Defined Contribution/Benefit Transfer

BeepBeep22

I have recently started working for a local authority, which comes with access to the LGPS (defined benefit pension, based on a career average salary) 

I have been asked if I want to transfer any previous pensions in to this. I have a defined contribution pension pot from a previous employer with a middling amount in (I only worked for them for a few years). 

Is there any benefit to transferring a DC pension into a DB pension? Would it make a noticeable change to the payout if it’s based on a career average salary regardless?

dunstonh

Is there any benefit to transferring a DC pension into a DB pension?

Yes, there are some pros but also some cons.

Would it make a noticeable change to the payout if it’s based on a career average salary regardless?

Potentially yes but possibly no.     

I know that is vague but which option is best will largely depend on your retirement objectives/timescale.

I have a defined contribution pension pot from a previous employer with a middling amount in (I only worked for them for a few years). 

A middling amount could suggest a  pension valued over £100k.  Whereas only working for them for a few years may suggest a value of just a few thousand.     The amount could sway the decision as well.  e.g. a few thousand pounds is barely anything and it would be more convenient to have it in the DB scheme.    A few hundred thousand can make the difference between early retirement or later retirement.

AlanP_2

At this stage all you will be doing is asking the LGPS to get in touch with old scheme, obtain amount and then calculate CARE benefits that would be purchased.

Once you have numbers to hand, and have given some thought to the points Dunston raised you should start to get some clarity.  

hyubh

BeepBeep22 said:

I have been asked if I want to transfer any previous pensions in to this. I have a defined contribution pension pot from a previous employer with a middling amount in (I only worked for them for a few years). 

Kick off the transfer process to get a quotation from the LGPS administrator. The quotation will take the form of additional annual pension (and survivor pension) that will revalue and increase the same way your regular LGPS pension will revalue and increase (CPI).

Is there any benefit to transferring a DC pension into a DB pension?

Generally speaking if additional DB pension is what you want, the terms will be very good due to how the government currently stipulates LGPS benefits are valued for transfer purposes (in or out).

Would it make a noticeable change to the payout if it’s based on a career average salary regardless?

'Non-Club' transfers into the LGPS are not based on salary. Put another way, you are not purchasing service (like back in the day with the final salary scheme), but additional pension at scheme normal pension age directly.