Club transfer LGP to Teachers

Foxy0_0

I have received the pension valuation in order to transfer my local government pension pot into the Teacher's Pension scheme under club rules.
However, the LGP value is £6300 if kept deferred. The transfer value into Teacher's pensions is estimated to be £6000. I do anticipate going part time in the future. 
The million dollar question is would it be beneficial to transfer the pot despite potentially losing out on the £300 all be it an estimate transfer value?
Any knowledgeable advice would be gratefully received. Many thanks...

Silvertabby

Do you have any/much pre 2008 service?  If so, then you may have some R85 protections that would be lost if you were to transfer.

Other than that, it's real crystal balls stuff I'm afraid.  One benefit of leaving your LGPS benefits deferred would be that you may be able to draw them (subject to your age) when you go part time with TPS.

Foxy0_0

Thanks, I don't have any pre 2008 service with this scheme. I was led to believe that the TPS has better actuarial rates for buy out and for taking earlier retirement. My research shows the TP is reduced by 3% for each year of early retirement in the career average scheme. However the LGP scheme is reduced by circa 5%. 
I know both schemes follow the Consumer price index and I was led to believe the TPS gets the CPI plus 1.6% .That's a no brainer if the LGP scheme only gets the CPI. Any comments please?

Silvertabby

Active TPS CARE is revalued by CPI plus 1.6%, whereas deferred LGPS (both CARE and pre 2014 final salary) increases by just CPI each year.

Not having any pre 2008 service does make your decision easier.  What it really boils down to is if you can manage on just your salary when you go part time, or if your salary plus your LGPS pension would make life more comfortable.

hyubh

Silvertabby said:

Active TPS CARE is revalued by CPI plus 1.6%, whereas deferred LGPS (both CARE and pre 2014 final salary) increases by just CPI each year.

Club transfers of CARE benefits keep the revaluation rate of the previous scheme, so that won't explain the quoted difference. And with respect to 60ths scheme benefits, TPS 2008 and LGPS 2008 are very similar (closer than the CARE schemes). So I'm a bit surprised at the difference...

OP - is this definitely a Club transfer, so without a disqualifying break? The gap between leaving the LGPS and joining the TPS being under 5 years, in other words (+ you having been in the TPS associated employment for less than 12 months).

Foxy0_0

Hi Yes I was in the TPS and transferred my pot into the LGPS and only stopped in the role 10 months. I have now gone back to the TPS and have only 1 month left to complete the transfer. I was confused why it was £300 less on the transfer value. 
Please can you confirm if the TPS has better actuarial rates for buy out and for taking earlier retirement?
Thanks
I 

hyubh

Foxy0_0 said:

Hi Yes I was in the TPS and transferred my pot into the LGPS and only stopped in the role 10 months. I have now gone back to the TPS and have only 1 month left to complete the transfer. I was confused why it was £300 less on the transfer value. 

I would just ask Capita (or SPPA if you're in Scotland) outright. Something along the lines of,

I have requested and received an estimate for transferring my deferred LGPS pension into the TPS. As a Club transfer, I understand that the CETV is irrelevant, and that the additional pension bought in the new scheme should be of equivalent value to the deferred pension forgone. I also understand that transferring in an LGPS CARE pension will not purchase additional pension attracting the higher TPS in-service revaluation rate, but a credit attracting the lower LGPS one.

Despite these facts, the purchased TPS pension quoted in my estimate (£6300 pa) is less than my existing LGPS deferred pension (£6000 pa). Can you please explain what features of the TPS, superior to the LGPS, has led to this situation in order to make the overall package of equivalent value?

Since I only have a short period in which to make my decision to transfer or not, I would be grateful if you could respond in a timely fashion.

Foxy0_0

Thank you so much for your input, it's gratefully received. I will most definitely ask the questions. I will feedback if I get a response.
Much appreciated.