Help re LGPS and Civil Service Bulk Transfer decision

Mokkadoodledo

Hi all, this is my first post and I am hoping I can get some advice to help me make a decision re what to do with my pension(s).

Basically, I worked in Local Government from 2000 to 2019, but was then TUPEd across to the Civil Service, but am now about take up a new role and return to Local Government.

When I first moved across to the Civil Service, I was advised I could opt to transfer my LGPS pension across into the Civil Service pension scheme as part of a Bulk transfer exercise, along with my colleagues.   The bulk transfer process was on hold for a long while due to the McCloud judgement so I have only now recently received a letter (now that I am about to leave!) outlining the various options available as part of the Bulk Transfer.  From reading the letter - I could still take part in the transfer if I wish, I would just need to confirm my decision before my last day with the Civil Service.

If I were to take part in the bulk transfer, apparantly my pre 2008 LGPS service would be transferred to Nuvos (with a critical retirement age of 60 to mirror the 85 year rule of LGPS). My 2008 - 2014 LGPS service would be transferred to Nuvos (normal pension age of 65) - and the CARE element of my LGPS would transfer across to ALPHA.   The lump sum payment from my pre 2008 LGPS pension is gone if I move it across to the Civil Service, but this is adjusted in the calculations, so my pension will be slightly higher due to no longer having the lump sum (when I applied the formula for calculating Nuvos benefits vs the formula for calculation LGPS benefits for my pre 2008 service against my current salary, the figures were as follows:

Nuvos = £3225 

LGPS = £2572

So it would be around £650 additional pension per year if I forgo the lump sum.

Some additional info:

My salary at the time of leaving LGPS in 2019 was £25,300

My current Civil Service salary is £29,600

My new salary in Local Govt will be £29,400 (but with pay progression, there is the potential for this to increase over the next 5 years to another 5K on top).

I am hoping to retire around age 60 - 62 (or partially retire at least) - to this end, this year I have started paying into a Vanguard Targetted Retirement Fund (£200 per month)

Also, as Alpha and LGPS are both CARE schemes, and if I decided not to take part in the bulk transfer and keep my old LGPS pension where it is - am I right in thinking there is no benefit to leaving it in ALPHA, and it would be better to transfer it across to LGPS also?

If the bulk transfer options letter hadn’t arrived just before I am about to leave the Civil Service - I think I would just have linked my old LGPS pension to my new one (my new salary in Local Govt is 5K higher than it was when I left in 2019).   I think I am just wanting to check I am not overlooking any possible advantages to taking part in the Bulk Transfer (if I decide I would rather have a slightly higher pension rather than a lump sum) whilst I am still within the transfer window, and dismissing it out of hand.  - Or if there is any pros and cons of transferring/not transferring that I may not be aware of and therefore not considered? 

Many thanks

WillowLea1962

I have a view based on my instinct rather than knowing all the detailed rules ... don't do the bulk transfer from original LGPS to the CS scheme but instead transfer your current CS scheme benefits into LGPS when you start your new LG job.  If your New employer is not in the same 2000-2019 LGPS as you were with up to 2019 then you want to transfer that into the your new job LGPS as the original benefits will be preserved.  My view is basically you want everything in one LGPS for simplicity and ease of knowing your total future benefits.

Personally I have moved between different LA LGPS and always consolidated with my current employers LGPS any previous benefits without any loss or detriment.

hyubh

WillowLea1962 said:

If your New employer is not in the same 2000-2019 LGPS as you were with up to 2019 then you want to transfer that into the your new job LGPS as the original benefits will be preserved.  

Personally I have moved between different LA LGPS and always consolidated with my current employers LGPS any previous benefits without any loss or detriment.

Small point, but a different employer or not won't be relevant, and technically even a different LGPS fund (administering authority) or not won't - aggregation rules apply equally. If a different fund, the practical difference will be that the new one probably won't know about the old service unless you tell them. In either case however, being a post-2014 leaver, the default formally will be to aggregate with an option to keep separate.

My view is basically you want everything in one LGPS for simplicity and ease of knowing your total future benefits.

The main possible exception would be someone who left some time ago with a final salary pension (so not the OP). In the past this would have potentially impacted rule of 85 protections, nowadays you're looking at hitting the 5 year disqualifying break rule and so the old deferred pension being converted in a CARE pension credit. Which won't be bad (in fact it will be good), but will have the higher CARE scheme NPA.

hyubh

Mokkadoodledo said:

asically, I worked in Local Government from 2000 to 2019, but was then TUPEd across to the Civil Service, but am now about take up a new role and return to Local Government.

When I first moved across to the Civil Service, I was advised I could opt to transfer my LGPS pension across into the Civil Service pension scheme as part of a Bulk transfer exercise, along with my colleagues.   The bulk transfer process was on hold for a long while due to the McCloud judgement so I have only now recently received a letter (now that I am about to leave!) outlining the various options available as part of the Bulk Transfer.  From reading the letter - I could still take part in the transfer if I wish, I would just need to confirm my decision before my last day with the Civil Service.

If I were to take part in the bulk transfer, apparently my pre 2008 LGPS service would be transferred to Nuvos (with a critical retirement age of 60 to mirror the 85 year rule of LGPS). My 2008 - 2014 LGPS service would be transferred to Nuvos (normal pension age of 65) - and the CARE element of my LGPS would transfer across to ALPHA.   The lump sum payment from my pre 2008 LGPS pension is gone if I move it across to the Civil Service, but this is adjusted in the calculations, so my pension will be slightly higher due to no longer having the lump sum (when I applied the formula for calculating Nuvos benefits vs the formula for calculation LGPS benefits for my pre 2008 service against my current salary, the figures were as follows:

Nuvos = £3225 

LGPS = £2572

So it would be around £650 additional pension per year if I forgo the lump sum.

This is pretty bespoke given the NRA fudge. In effect the bulk transfer would involve the equivalent of two LGPS 2008 credits, but where the former carries a lower NPA than normal. Which is a bit odd Moreover, Nuvos actually was/is a CARE scheme - it had/has a final salary section only to meet Club transfer in requirements (i.e. you couldn't actually accrue new final salary reckonable service in Nuvos).

Anyway, if you did the bulk transfer then transferred again back into the LGPS (you'd want to restore the final salary link for your final salary pension, right...?), you would get a single LGPS 2008 credit purchased with the two Nuvos final salary tranches. This would attract an NPA of 65 for the whole lot. However, and similar to what you have found with the bulk transfer figures and pre-2008 lump sum, the reckonable service credit would be adjusted upwards to reflect the loss of the NPA 60 tranche.

In contrast, if you didn't proceed with the bulk transfer, but transferred in your earlier LGPS service directly to your new LGPS membership, then (given the lack of a 5 year disqualifying break) your pre-2014 service would go in like-for-like, with the 85 year rule protections for pre-2008 service restored. Outside of flexible retirement scenarios, the LGPS doesn't allow taking different tranches of pension at different dates though. But maybe that would become an option at 60 (in which case, taking your pre-2008 pension only at that point would be the obvious choice - though keep in mind flexible retirements by definition require still being an active member, and proceeding with employer agreement).

Mokkadoodledo

Thanks hyubh, this is really helpful.  (I must admit I didn’t realise Nuvos was a CARE scheme also - that’s interesting).

hyubh said:

Anyway, if you did the bulk transfer then transferred again back into the LGPS (you'd want to restore the final salary link for your final salary pension, right...?),

Yes - I definitely would want to restore the final salary link I think.

hyubh said:

you would get a single LGPS 2008 credit purchased with the two Nuvos final salary tranches. This would attract an NPA of 65 for the whole lot. However, and similar to what you have found with the bulk transfer figures and pre-2008 lump sum, the reckonable service credit would be adjusted upwards to reflect the loss of the NPA 60 tranche.

Ah! that makes sense, so am I right in thinking I should be able to work out how roughly the amount it would increase by using the formula for Nuvos? (service credit x  final pensionable earnings / 60)  

I think the main thing that is holding me back from taking part in the Bulk Transfer and just linking my old LGPS to my new one, is time frames - anything to do with pensions and transfers doesn’t seem especially speedy from what I have seen so far.   The deadline to submit the form for the Bulk Transfer is late Sept 2023 so nothing will be done until that date has passed (as it is possible to change my mind uptil the deadline if I wish).  By the time of the deadline, I will have been in the LGPS scheme one month already, and I presume I will then need to wait for the transfer to complete across to the Civil Service before I can then let LGPS know I want to transfer my pension back across to LGPS.  However, I understand I only have 12 months to transfer in to LGPS, so my worst case scenario would be that the bulk transfer hasn’t completed by the time the 12 month deadline passes.😬