LGPS - Impact of Extra Year

Ms_Chocaholic

jamjar92 said:

Ms_Chocaholic said:

I've worked something like 1,400 hours over 10/11 months - so is it best that there isn't a separate pension pot for these additional hours and preferable for them all to be lumped together in the one pot (or does it not make a difference).

The CARE element (post 2014) is 1/49th of pay for that year, so earn more, more is added to the pension. Number of hours does not make any difference. Amkority of your pay is pensionable under CARE.

This is the pay on which you normally pay pension contributions. Typically pensionable pay includes:

• your normal salary or wages
• bonuses
• overtime (both contractual and non-contractual)
• maternity, paternity, adoption and shared parental pay
• shift allowance
• additional hours payments if you work part-time
• any other taxable benefit specified in your contract as being pensionable

You do not pay contributions on:

• any travelling or subsistence allowances
• pay in lieu of notice
• pay in lieu of loss of holidays
• payment as an inducement not to leave before the payment is made
• any award of compensation (other than payment representing arrears of pay) made for the purpose of achieving equal pay
• pay relating to loss of future pensionable payments or benefits
• pay paid by your employer if you go on reserve forces service leave
• the monetary value of a car or pay received in lieu of a car
• any sum which has not had tax liability determined on it

I have 23 years under final salary and 2014-ongoing under the new Care.

What is 1/49th of?

So do you know if it would be beneficial or not to have all my pension under one pot (my normal role) or split into 2 (normal role & Covid role). thanks

jamjar92

Ms_Chocaholic said:

Hi, yes I am a basic rate taxpayer (even with the extra hours).

What is a TFLS?

So say I put £5k into my pension via AVCs, how would I get this back? As a lump sum when I take my pension (plan on retiring early - 59/60 and deferring for a few years) or would this increase my monthly pension? What if I was to die before I drew my pension or a couple of years after I started claiming it - would I lose this £5k?

TFLS - Tax Free Lump Sum, this is how you get it back when you take your main LGPS pension.
 If you die before taking it goes who you nominated in your main LGPS scheme.
See https://www.pru.co.uk/rz/localgov/ This is Pru, your LGPS scheme might use a different provider.

jamjar92

I have 23 years under final salary and 2014-ongoing under the new Care.

What is 1/49th of?.

1/49th of the gross salary, so the more you earn the bigger amount goes into your CARE pension.

So do you know if it would be beneficial or not to have all my pension under one pot (my normal role) or split into 2 (normal role & Covid role). thanks

Makes no difference 1/49th is added to your pension of gross pay.

hyubh

Ms_Chocaholic said:

Has the Covid Relief post gone through to the pensions team as a distinct employment? So you have your 'main' post (date joined scheme December 1991) + a second, concurrent one (date joined scheme March 2020 or whenever exactly)? As I type this we haven't got past scheme year end, so you won't have two annual benefit statements, but have you had a pensions starter letter or somesuch for the Covid post...?

It has yes but it can be changed (started Covid job - April 2020).  I raised an issue through the Union as I wasn't being paid any holiday entitlement so we are still in negotiations stage so things can be changed as the issue re the "normal" post has been an offer thru the union.

Ms_Chocaholic said:

I've worked something like 1,400 hours over 10/11 months - so is it best that there isn't a separate pension pot for these additional hours and preferable for them all to be lumped together in the one pot (or does it not make a difference).

From a pensions POV, I'm struggling to see a much of a difference given the further information you've provided. The default when leaving a concurrent employment under the CARE scheme is to aggregate, so if the two pension memberships were to stand, you'd still need to explicitly opt to keep separate benefits anyway. Combined benefits would be a prerequisite to the Covid hours coming under McCloud... but then you wouldn't get an above full time service credit on a final salary basis. And there's a good chance McCloud won't be beneficial to you anyway (because it won't be for most LGPS members). 

Similarly, combined benefits would typically be beneficial for various non-voluntary early retirement scenarios, e.g. ill health retirements from active are typically better than those from deferred. But separate benefits would mean, you could draw one before the other. Yet if you came to draw all your LGPS benefits at the time, voluntarily, then it's all much of a muchness anyway...