SIPPS ,the LGPS and other questions

Retire2021

Thanks @mark55man and @Dazed_and_C0nfused.
The emolument  (£8,000) started on 1st June 2020 and will end 1st March 2021.  We were planning on retiring on 1st September, but if it makes more sense then 1st June is also a possibility (indeed whatever is the best date)

Silvertabby

Final pensionable pay:

It depends on your temporary contract.  From what you have said, likely that you will be able to use the best of your last 3 years, but do check with your HR before making your decision to retire.

R85:

Deferred membership counts as well, so if you were to retire at 55 then defer payment of your benefits until 60, then you would have X years of actual service plus 5 years deferred membership in respect of your R85 entitlement. (Pre 2008 benefits only). 

Retire2021

Thanks @Silvertabby, I will ask tomorrow and see what they say about the final pay.

Also, I am pretty sure that I would gain little from the R85
On my LGPS statement it says 
Less early retirement reduction on pre 01/04/2008 service (16.8612 %) £1132.67
so, if I waited until I was 60 I guess my pension would increase by less than £1132.67 since that is the current reduction at 55+ not the reduction at 60 (or is there no reduction at 60 because of the R85 ? Does the statement take this into account ?).
I know pensions are not simple, but the statements make it very difficult to understand anything 

Silvertabby

Retire2021 said:

Thanks @Silvertabby, I will ask tomorrow and see what they say about the final pay.

Also, I am pretty sure that I would gain little from the R85
On my LGPS statement it says 
Less early retirement reduction on pre 01/04/2008 service (16.8612 %) £1132.67
so, if I waited until I was 60 I guess my pension would increase by less than £1132.67 since that is the current reduction at 55+ not the reduction at 60 (or is there no reduction at 60 because of the R85 ? Does the statement take this into account ?).
I know pensions are not simple, but the statements make it very difficult to understand anything 

Even though the rules changed recently to allow access to benefits (without need for employer's consent) from age 55, the minimum retirement age in respect of R85 protections remains 60.  If you defer payment until 60, then it will depend on your actual age and membership (both service and deferred). 

Retire2021

@Silvertabby - thanks

Its_all_a_mystery_to_me

No way am I an expert in LGPS, however I took my pension last August at 55 and did quite a bit of research for myself.  The first point I would make is that I do not believe the rule of 85 applies, my understanding is that it only applies if you will be aged 60 between 1 April 2016 and 31 March 2020 and meet the 85 year rule by 31 March 2020.
Secondly I would think that whilst your acting up applies to your pension, remember that for the period from 2014 the Pension is Career Average not Final Salary Pension so this would only increase the average by 1/7th (one out of 7 years). 

Silvertabby

Its_all_a_mystery_to_me said:

No way am I an expert in LGPS, however I took my pension last August at 55 and did quite a bit of research for myself.  The first point I would make is that I do not believe the rule of 85 applies, my understanding is that it only applies if you will be aged 60 between 1 April 2016 and 31 March 2020 and meet the 85 year rule by 31 March 2020.
Secondly I would think that whilst your acting up applies to your pension, remember that for the period from 2014 the Pension is Career Average not Final Salary Pension so this would only increase the average by 1/7th (one out of 7 years). 

That is indeed part of the R85 transitional arrangements.  However, someone younger could still have R85 protections in respect of their pre 2008 service. Note that even though the minimum access age (without employer consent) was recently lowered to 55, R85 is still linked to the old rules age 60.  

The LGPS retained the final salary link on the change to CARE, so the final year's (old rules) pensionable pay is used in the calculation of pre 2014 benefits.

Retire2021

Thank you for everyone, this is all very helpful 
This is an LGPS specific question, so perhaps @Silvertabby may be able to shed some light on it, although it may be unanswerable - but anyway here goes:
I can buy a top-up pension using my AVCs when I take my main pension, but LGPS won't really tell me the amount until I give them a retirement date and I cannot do that until I know how much pension I may get (checkens and eggs ). However, I found the extra pension calculator for LGPS (https://www.lgpsmember.org/more/apc/extra.php? ) , which calculates how much extra pension you can buy while still an active member. If, say, £50,000 will buy me £3,000 pa of extra pension at SPA can I ;
1) Assume that the actuarial reduction for taking this early is the same as the actuarial reduction for the CARE part of my LGPS pension (around 4-5% per annum)
2) That this amount is broadly similar to the amount that the AVC would buy me in a top-up pension scenario ?

OldBeanz

Retire2021 said:

Thank you for everyone, this is all very helpful 
This is an LGPS specific question, so perhaps @Silvertabby may be able to shed some light on it, although it may be unanswerable - but anyway here goes:
I can buy a top-up pension using my AVCs when I take my main pension, but LGPS won't really tell me the amount until I give them a retirement date and I cannot do that until I know how much pension I may get (checkens and eggs ). However, I found the extra pension calculator for LGPS (https://www.lgpsmember.org/more/apc/extra.php? ) , which calculates how much extra pension you can buy while still an active member. If, say, £50,000 will buy me £3,000 pa of extra pension at SPA can I ;
1) Assume that the actuarial reduction for taking this early is the same as the actuarial reduction for the CARE part of my LGPS pension (around 4-5% per annum)
2) That this amount is broadly similar to the amount that the AVC would buy me in a top-up pension scenario ?

I asked the same question within the last month and the reply was that they do not publish the equivalent of the 'extra pension calculator' for AVC overspill as it was too different. You can understand they do not want to confuse things by having 2 calculators. Given that there is no other basis to guesstimate the outcome then I have used the calculator again given that the wife is going early. You have to allow for tax relief either having been added or not. Time will tell how far off the figures are.

Silvertabby

Retire2021 said:

Thank you for everyone, this is all very helpful 
This is an LGPS specific question, so perhaps @Silvertabby may be able to shed some light on it, although it may be unanswerable - but anyway here goes:
I can buy a top-up pension using my AVCs when I take my main pension, but LGPS won't really tell me the amount until I give them a retirement date and I cannot do that until I know how much pension I may get (checkens and eggs ). However, I found the extra pension calculator for LGPS (https://www.lgpsmember.org/more/apc/extra.php? ) , which calculates how much extra pension you can buy while still an active member. If, say, £50,000 will buy me £3,000 pa of extra pension at SPA can I ;
1) Assume that the actuarial reduction for taking this early is the same as the actuarial reduction for the CARE part of my LGPS pension (around 4-5% per annum)
2) That this amount is broadly similar to the amount that the AVC would buy me in a top-up pension scenario ?

If it is, it will be coincidence, because APCs and annuity purchase from AVC funds have different factors and are calculated in different ways.

Your LGPS MAY give you an estimate 6 months before the date you tell them you want to retire (you won't be committed to that date unless/until you tender your actual resignation) but it really depends on their covid work load.

Don't panic at my use of the term 'annuity'.  That is what they are called, but don't confuse them with normal open market annuities because the LGPS factors are much more generous.

I used to see the annuity quotes offered by the Pru - and the LGPS quotes were always much higher (at least twice).