Finding Advice on the McCloud judgement

Pipkin1812

I’m in LGPS and have just written seeking clarification on impact of McCloud on potential early retirement date and reductions due to protected NPA. I’m not sure whether there will be any significant difference financially but we will see. 

Suffol

hugheskevi said:

Yes, that's what I now realise - has been less of a problem in classic, although I got warnings a couple of years when I got close to / over the annual limit (pay has see-sawed a bit for complicated reasons, but in both cases I managed to avoid a  charge because of lower previous years). Do you suggest advice for that aspect, even if I don't need to worry about McCloud? Or is there nothing I can do about it other than try to avoid earning above it (which is an option for me / refusing extra hours etc)?

I really think you will struggle to even find anyone to give you advice on all of this, let alone good advice - especially with the further unknown variables of how McCloud may affect decisions. I suspect it will be something you need to decide for yourself.

I'd start with the question of what you do about classic pension at age 60, as that might solve any Annual Allowance problem and mitigate an LTA problem. LTA issue may suggest commencing alpha early when thinking about age 60, and note that alpha is not subject to abatement.

So this has *really* got me thinking (not before time..). With very many thanks for advice already given, would the following work (and be allowed under the rules)?:
* Take partial-retirement from age 60 (November 2022). At that time, take my accrued classic pension + standard lump sum as it would be in 2015 - and reduce my working hours to avoid abatement - current post can be reworked to allow this, I think.
* Elect to move to Alpha retrospectively from 2015 onwards, and continue to accrue pension under Alpha for as long as I wanted to go on working (might be a few years, but not right through to 67, more likely finishing at 63 or 64).
* At that point, either take the alpha pension (actuarially reduced) on top of the existing classic pension , or - if I could afford it - wait to take it unreduced at 67 at my NPA.
* I've done a state pension check, and need to make two additional years' contributions  to qualify for full pension at 67.
Would this plan likely avoid issues over annual charges (apart from maybe the past / coming year) and maybe the lifetime limit? Would the classic pension I'd be able to get be based on my salary in 2015 * x/80 where x= years of service to 2015?

 Am in a too-big house, still with seven years to go on the mortgage, but could easily downsize once retired, so main outgoing would disappear. Or, is there a *better* plan - moving out to partnership for instance? I do still enjoy working, and am in good health, so don't want to retire completely unless there's huge financial benefit (which I don't think there is).
Again grateful for all input from you amazing experts

hugheskevi

So this has *really* got me thinking (not before time..). With very many thanks for advice already given, would the following work (and be allowed under the rules)?:

Yes.

Would this plan likely avoid issues over annual charges (apart from maybe the past / coming year) and maybe the lifetime limit? Would the classic pension I'd be able to get be based on my salary in 2015 * x/80 where x= years of service to 2015?

You would only have Annual Allowance issues if your pensionable earnings exceeded about £108,000. Doing part-time work, that would presumably be much less likely. As you would be accruing less pension, any Lifetime Allowance issues would either be mitigated or removed entirely.

Classic pension would be based on final pensionable earnings as at date of leaving the scheme (ie when you took partial retirement), not 2015. Initially the classic pension would be based on your years in the classic scheme. When the 2015 remedy is applied it would be amended - so if you choose to move to 2015 scheme from 2015 and leave the alpha pension untouched, you would have been overpaid classic pension and have to pay that back.

Note that if Lifetime Allowance remains an issue, commencing alpha pension early becomes more attractive as that reduces the LTA value.

Or, is there a *better* plan - moving out to partnership for instance?

That can work too, depends on personal preferences.

hyubh

Pipkin1812 said:

I’m in LGPS and have just written seeking clarification on impact of McCloud on potential early retirement date and reductions due to protected NPA. I’m not sure whether there will be any significant difference financially but we will see. 

At the time of writing the MHCLG hasn't given the government's response to the consultation yet, however why do you think early retirement date is affected? The way the original protection was implemented in the LGPS did not touch early retirement dates.