpsmember.org/toj/thinking-joining-how.php

6% of salary into dc means if I earn say £50k then my employer puts £3k into my personal pot. (I’m sure you knew that just making sure we’re talking about the same thing).

right so will it still be circa 20% if a few years off retirement and work for say 3 years?
the circa is really useful

What the employer contributes is of no real relevance to you though.  

You aren't building up a pension pot, the LGPS is a promise to pay the pension you accrue.

hyubh

Barny1979 said:

Local Authority Pensions are 1/80th so the Police is generous.

You might want to clarify that claim. 'Local Authority Pensions' are not '1/80ths'.

lisyloo

Dazed_and_C0nfused said:

lisyloo said:

ZeroSum said:

Salary sacrifice isn't allowed in public sector. 

The accrual rate is 1/49th's of career average salary. 
What do you mean by 6% employer contributions? 
The employer contributions are largely irrelevant as its defined benefit, but typically they're circa 20%
The employee contributions are below
https://www.lgpsmember.org/toj/thinking-joining-how.php

6% of salary into dc means if I earn say £50k then my employer puts £3k into my personal pot. (I’m sure you knew that just making sure we’re talking about the same thing).

right so will it still be circa 20% if a few years off retirement and work for say 3 years?
the circa is really useful

What the employer contributes is of no real relevance to you though.  

You aren't building up a pension pot, the LGPS is a promise to pay the pension you accrue.

I’m trying to compare a job with dc pension (current job) with a new proposed job with db pension.
That’s why I’m trying to convert db to dc so I can compare.
so to put numbers on it.

dc job = £50k salary + £3k employer contributions = £53k
db job = £38k salary + £7.6k pension equivalent - £2470 pension cost = £43130

does that look approx correct?

if it’s correct then the generous pension does not make up for the poor salary 

ZeroSum

Barny1979 said:

Local Authority Pensions are 1/60th so the Police is generous.

That was the old final salary scheme which changed a few years back. 
It's now 1/49ths CARE, with higher actuarial reductions as NRA is now linked to SPA rather than being 65