Multiple Pension questions

nyawton

Hi everyone, 

I am struggling to find / understand what is best to do with my multiple pensions. And would greatly appreciate any clear advise.

A brief break down of my pension history

Deferred Pension (WYPF) Small pot Stopped contributing in 2008

No ongoing pension untill 2016 

Previous Pension ( NEST) £7k (changed jobs last year)

Current Pension (WYPF) Ongoing

I have a few questions,

The most pressing being a question asked by the WYPF "Link this deferred benefit record to the new one OR keep separate? the letter goes onto say there may be benefits either way but they are unable to advise. I have until April to decide, but unsure how best to procede

The second question, I do not belive I can combine the NEST with WYPF, is there anything I can do with it other than contribute, I see they have many options to change the investment risk. It is currently sat at being a "Retirement pot" risk, but I have the option to change to a "Higher risk" contribution model, with this being somewhat of a small pot as is, I wonder if this could be worth looking at?

Thanks

hyubh

nyawton said:

The most pressing being a question asked by the WYPF "Link this deferred benefit record to the new one OR keep separate? the letter goes onto say there may be benefits either way but they are unable to advise. I have until April to decide, but unsure how best to proceed

As there has been more than a 5 year gap between leaving the LGPS and rejoining, transferring the deferred WYPF pension to the current active one would involve an internal CETV to purchase an additional 'earned pension' credit to go with your regular CARE pension. (The 'link this deferred benefit' phrasing is to cover the more general case when the gap is typically less than 5 years.)

The credit would revalue in the same way as your regular CARE pension (which is almost as how the deferred pension revalues), and also have the same normal pension age as your regular CARE pension. So compared to keeping the deferred pension separate, the key differences would be,

- A later normal pension age (SPA vs. 65 - depending on when exactly your previous membership began, the deferred pension left 'as is' may involve some 'rule of 85' protection as well, that would be lost)
- No standard lump sum (if you 'stopped contributing in 2008', then presumably it's mainly or all under the 1997 scheme, so 1/80 pension and 3/80th lump sum)
- However: very likely a notably higher pension to make up for the first two points

If I would you I would request a formal transfer quotation, if you haven't actually got a figure for the earned pension credit - it would be ridiculous to make a decision without knowing what additional 'CARE' pension you would actually get. (Don't be fobbed off with any talk of this being a decision to merely 'aggregate' or 'link' your benefits, as failing the 5 year rule makes it an actual transfer in a fuller sense.)

The second question, I do not believe I can combine the NEST with WYPF

In the jargon, this would be a 'non-Club transfer in'. The following page implies WYPF as the administering authority do allow these sorts of transfer in (not all LGPS administering authorities do):

https://www.wypf.org.uk/active/all-about-your-pension/transfers/

Similar-ish to transferring your old WYPF pension into the new one, a transfer of the NEST pension would involve purchasing additional 'earned pension' to alongside your regular CARE pension. The process would be to complete all the forms to get a formal quotation, then decide whether to proceed at that point.

Lemon_dr1zzle

WYPF will be able to quote what the additional CARE purchase would be by aggregating the records. As explained in the above post it will most likely be a higher annual pension but you will lose automatic lump sum, lower normal retirement age etc. 
If you have been in your new role less than 12 months then you can ask to transfer in your Nest pension.