Extremely small LGPS pension pot

powerbarge

Hi all

I've been doing some financial housekeeping and i've had quite a few jobs over the last years that have paid into ridiculously small pension pots. To be honest, i'd been ignoring them as climbing the career ladder at the time was more important than these benefits but i've decided I should probably get a handle on it

One of the jobs was with the local council where I worked for only 6 months. During that time I was paying into LGPS pension scheme. I have a letter from 2019 telling me that my defined benefit will be a whopping £137 per year!

What can I do with this - is there some way to cash it out? Can I transfer this out as its different to my other "defined contribution" pensions (the LGPS site doesnt really explain what happens in this situation)

Silvertabby

When did you leave?  If it was after 2008 you MAY be able to take this as a one-off lump sum under small pot/de minimis rules as long as you don't have any other LGPS benefits (even with another local authority).

If this is your only LGPS pension, and if you left after 2008, then ask your LGPS if you can take this as a de minimis payment.  If they don't allow this, or if you don't qualify due to your leaving date/having other LGPS benefits elsewhere, then your only realistic option would be to take this as an annual pension. Paid monthly, it should buy you a couple of pints!

LHW99

Presumably the OP would need to be over 55 to take this as a de minimus payment (if allowed)?

One other alternative could be if the OP was likely to take another public service job in future, when this small entitlement could perhaps be transferred in to the new pension within a given timescale.

Silvertabby

LHW99 said:

Presumably the OP would need to be over 55 to take this as a de minimus payment (if allowed)?

One other alternative could be if the OP was likely to take another public service job in future, when this small entitlement could perhaps be transferred in to the new pension within a given timescale.

Yes to both questions.

Gary1984

It may pay a bit more than that once it's been increased for inflation. But if it was me I'd just leave it as it is, hardly worth the bother of taking much action. Enjoy a monthly night at the cinema or beer/coffee/lunch with it when you're retired and reminisce about your time in Local Government.

GunJack

Didn't lgps have a 2 year min qualifying period as most other public sector schemes? If so, wouldn't that short term pension be lost? 

Silvertabby

GunJack said:

Didn't lgps have a 2 year min qualifying period as most other public sector schemes? If so, wouldn't that short term pension be lost? 

There was a time when the LGPS vesting period was only 3 months.  As OP has been given an annual pension DB statement, his service must fall in that period.

Arthurian

I have even less from my LGPS pension, and in spite of them sending me a letter asking if I wanted to trivially commute it, am happy to receive it monthly.  I see it as equivalent to my old boss coming round every Christmas with a few bottles of champagne, to thank me for my service.  With it being linked to RPI, it could be a better bet, depending on how long you live.