Transfer DC to LGPS?

pensionpotpal

Hi,

Hoping someone can advise on the following...

I was in a local government defined benefits scheme from 2001 until my employer withdrew from it in 2018 when the pot was closed.  I then had an alternative employer provided defined contribution scheme until I changed employer last month and now I’m back in a different local government defined benefits scheme.  My intention is to stay with my current employer until I retire, I’m currently 42 and there’s around £1k a month (total) going into my new DB pension.

I had a independent pension review in 2018 and the FA advised to leave my LGPS alone as that covers my retirement from state pensionable age (68) for the rest of my life, it actually gives me £4k a year more than I had planned so I may decide to take that pension 4 years earlier than state pension age.  The DC pension I have currently has £31k in it.  I’d like to retire at 55 with between £17>20k a year payout from my pensions so there’s potentially a 9 year gap (55 > 64) to cover from my current pension and my DC pension.  At the point I had the pension review I didn’t know I’d be leaving that employer, so given the current situation and my plans do I just leave everything alone? Should I be looking to transfer the £31k from my DC pension into my current local government DB pension? Or look at linking my original DB pension with my current one?

I’ve no idea what is best to do, or even where to start figuring it all out.  Can I do what I’m thinking with my DC and current DB schemes in that I want to use those pots to cover me between 55 > 64 years old?

Thanks for any advice

Dazed_and_C0nfused

now I’m back in a different local government defined benefits scheme.  My intention is to stay with my current employer until I retire, I’m currently 42 and there’s around £1k a month (total) going into my new DB pension.

If you are in a DB scheme the amount you and your employer contribute isn't really all that relevant.  

The scheme rules will specify what you will accrue, typically based on service and pensionable pay each year.

For example you may be earning say £35k and personally contribute £2,275 in a year (pre tax relief) and that would entitle you to a pension of £714.

Also, because of your age you are likely to find that some pensions are no longer accessable until you reach 57 so an ISA may need to be part of your plan if you want to stick with 55 and need some income for the period until you can access your pension(s).

https://www.gov.uk/government/consultations/increasing-the-normal-minimum-pension-age-consultation-on-implementation

jamjar92

Your pre 2014 LGPS, NPA is 65, you could take that earlier, the statement will show an NRA, so need to factor in  reduction factors.

You will also have an option to merge it with currently LGPS, as within 5 years but this will be into the new CARE system.

I would leave the DC as is to give you flexiblity at retirement. You have of course the ability grow a TFLS via AVC's if you wanted to add to the old TFLS you have or start again if you merged.

AlanP_2

@Silvertabby will be the best person to comment on this.

If you have pre-2014 service then combining the LGPS pensions will retain the final salary link I believe so won't all go in to CARE scheme.

Whether you want to combine them depends on relative annual salary now compared to what you were on and adjust for the inflation increases applied to deferred pension and likely salary looking ahead. 

Silvertabby

Yes, when deciding whether or not to combine your LGPS records, compare your pensionable pay figures (whole time equivalent if you were/are part time).  If your new post is higher, then combining would mean that all of your pre 2014 final salary benefits would be re-calculated using your higher salary.  

Your new LGPS should give you some information - come back to us if you are not sure of anything.

If your new employer accepts transfers in of DC schemes (not all do) then that would be used to 'buy' additional CARE pension.  You can ask for a quote before deciding.

PensionQ

Hi Silvertabby can you advise me please?  I am 58 and have 2 pensions within the LGPS.  One is a deferred pension which I had contributed into from 1987 and I have a current pension.  I have worked for the same employer since 1987 but have had different roles within the company.  I am also taking VR.  LGPS have now written to me asking whether I want to combine the 2 pensions.  Should I combine or keep them separate?  My Final pay for the deferred pension was £28000 and the Final pay for my current pension is £25,000.  
Thank you

TVAS

Pensionpotpal your plans are unrealistic. 1) the minimum pension age will be 58 as we are moving to 10 years within the State Pension Age. 2) 17-20k will be an unrealistic income to live on in 16 years time.
So somebody mentioned ISA savings you will need additional savings anyway so save save save.

TVAS

PensionQ why don't you ask for a retirement quote at age 60 one for separate pensions the other if the pensions are linked. Simples.

Dazed_and_C0nfused

TVAS said:

Pensionpotpal your plans are unrealistic. 1) the minimum pension age will be 58 as we are moving to 10 years within the State Pension Age. 2) 17-20k will be an unrealistic income to live on in 16 years time.
So somebody mentioned ISA savings you will need additional savings anyway so save save save.

The minimum was going to be 57, not 58 with no link to State Pension age.  From the consultation document,
the government does not intend to link NMPA rises automatically to state pension age increases at this time

And existing pensions have protection against the increased minimum age.

AlanP_2

TVAS said:

PensionQ why don't you ask for a retirement quote at age 60 one for separate pensions the other if the pensions are linked. Simples.

Our LGPS will provide a quote when you are within 6 months of wanting to take the benefits.

Hi Silvertabby can you advise me please?  I am 58 and have 2 pensions within the LGPS.  One is a deferred pension which I had contributed into from 1987 and I have a current pension.  I have worked for the same employer since 1987 but have had different roles within the company.  I am also taking VR.  LGPS have now written to me asking whether I want to combine the 2 pensions.  Should I combine or keep them separate?  My Final pay for the deferred pension was £28000 and the Final pay for my current pension is £25,000.  

My wife had a similar decision to make a couple of years ago and she was provided with a quite detailed analysis of the options based on the "facts" as they were at that point in time (they didn't allow for the impact of any unknown payrises / promotions for example).

Have you had anything similar to assist you?  

pensionpotpal

Dazed_and_C0nfused said:

TVAS said:

Pensionpotpal your plans are unrealistic. 1) the minimum pension age will be 58 as we are moving to 10 years within the State Pension Age. 2) 17-20k will be an unrealistic income to live on in 16 years time.
So somebody mentioned ISA savings you will need additional savings anyway so save save save.

The minimum was going to be 57, not 58 with no link to State Pension age.  From the consultation document,
the government does not intend to link NMPA rises automatically to state pension age increases at this time

And existing pensions have protection against the increased minimum age.

Thanks for all of your help.

So if my current pensions have protection against increased minimum age, then I can take my DC and current DB schemes at 55 if I choose?