LGPS pension entitlement for temporary worker

Mart211

Hi
I wonder if anyone can help.
A couple of years ago I took a temporary job with a university, covering maternity leave which was to last at least 6 months. In fact it lasted 13 months. At the initial interview I was told that my salary & benefits would be in line with the grading structure & also that this allowed me to join the organisational pension scheme. The contract was in line with this & I took the job & joined the scheme straight away.
Having now moved job I thought I should check on the value of my pension & couldn't find what I wanted. However, what I did notice after a great deal of searching was something that mentioned a vesting period. I hadn't seen anything about this before so I queried this with the pension company & they said that as I had not been with the university for 2 years I didn't qualify for a pension & that my pension was now frozen. When I asked what this meant they said that I could get a refund of what I had paid in but not what the university had paid in on my behalf as my employer. They would either pay what I had paid back to me or transfer it into another pension.
I queried this with the university & they said that it was out of their hands but admitted that they would benefit because my employers contribution would add to the fund value. They said that I didn't need to join the pension, it was my choice. Therefore it wasn't their fault that I wouldn't receive anything paid on my behalf my the employer.
This all seems really wrong on so many levels. Firstly I feel that I have been miss-sold the job, secondly this is my money that has been paid under a contract of employment, thirdly as far as I understand it the pension rules are that an employer has to contribute & fourthly temporary workers are supposed to have similar rights to permanent staff.
Could anyone help & advice please. We are not talking an insignificant amount & it is causing me a bit of anxiety. This must have happened to others.

la531983

"You can meet the vesting period with less than two years’ membership in certain circumstances."

https://www.lgpsmember.org/help-and-support/glossary/#vesting-period

You will need to find out what those "certain circumstances" are. 

QrizB

la531983 said:

"You can meet the vesting period with less than two years’ membership in certain circumstances."
https://www.lgpsmember.org/help-and-support/glossary/#vesting-period
You will need to find out what those "certain circumstances" are. 

Hint: the circumstances are quoted at the link given.

See also:

https://www.lgpsmember.org/your-pension/thinking-of-leaving/leaving-before-retirement/

Leaving without deferred benefits
You will not qualify for deferred benefits if you do not meet the two year vesting period. If you do not qualify for deferred benefits, you will generally have three options:

• You can claim a refund of the pension contributions you have paid.
• If you have been a member of the LGPS for more than three months, you may be able to transfer the cash value of the deferred refund to another pension arrangement. You will generally have to complete a transfer within a limited time after leaving. See the section on Transferring your pension to find out what you need to know about pension transfers.
• You can delay your decision. You should bear in mind any time limit for completing a transfer out. You can delay your decision to take a refund for up to five years or until age 75 if that is earlier

Can you get another 11 months work with LGPS sometime in the next five years?

Dazed_and_C0nfused

Mart211 said:

Hi
I wonder if anyone can help.
A couple of years ago I took a temporary job with a university, covering maternity leave which was to last at least 6 months. In fact it lasted 13 months. At the initial interview I was told that my salary & benefits would be in line with the grading structure & also that this allowed me to join the organisational pension scheme. The contract was in line with this & I took the job & joined the scheme straight away.
Having now moved job I thought I should check on the value of my pension & couldn't find what I wanted. However, what I did notice after a great deal of searching was something that mentioned a vesting period. I hadn't seen anything about this before so I queried this with the pension company & they said that as I had not been with the university for 2 years I didn't qualify for a pension & that my pension was now frozen. When I asked what this meant they said that I could get a refund of what I had paid in but not what the university had paid in on my behalf as my employer. They would either pay what I had paid back to me or transfer it into another pension.
I queried this with the university & they said that it was out of their hands but admitted that they would benefit because my employers contribution would add to the fund value. They said that I didn't need to join the pension, it was my choice. Therefore it wasn't their fault that I wouldn't receive anything paid on my behalf my the employer.
This all seems really wrong on so many levels. Firstly I feel that I have been miss-sold the job, secondly this is my money that has been paid under a contract of employment, thirdly as far as I understand it the pension rules are that an employer has to contribute & fourthly temporary workers are supposed to have similar rights to permanent staff.
Could anyone help & advice please. We are not talking an insignificant amount & it is causing me a bit of anxiety. This must have happened to others.

Financially avoiding a refund is likely to be the best option.

Non refundable tax would be deducted from the refund of your contributions and the employer contributions are lost (as far as you're concerned).

But if you transfer to a DC pension you might be surprised at the amount you will get in your DC fund.  

Whilst probably not as good as being able to keep the accrued DB pension it will be far better than the net refund of your own contributions.

hyubh

Mart211 said:

Hi
I wonder if anyone can help.
A couple of years ago I took a temporary job with a university, covering maternity leave which was to last at least 6 months. In fact it lasted 13 months. At the initial interview I was told that my salary & benefits would be in line with the grading structure & also that this allowed me to join the organisational pension scheme. The contract was in line with this & I took the job & joined the scheme straight away.
Having now moved job I thought I should check on the value of my pension & couldn't find what I wanted. However, what I did notice after a great deal of searching was something that mentioned a vesting period. I hadn't seen anything about this before so I queried this with the pension company & they said that as I had not been with the university for 2 years I didn't qualify for a pension & that my pension was now frozen. When I asked what this meant they said that I could get a refund of what I had paid in but not what the university had paid in on my behalf as my employer. They would either pay what I had paid back to me or transfer it into another pension.
I queried this with the university & they said that it was out of their hands but admitted that they would benefit because my employers contribution would add to the fund value. They said that I didn't need to join the pension, it was my choice. Therefore it wasn't their fault that I wouldn't receive anything paid on my behalf my the employer.
This all seems really wrong on so many levels. Firstly I feel that I have been miss-sold the job, secondly this is my money that has been paid under a contract of employment, thirdly as far as I understand it the pension rules are that an employer has to contribute & fourthly temporary workers are supposed to have similar rights to permanent staff.
Could anyone help & advice please. We are not talking an insignificant amount & it is causing me a bit of anxiety. This must have happened to others.

As D&C says, you're missing the point that the transfer value to take to a pension of your choice will be far more than your own contributions alone. You'll be in a better position after this than people who had spent the same time enrolled into a no frills AE pension.

That said, *if* you're likely to rejoin the LGPS (doesn't matter which fund/administering authority let alone which employer), you might prefer to stick it out. Since, in that scenario, the possibility of a refund or transfer would be cancelled, and an auto-aggregation would apply instead (this is scheme rules). One caveat - formally there is a 5 year cutoff for a so-called frozen or deferred refund liability to be paid out. Most LGPS funds take a relaxed attitude to this (it wasn't the historic rule), but if you're not likely to rejoin within 5 years, probably best to just transfer out to make sure you won't be lumbered with a refund (which is by far the worst option).

Pat38493

I suspect your best bet is to either transfer the pension to another DC one which will preserve the employer value, or as suggested above try to get more work with the organisation during the next years to preserve it.  Taking a refund will, as you have found, mean you lost the employer contributions.

Marcon

Mart211 said:

This all seems really wrong on so many levels. Firstly I feel that I have been miss-sold the job, secondly this is my money that has been paid under a contract of employment, thirdly as far as I understand it the pension rules are that an employer has to contribute & fourthly temporary workers are supposed to have similar rights to permanent staff.
Could anyone help & advice please. We are not talking an insignificant amount & it is causing me a bit of anxiety. This must have happened to others.

You would have been given details of the scheme (or could have accessed online) at the time you took the job, so saying you were 'mis-sold the job' is incorrect.

You have the option of transferring all your contributions and those of the employer to another pension arrangement, so not sure what your beef is?

Lemon_dr1zzle

I have no idea what you are getting so anxious about. 

You joined a scheme on a temporary contract. Yes, you left within the vesting period so you aren’t entitled to a pension, you can have a refund of your contributions or transfer out. But had you died full death in service would have been paid.  

Why do you think you’re entitled a refund of the employers contributions? They aren’t yours. 

hyubh

Lemon_dr1zzle said:

I have no idea what you are getting so anxious about. 

Because the transfer out option hasn't been very well explained...? I don't know what communications exactly the OP got, but smaller LGPS funds still administered in house in particular can deliberately keep reference to the possibility of a TV out to a minimum, since a refund is much easier to administer...

Why do you think you’re entitled a refund of the employers contributions? They aren’t yours. 

That's a very DB centric POV that would be distinctly non-intuitive to someone used to pensions in a modern private sector environment.