Pension refund

SLD84

I joined a local government pension scheme through work. However, I have recently changed positions, within the same company, and will now be entered into the teachers pension fund instead. As I had been in my current pension for less than 2 years, I was offered a refund of my contributions or to transfer across to my new scheme. I opted to take a refund for now, as I have a couple of things that need paying for. So, I left the pension fund and requested the refund. 

However, I have now been informed that I have a historic local government pension elsewhere that has been placed into 'benefits on hold'. I wasn't aware of this, which means I can no longer be offered the refund. If I had been aware of the historic pension, I could have transferred the tiny amount into my current LGPS, and then requested the refund as there would have been less than 2 years contributions overall. 

My issue is, now I have left the LGPS, I can no longer transfer the historic pension into it. So, I now have two tiny pensions, with only a number of months contributions in each, which will both be placed into 'benefits on hold' that I can't access until I'm of pension age. 

If I had been advised to check any other pensions elsewhere before closing, I could have transferred in and received the refund. However, I didn't even think to check, as I didn't realise I ever paid into another LGPS. 

Is there anything I can do to access these and receive the refund? Any advice welcome. 

Simon11

If you are struggling financially now while working, how will you manage in retirement?

I am not sure you will see many people here recommended to obtain a refund on what is a brilliant pension scheme, although as a tax payer I don't mind saving some of our money later down the line.

Marcon

SLD84 said:

I joined a local government pension scheme through work. However, I have recently changed positions, within the same company, and will now be entered into the teachers pension fund instead. As I had been in my current pension for less than 2 years, I was offered a refund of my contributions or to transfer across to my new scheme. I opted to take a refund for now, as I have a couple of things that need paying for. So, I left the pension fund and requested the refund. 

However, I have now been informed that I have a historic local government pension elsewhere that has been placed into 'benefits on hold'. I wasn't aware of this, which means I can no longer be offered the refund. If I had been aware of the historic pension, I could have transferred the tiny amount into my current LGPS, and then requested the refund as there would have been less than 2 years contributions overall. 

My issue is, now I have left the LGPS, I can no longer transfer the historic pension into it. So, I now have two tiny pensions, with only a number of months contributions in each, which will both be placed into 'benefits on hold' that I can't access until I'm of pension age. 

If I had been advised to check any other pensions elsewhere before closing, I could have transferred in and received the refund. However, I didn't even think to check, as I didn't realise I ever paid into another LGPS. 

Is there anything I can do to access these and receive the refund? Any advice welcome. 

No. I appreciate it's cold comfort if you need the funds now, but you'll be grateful when you finally get to retirement.

SLD84

Simon11 said:

If you are struggling financially now while working, how will you manage in retirement?

I am not sure you will see many people here recommended to obtain a refund on what is a brilliant pension scheme, although as a tax payer I don't mind saving some of our money later down the line.

Bit of a cold and unnecessary comment. I'm not "struggling" thank you. It is a tiny amount of money, which over the course of 30 years will make very little difference to my pension, so I thought if a refund was an option I could use it to  pay for a couple of things. I can transfer into my new pension scheme if needs be. I was just wondering if there was something I wasn't aware of. 

SLD84

Marcon said:

SLD84 said:

I joined a local government pension scheme through work. However, I have recently changed positions, within the same company, and will now be entered into the teachers pension fund instead. As I had been in my current pension for less than 2 years, I was offered a refund of my contributions or to transfer across to my new scheme. I opted to take a refund for now, as I have a couple of things that need paying for. So, I left the pension fund and requested the refund. 

However, I have now been informed that I have a historic local government pension elsewhere that has been placed into 'benefits on hold'. I wasn't aware of this, which means I can no longer be offered the refund. If I had been aware of the historic pension, I could have transferred the tiny amount into my current LGPS, and then requested the refund as there would have been less than 2 years contributions overall. 

My issue is, now I have left the LGPS, I can no longer transfer the historic pension into it. So, I now have two tiny pensions, with only a number of months contributions in each, which will both be placed into 'benefits on hold' that I can't access until I'm of pension age. 

If I had been advised to check any other pensions elsewhere before closing, I could have transferred in and received the refund. However, I didn't even think to check, as I didn't realise I ever paid into another LGPS. 

Is there anything I can do to access these and receive the refund? Any advice welcome. 

No. I appreciate it's cold comfort if you need the funds now, but you'll be grateful when you finally get to retirement.

Thank you. I do understand the benefits of paying into my pension, I just thought it was such a small amount of money that it won't make much of a difference by transferring into my new pension scheme. 

QrizB

SLD84 said:

Is there anything I can do to access these and receive the refund? Any advice welcome.

In general, taking a LGPS contributions refund is a terrible idea.

Imagine you have pensionable pay of £20k pa, and were a member for one year. Your contributions at 5.8% would total £1160.

You would, however, have accrued a pension worth £408 a year, index linked and paid every year from SPA until you die. To buy an index-linked pension of £408 a year from a pension provider would cost something like £10k.

By asking for a refund of contributions, you are short-changing yourself by about £9k.

(As a taxpayer, and therefore responsible for paying your pension, I think your public-spiritedness is laudable. I wish more LGPS members would surrender their benefits for a tenth of their value.)

sevenhills

SLD84 said:

Is there anything I can do to access these and receive the refund? Any advice welcome.

You need to speak/contact to the administrators of the pension funds, not your employers.

dunstonh

Bit of a cold and unnecessary comment. I'm not "struggling" thank you. It is a tiny amount of money, which over the course of 30 years will make very little difference to my pension

The pension scheme will beat any alternative you do with that money apart from spending it.    So, it is understandable that the above posts thought you were short of money as that is usually the only reason anyone would even consider not being in the pension.

so I thought if a refund was an option I could use it to  pay for a couple of things.

it is is tiny, as you suggest, then I am sure you can use other money to buy a kitkat.

 I was just wondering if there was something I wasn't aware of. 

Perhaps an underestimation of just how good it is.

Dazed_and_C0nfused

SLD84 said:

Marcon said:

SLD84 said:

I joined a local government pension scheme through work. However, I have recently changed positions, within the same company, and will now be entered into the teachers pension fund instead. As I had been in my current pension for less than 2 years, I was offered a refund of my contributions or to transfer across to my new scheme. I opted to take a refund for now, as I have a couple of things that need paying for. So, I left the pension fund and requested the refund. 

However, I have now been informed that I have a historic local government pension elsewhere that has been placed into 'benefits on hold'. I wasn't aware of this, which means I can no longer be offered the refund. If I had been aware of the historic pension, I could have transferred the tiny amount into my current LGPS, and then requested the refund as there would have been less than 2 years contributions overall. 

My issue is, now I have left the LGPS, I can no longer transfer the historic pension into it. So, I now have two tiny pensions, with only a number of months contributions in each, which will both be placed into 'benefits on hold' that I can't access until I'm of pension age. 

If I had been advised to check any other pensions elsewhere before closing, I could have transferred in and received the refund. However, I didn't even think to check, as I didn't realise I ever paid into another LGPS. 

Is there anything I can do to access these and receive the refund? Any advice welcome. 

No. I appreciate it's cold comfort if you need the funds now, but you'll be grateful when you finally get to retirement.

Thank you. I do understand the benefits of paying into my pension, I just thought it was such a small amount of money that it won't make much of a difference by transferring into my new pension scheme. 

The amount you get (your contributions less non refundable tax) probably is small.

But by keeping the pension you are effectively retaining your contributions, without deduction of tax, and your employers contributions so a much much larger amount.

There have been a few posters who have transferred into a personal pension or SIPP and been genuinely amazed at the difference between the refund they decided to forego and the amount they ended up with instead.

SLD84

I am actually amazed at the tone of some of these responses. I came here to look for some information or guidance. 

As I have changed roles at work, I can no longer be part of the LGPS, this is not my choice. I have been moved into a different scheme. 

If you can’t reply without judgement, please don’t bother. It’s not helpful and completely unnecessary. 

Lemon_dr1zzle

Why not transfer them to your teachers pension?