Can I transfer both LGPS and private pension to Alpha Civil Service pension?

Lifematters

I’m due to start a job with Civil Service and getting a bit confused over the pension options.

On a salary of 30k is there a limit to how much pension I can transfer in? 

I have approx £200k in Vangauard and a very old LGPS pension that pays out £5k a year at 60. 

I believe the Alpha pension pays at SP age (which for me is 67) so not sure I would get a better deal transferring in LGPS. 

Can I transfer £200k of my private pension AND pay added pension of say 50% salary? 

Ideally I would like to take Alpha pension at 60 so whatever I accrue  will be subject to a reduction. 

xylophone

Below may help?


https://www.civilservicepensionscheme.org.uk/joining-the-pension-scheme/transfer-an-old-pension-into-your-civil-service-pension/#:~:text=If you have a pension,keeping things simple for you.

https://www.civilservicepensionscheme.org.uk/your-pension/managing-your-pension/increase-your-pension/added-pension/

hugheskevi

On a salary of 30k is there a limit to how much pension I can transfer in? 

You are limited to £15K of alpha pension resulting from a non-Club transfer.

I have approx £200k in Vangauard and a very old LGPS pension that pays out £5k a year at 60. 

I believe the Alpha pension pays at SP age (which for me is 67) so not sure I would get a better deal transferring in LGPS.

Assuming very old means more than 5 years since leaving, it would be a CETV transfer. As the factors are set using the same assumptions for both schemes, there should be little difference in value. Due to the higher Normal Pension age the headline amount would be higher, but payable from a later date.

Can I transfer £200k of my private pension AND pay added pension of say 50% salary?

Yes, subject to the £15K limit on transfer-in.

michaels

Lifematters said:

I’m due to start a job with Civil Service and getting a bit confused over the pension options.

On a salary of 30k is there a limit to how much pension I can transfer in? 

I have approx £200k in Vangauard and a very old LGPS pension that pays out £5k a year at 60. 

I believe the Alpha pension pays at SP age (which for me is 67) so not sure I would get a better deal transferring in LGPS. 

Can I transfer £200k of my private pension AND pay added pension of say 50% salary? 

Ideally I would like to take Alpha pension at 60 so whatever I accrue  will be subject to a reduction. 

50% salary added pension, you need to be aware of AA with the inflation uplift.

Also not sure if NMW applies but don't think so as it is net pay?

Lifematters

50% salary added pension, you need to be aware of AA with the inflation uplift.

I’m not sure I understand this. Does it mean I can’t pay 50% of my salary towards added pension in the same year that I transfer in say £200k private pension as this will exceed my AA? 

On a salary of £30k is my limit of accruing £15k pension from a transfer in plus any added pension bought in same year? Should I reduce the amount of pension I transfer in? Age 54 so only looking to contribute for another 6 years. 

hugheskevi

Lifematters said:

50% salary added pension, you need to be aware of AA with the inflation uplift.

I’m not sure I understand this. Does it mean I can’t pay 50% of my salary towards added pension in the same year that I transfer in say £200k private pension as this will exceed my AA? 

On a salary of £30k is my limit of accruing £15k pension from a transfer in plus any added pension bought in same year? Should I reduce the amount of pension I transfer in? Age 54 so only looking to contribute for another 6 years. 

The 50% limit applies solely to the transfer-in, nothing else.

Purchasing £15,000 of Added Pension for a 54 year old will give alpha Added Pension of about £1,200 p/a. Normal alpha accrual will be about £700 of alpha pension p/a. Annual Allowance is very unlikely to be an issue for you (particularly as the purchases would start mid-way through 2022/23), even with inflated pension inputs in 2022/23 due to methodology used by HMRC to calculate Defined Benefit pension accrual.

NedS

michaels said:

Lifematters said:

I’m due to start a job with Civil Service and getting a bit confused over the pension options.

On a salary of 30k is there a limit to how much pension I can transfer in? 

I have approx £200k in Vangauard and a very old LGPS pension that pays out £5k a year at 60. 

I believe the Alpha pension pays at SP age (which for me is 67) so not sure I would get a better deal transferring in LGPS. 

Can I transfer £200k of my private pension AND pay added pension of say 50% salary? 

Ideally I would like to take Alpha pension at 60 so whatever I accrue  will be subject to a reduction. 

50% salary added pension, you need to be aware of AA with the inflation uplift.

A transfer of £200,000 for a 54 year old would purchase around £16000 of Alpha Pension. This exceeds 50% of your £30k salary, so you will unlikely be able to transfer in the full £200,000. This is based on self pension (no dependents).

If you transfer in with dependents, then the value is less and may come in just under the £15k limit (~ £14,800) allowing you to transfer in the full £200,000.

If you are limited, presumably you would choose to transfer the £200,000 DC pot and leave the LGPS where it is given it already gives you comparable DB benefits.

Silvertabby

Am I right in thinking that all of your LGPS service is pre 2008?  If so, leaving the LGPS pension where it is means you can take it from age 60, even if you are still working in the Civil Service.

If you transfer it in to the Civil Service scheme, then it will immediately convert to an NRA of SPA.

Lifematters

Thanks everyone for the useful information.

Yes, I left LGPS over 20 years ago so I can take the pension at 60 unreduced with a small lump sum. I considered asking for a transfer quote just to see if the alpha pension offered at 67 but taking it at 60 with actuarial reductions would work out better than the LGPS. It may not be worth the hassle but I will look to transfer the Vanguard Pension (or part of it if that’s allowable) to get the maximum pension of 50% earnings.