Pension reform - NHS & local government

trepxe

Hi

I'm wondering if anyone would know if the recent changes to the NHS & local government pension schemes where the discrimination ruling has allowed year from 2015 to 2022 to be returned into the scheme you were in would have affected a cash equivelent transfer value for a pension that has now been transfered out of the scheme please.
I have been trying to find out, but everything seems to be a bit of a closed shop when asking the question with my previous local government scheme.

Any thoughts much appreciated x

Silvertabby

trepxe said:

Hi

I'm wondering if anyone would know if the recent changes to the NHS & local government pension schemes where the discrimination ruling has allowed year from 2015 to 2022 to be returned into the scheme you were in would have affected a cash equivelent transfer value for a pension that has now been transfered out of the scheme please.
I have been trying to find out, but everything seems to be a bit of a closed shop when asking the question with my previous local government scheme.

Any thoughts much appreciated x

Nothing announced yet.  When did you leave?  In view of the much higher accrual rate from 2014 (and the retention of the final salary link in respect of your pre 2014 service) it's quite likely that your transfer valuation won't change.

trepxe

Thank you for your reply. It was in 2018. The options to go back into the previous scheme for currently employed members of the pension scheme has been agreed up until 31/03/22 & from that point everyone will be in the new scheme.  Being money savvy when it comes to wanting to retire & enjoy retirement I want to be sure I haven't lost out. 

Silvertabby

Don't know what the figures are like now, but certainly in the first 2 years from 2014 to 2016 99% of retirees who were entitled to an underpin calculation (ie, we calculated benefits using both old and new rules and paid the higher) were better off in the new scheme because of the higher accrual rate (1/49th instead of 1/60th).

Even taking any reduction in the early payment factors for post 2014 benefits into account, unless you had a whopping great pay rise in your last 4 years then it's likely that any re-calculation won't give you a higher amount.

jamjar92

My rough calculations I will be better as they are now, retiring at 60 that is before adding cpi but factoring early retirement reductions on both FS and CARE schemes elements.

Silvertabby

CARE pensions aren't always the bad things people think (ooh - it's new, so it must be worse!).

Using extreme examples, the person who started out as an apprentice and ended up retiring as CEO will probably be better off with a final salary pension.  But someone who is content to pootle along in the same job/on the same pay grade for all of their working lives will be much better off with CARE, due to the increased accrual rate and annual revaluations.

Most people will fall somewhere in the middle.

One good thing about the switch to CARE is that it will eventually put paid to the trick of over promoting someone in their last year of service, simply to inflate their final salary pension.

jamjar92

Silvertabby said:

One good thing about the switch to CARE is that it will eventually put paid to the trick of over promoting someone in their last year of service, simply to inflate their final salary pension.

People still get away with that? Only changes happens in our section is a restructure that take a while, I ended up on the same salary with additional duties.

Silvertabby

jamjar92 said:

Silvertabby said:

One good thing about the switch to CARE is that it will eventually put paid to the trick of over promoting someone in their last year of service, simply to inflate their final salary pension.

People still get away with that? Only changes happens in our section is a restructure that take a while, I ended up on the same salary with additional duties.

To a certain extent, yes.  The LGPS still has the final salary link in respect of pre 2014 service, and I believe other public sector schemes have similar rules.