What to do with very small LGPS pensions

Dragon_Lily

The smaller two LGPS pensions are with the same organisation, university. Jobs were admin roles.   The largest LGPS pension is with a city council. 

Silvertabby

Dragon_Lily said:

The smaller two LGPS pensions are with the same organisation, university. Jobs were admin roles.   The largest LGPS pension is with a city council. 

Then, if you take the CARE pension at 60, the two smaller pensions will be paid on the same payslip, just with different 'post' numbers.

The LGPS commutation rate of 1:12 isn't particularly attractive, but giving up some of these already small pensions in return for a larger tax free lump sum may be an option for you?  Nearer age 60 (you may have to ask for details of the CARE pension) you will be given two lots of figures for each pension - standard lump sum and pensions, and maximum lump sums and pensions.

xylophone

but you aren't eligible to accept that because your total LGPS benefits are over the £30K limit.

Would there be  any chance of getting it under the "special rules for occupational schemes"?

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

If you have small benefits in an occupational pension, it may be possible for you to cash them in under triviality rules, even if the main rules above have not been met.

Where the "main rules" include what you previously mentioned ie that

• You have to add all the benefit values of all company pensions/personal pensions/stakeholder pensions/retirement annuities/buy-out plans (but not any state pension) together. If they do not exceed £30,000 (before 27 March 2014 the limit was £18,000), trivial commutation may be a possibility.

Silvertabby

xylophone said:

but you aren't eligible to accept that because your total LGPS benefits are over the £30K limit.

Would there be  any chance of getting it under the "special rules for occupational schemes"?

https://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/Taking_small_pensions_Detailed_SPOT008_V1.5.pdf

If you have small benefits in an occupational pension, it may be possible for you to cash them in under triviality rules, even if the main rules above have not been met.

Where the "main rules" include what you previously mentioned ie that

• You have to add all the benefit values of all company pensions/personal pensions/stakeholder pensions/retirement annuities/buy-out plans (but not any state pension) together. If they do not exceed £30,000 (before 27 March 2014 the limit was £18,000), trivial commutation may be a possibility.

Not in this case, unfortunately.  The LGPS £10K de minimas (small pot) regs specify that the combined value of all LGPS benefits (even if held by different local authorities)  must be under the limit. 

OP's main LGPS pension is £4K per year plus £12K lump sum, so she's way over both the £10K and £30K limits.

Dragon_Lily

Just to update.  I've checked with the LGPS provider and I can take all 3 pensions at 60. (I got a CETV quotes for the 2 smaller pensions just to see what it was and the total was just over £7,000.)   One of the smaller pensions which was payable at 65 would be reduced if I take it at 60 yrs. So, this is what I plan to do. 
Thanks a lot for your help.

Silvertabby

Dragon_Lily said:

Just to update.  I've checked with the LGPS provider and I can take all 3 pensions at 60. (I got a CETV quotes for the 2 smaller pensions just to see what it was and the total was just over £7,000.)   One of the smaller pensions which was payable at 65 would be reduced if I take it at 60 yrs. So, this is what I plan to do. 
Thanks a lot for your help.

As I understand it, you have 2 small records with one LGPS and a larger record with another LGPS.

When you asked for a CETV in respect of the 2 small records, did you tell the administrator that you have another record with another employer that you intend to take as LGPS benefits?

Also, the total CETV of just over £7,000 may sound a lot, but it really isn't when you consider what you would be giving up.

Record 1 = £73 per annum pension plus £220 lump sum from age 60.

Record 2 = £400 per annum pension from SPA.  Roughly £300 per annum from age 60.

Taking the lump sum into account, that's a multiple of just X20.  Very poor, but not unusual for the LGPS (as transfer factors are set by GAD).