LGPS AVC Question

marycanary

Hi,

I work in local government and have two separate pensions in the LGPS. One deferred from previous employment and one with my current employer.  BTW, not combining has worked well for me so far as I took a pay cut to move to a more enjoyable job in a cheaper part of the country.

I pay into Prudential AVC associated with the current pension and may take them as a tax free lump sum. To calculate the maximum amount of lump sum payable free of tax is the combination of both pensions used or just the one associated with the AVC?

Thank you in advance.
mc

Silvertabby

If your pensions are with 2 LGPSs, then only your current benefits calculation will include your AVC.

marycanary

Thank you for getting back to me so quickly. I'm very glad I checked, I might have to rethink.  If I have reached maximum tax free lump sum, I wonder if I should open a SIPP to use up my Annual Allowance (earnings permitting) rather than add more AVC.

Silvertabby

You could use your surplus AVC to buy additional pension in the LGPS.  The factors are far more favourable than an open market annuity.

marycanary

That is certainly one option to add to the mix. Am I right in thinking the cost of buying a pension using AVC varies and you have to obtain a personal quote?

Silvertabby

Yes.  It's not something you will be able to do yourself - the figures will be included in your retirement options quote once your retirement date has been confirmed.

OldBeanz

Silvertabby said:

Yes.  It's not something you will be able to do yourself - the figures will be included in your retirement options quote once your retirement date has been confirmed.

How likely is it to vary from the LGPS calculator?
https://www.lgpsmember.org/more/apc/extra.php?

Silvertabby

OldBeanz said:

Silvertabby said:

Yes.  It's not something you will be able to do yourself - the figures will be included in your retirement options quote once your retirement date has been confirmed.

How likely is it to vary from the LGPS calculator?
https://www.lgpsmember.org/more/apc/extra.php?

That's for buying APCs either as a lump sum or in instalments prior to retirement.  Not to confused with buying an LGPS annuity with AVC funds, as they are two separate things.

OldBeanz

Silvertabby said:

OldBeanz said:

Silvertabby said:

Yes.  It's not something you will be able to do yourself - the figures will be included in your retirement options quote once your retirement date has been confirmed.

How likely is it to vary from the LGPS calculator?
https://www.lgpsmember.org/more/apc/extra.php?

That's for buying APCs either as a lump sum or in instalments prior to retirement.  Not to confused with buying an LGPS annuity with AVC funds, as they are two separate things.

OK but presume they are of not dissimilar value or cost to the LGPS?
Wife is in the position of overshooting her AVC or buying extra pension so just trying to establish which makes the more sense. She will be drawing pension at 62.5 rather than 67.

Silvertabby

OldBeanz said:

Silvertabby said:

OldBeanz said:

Silvertabby said:

Yes.  It's not something you will be able to do yourself - the figures will be included in your retirement options quote once your retirement date has been confirmed.

How likely is it to vary from the LGPS calculator?
https://www.lgpsmember.org/more/apc/extra.php?

That's for buying APCs either as a lump sum or in instalments prior to retirement.  Not to confused with buying an LGPS annuity with AVC funds, as they are two separate things.

OK but presume they are of not dissimilar value or cost to the LGPS?
Wife is in the position of overshooting her AVC or buying extra pension so just trying to establish which makes the more sense. She will be drawing pension at 62.5 rather than 67.

Different factors are used, with age being a major contributor  in both - so using the APC calculator now could give a very misleading figure.  Plus APC taken at 62.5 would be reduced for early payment, whereas AVC annuity then would just be calculated on age.

OldBeanz

Silvertabby said:

OldBeanz said:

Silvertabby said:

OldBeanz said:

Silvertabby said:

Yes.  It's not something you will be able to do yourself - the figures will be included in your retirement options quote once your retirement date has been confirmed.

How likely is it to vary from the LGPS calculator?
https://www.lgpsmember.org/more/apc/extra.php?

That's for buying APCs either as a lump sum or in instalments prior to retirement.  Not to confused with buying an LGPS annuity with AVC funds, as they are two separate things.

OK but presume they are of not dissimilar value or cost to the LGPS?
Wife is in the position of overshooting her AVC or buying extra pension so just trying to establish which makes the more sense. She will be drawing pension at 62.5 rather than 67.

Different factors are used, with age being a major contributor  in both - so using the APC calculator now could give a very misleading figure.  Plus APC taken at 62.5 would be reduced for early payment, whereas AVC annuity then would just be calculated on age.

I guess it is those different factors that I want to know. I don't imagine it would make a great difference either way and the factors lay buried within the LGPS labyrinth.