Local Government Pension Scheme? Very confused!

Dazed_and_C0nfused

Jon_01 said:

xylophone said:

LGPS is a defined benefit pension scheme. Your wife does not have a "fund"  but a "promise to pay" her benefits (which would be based on salary/length of service) at normal scheme retirement age (or earlier/later depending on the rules of the scheme).


Your wife has two deferred pensions with LGPS? 

Does the LA/other body for which she worked produce something like this?

https://lgps.buckinghamshire.gov.uk/if-youre-no-longer-paying-in-deferred/how-we-calculate-your-deferred-benefits/

Why would she wish to transfer out to buy an annuity when what she has is in effect a fully index linked annuity which  will almost certainly provide you with a widower's pension if she predeceases you?

https://www.lppapensions.co.uk/members/general-pensions-information/death-of-a-member/#:~:text=Widows / Civil Partners pension,not married at the time).

Thank you for that.

The point of the post is, we don't know. We can't get any advice from the guys that work for the LGPS in a form that we understand! For example, when she asked if the total of the fund could be transferred out (ie the 80K), she was told yes it could. But from what has been said above, I get the impression that it can't...

I've just arranged my pension and thought this would be a simple matter! But from what I read above, coming out of the LGPS would be a huge mistake?

Would I be right in thinking she needs to consult someone that deals with LGPS's?

With LGPS she doesn't have a pension fund.

Do you understand the basics of how the LGPS works?

xylophone

I suggest you read

https://assets.publishing.service.gov.uk/media/5a80b577ed915d74e33fbf54/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf

Your wife has "safeguarded benefits valued in excess of £30,000".

See also link below.

It seems clear that  before an annuity could be purchased, your wife would need to transfer into a DC scheme - this is a scheme which provides flexibility and one of those options would be to buy an annuity. Even though  a lifetime annuity would be a non flexible benefit, it seems to me that she would still need the advice (and don't expect it to be cheap) of a Pension Transfer Specialist.


https://rtsfinancialplanning.co.uk/why-you-might-transfer-a-defined-benefit-pension-for-an-annuity/#:~:text=The only thing you can,to a defined contribution pension.

Has your wife obtained her state pension forecast?

You should note that the LGPS administrator does not provide financial advice.

If your wife decides that she needs such advice, then she will need to find an adviser.

She could try

https://adviserbook.co.uk/

Tick "confirmed independent" and "pension transfer" when the menu comes up.

r6mile

The easy way for you to understand it is that essentially through LGPS she already has sort of an annuity, that is inflation linked and is for life. So if what she wants is a reliable income, she already has one. Even if you could theoretically transfer out the pension and then buy an annuity, it likely would be poorer value than just keep things as they are.

AlanP_2

Pick a possible retirement date a couple of months ahead (assuming your wife is old enough to access the pensions) so say 1st December and ask for retirement quotes.

You are likely to be pleasantly surprised at what the LGPS will pay out?

Alternatively many LGPS administration teams provide a member website that often includes the facility to get an estimated pension value as at a chosen date.

redofromstart

I have quite a bit to do with LGPS funds through my work. The personal pot doesn't have an assigned value so I don't understand the origin of the 80k figure - unless you have asked for a transfer value? What you did used to get was an estimated value towards the 'lifetime pension allowance' but it is a fairly meaningless figure.  What matters is the annual payment she has confirmed. Essentially she bought a guaranteed proportion of her salary each year and all the risk rests with the scheme employer. If the fund performs badly then she still gets that guaranteed amount and the employer pays more to maintain it. It'll have a high transfer out value as a result but you would be lucky to find a comparable annuity for the money, and her former employers would frankly rub their hands in glee for everyone who transfers their risk out.

you know those articles in the news about steel and coal workers getting ripped off for many thousands from their pensions? Those are the people who sold their defined benefit pension thinking they were better off with a lump sum. 

If it was my pension I would leave it well alone.  

xylophone

https://www.lgpsmember.org/2023/09/06/check-your-annual-statement-2/#:~:text=Your pension fund must provide,on their online pension portal.

Is your wife in receipt of these statements? What exactly do they show?

With regard to your wife's other pensions, are these DC pensions?

If so, she can obtain  some guidance (but not financial advice) through Pension Wise.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

If financial advice is required, you could try the link in my previous?

Jon_01

Dazed_and_C0nfused said:

Jon_01 said:

xylophone said:

LGPS is a defined benefit pension scheme. Your wife does not have a "fund"  but a "promise to pay" her benefits (which would be based on salary/length of service) at normal scheme retirement age (or earlier/later depending on the rules of the scheme).


Your wife has two deferred pensions with LGPS? 

Does the LA/other body for which she worked produce something like this?

https://lgps.buckinghamshire.gov.uk/if-youre-no-longer-paying-in-deferred/how-we-calculate-your-deferred-benefits/

Why would she wish to transfer out to buy an annuity when what she has is in effect a fully index linked annuity which  will almost certainly provide you with a widower's pension if she predeceases you?

https://www.lppapensions.co.uk/members/general-pensions-information/death-of-a-member/#:~:text=Widows / Civil Partners pension,not married at the time).

Thank you for that.

The point of the post is, we don't know. We can't get any advice from the guys that work for the LGPS in a form that we understand! For example, when she asked if the total of the fund could be transferred out (ie the 80K), she was told yes it could. But from what has been said above, I get the impression that it can't...

I've just arranged my pension and thought this would be a simple matter! But from what I read above, coming out of the LGPS would be a huge mistake?

Would I be right in thinking she needs to consult someone that deals with LGPS's?

With LGPS she doesn't have a pension fund.

Do you understand the basics of how the LGPS works?

Ok, so the more I get into this, the more I get the feeling that she spoke to the trainee on the day she called the LPGS!

1: She was told the value of each fund, she wrote each down. But you say that that doesn't exist.

2: She asked if she could transfer in her other pension pots and was told, 'yes you can'. Clearly, if the value of the fund (however you look at it) isn't connected to the pension, then there's no point moving more funds into it?

3: She asked if she could transfer the funds out (transfer value) and was given the same numbers as 1

Do we understand the basics of the LGPS, well, we thought to had a vague idea after speaking to the guys at the fund, but having read the replies here, it's obvious we don't have a clue because the info we were given is (very) incorrect!

Dazed_and_C0nfused

Jon_01 said:

Dazed_and_C0nfused said:

Jon_01 said:

xylophone said:

LGPS is a defined benefit pension scheme. Your wife does not have a "fund"  but a "promise to pay" her benefits (which would be based on salary/length of service) at normal scheme retirement age (or earlier/later depending on the rules of the scheme).


Your wife has two deferred pensions with LGPS? 

Does the LA/other body for which she worked produce something like this?

https://lgps.buckinghamshire.gov.uk/if-youre-no-longer-paying-in-deferred/how-we-calculate-your-deferred-benefits/

Why would she wish to transfer out to buy an annuity when what she has is in effect a fully index linked annuity which  will almost certainly provide you with a widower's pension if she predeceases you?

https://www.lppapensions.co.uk/members/general-pensions-information/death-of-a-member/#:~:text=Widows / Civil Partners pension,not married at the time).

Thank you for that.

The point of the post is, we don't know. We can't get any advice from the guys that work for the LGPS in a form that we understand! For example, when she asked if the total of the fund could be transferred out (ie the 80K), she was told yes it could. But from what has been said above, I get the impression that it can't...

I've just arranged my pension and thought this would be a simple matter! But from what I read above, coming out of the LGPS would be a huge mistake?

Would I be right in thinking she needs to consult someone that deals with LGPS's?

With LGPS she doesn't have a pension fund.

Do you understand the basics of how the LGPS works?

Ok, so the more I get into this, the more I get the feeling that she spoke to the trainee on the day she called the LPGS!

1: She was told the value of each fund, she wrote each down. But you say that that doesn't exist.

2: She asked if she could transfer in her other pension pots and was told, 'yes you can'. Clearly, if the value of the fund (however you look at it) isn't connected to the pension, then there's no point moving more funds into it?

3: She asked if she could transfer the funds out (transfer value) and was given the same numbers as 1

Do we understand the basics of the LGPS, well, we thought to had a vague idea after speaking to the guys at the fund, but having read the replies here, it's obvious we don't have a clue because the info we were given is (very) incorrect!

The things you've said in your latest post are making me question if she actually has a normal LGPS pension or if, for some odd reason, she opted out of the LGPS scheme (😳) and went for some DC alternative?

I know the civil service pension has that option (Partnership instead of Alpha) as people have asked about it on here before but I don't recollect such an option being mentioned with LGPS.  And for most people it's unlikely to be a sensible thing to do.

You can transfer into LGPS, in the first year of membership I think, but that is to buy more guaranteed pension, not to add to a pension fund/pot.

You refer to the value of each fund.  Can you remember what these funds are 🤔.

Jon_01

Dazed_and_C0nfused said:

Jon_01 said:

Dazed_and_C0nfused said:

Jon_01 said:

xylophone said:

LGPS is a defined benefit pension scheme. Your wife does not have a "fund"  but a "promise to pay" her benefits (which would be based on salary/length of service) at normal scheme retirement age (or earlier/later depending on the rules of the scheme).


Your wife has two deferred pensions with LGPS? 

Does the LA/other body for which she worked produce something like this?

https://lgps.buckinghamshire.gov.uk/if-youre-no-longer-paying-in-deferred/how-we-calculate-your-deferred-benefits/

Why would she wish to transfer out to buy an annuity when what she has is in effect a fully index linked annuity which  will almost certainly provide you with a widower's pension if she predeceases you?

https://www.lppapensions.co.uk/members/general-pensions-information/death-of-a-member/#:~:text=Widows / Civil Partners pension,not married at the time).

Thank you for that.

The point of the post is, we don't know. We can't get any advice from the guys that work for the LGPS in a form that we understand! For example, when she asked if the total of the fund could be transferred out (ie the 80K), she was told yes it could. But from what has been said above, I get the impression that it can't...

I've just arranged my pension and thought this would be a simple matter! But from what I read above, coming out of the LGPS would be a huge mistake?

Would I be right in thinking she needs to consult someone that deals with LGPS's?

With LGPS she doesn't have a pension fund.

Do you understand the basics of how the LGPS works?

Ok, so the more I get into this, the more I get the feeling that she spoke to the trainee on the day she called the LPGS!

1: She was told the value of each fund, she wrote each down. But you say that that doesn't exist.

2: She asked if she could transfer in her other pension pots and was told, 'yes you can'. Clearly, if the value of the fund (however you look at it) isn't connected to the pension, then there's no point moving more funds into it?

3: She asked if she could transfer the funds out (transfer value) and was given the same numbers as 1

Do we understand the basics of the LGPS, well, we thought to had a vague idea after speaking to the guys at the fund, but having read the replies here, it's obvious we don't have a clue because the info we were given is (very) incorrect!

The things you've said in your latest post are making me question if she actually has a normal LGPS pension or if, for some odd reason, she opted out of the LGPS scheme (😳) and went for some DC alternative?

I know the civil service pension has that option (Partnership instead of Alpha) as people have asked about it on here before but I don't recollect such an option being mentioned with LGPS.  And for most people it's unlikely to be a sensible thing to do.

You can transfer into LGPS, in the first year of membership I think, but that is to buy more guaranteed pension, not to add to a pension fund/pot.

You refer to the value of each fund.  Can you remember what these funds are 🤔.

Just logged in to check!  Yes, it is a LGPS.

As to what the funds are?   The dashboard doesn't say, it just says 'Deferred Pension' for both.

The values for each fund as given by the guy at the fund were 43,400 and 38,500

She worked for the local authority twice, some years apart, and in different roles, which why we assumed she has two items showing? One in 2006 and the second in 2010.

r6mile

What are the deferred pension amounts for each? (Or are they combined)