LGPS spouse pension and ARC increases - calculation errors

woolly_wombat

I am a deferred member of LGPS and previously entered a contract to purchase added years prior to April 2008. Am I correct to assume that added years also build entitlement to extra 50% spouse pension?

I subsequently elected to make Additional Regular Contributions (ARCs) later in 2008 and specifically chose the option to include additional spouse pension. I still have the forms, tables and other documentation to prove this. Am I correct to assume that spouse pension for 2008-2014 membership should be 37.5%?

My last deferred pension statement showed a spouse pension of approx 25%, which I now realise cannot possibly be correct.

I have another matter to try and untangle, for which I would also welcome assistance. As LGPS experts will be aware, ARC inflation increases were 'hard coded' into the rules in 2008 to be RPI-linked, so when the LGPS changed to CPI inflation increases for all other pension in 2012, the ARC contributions were substantially increased to retain RPI linkage.

I have now received an estimate of pension due to begin payment in the next few months from the latest borough to administer my LGPS pension (there have been several!) and have noticed that
the estimate is less than it should be based on figures I was given when I left employment that detailed (i) the portion of my pension that would increase in line with CPI in deferment and in payment and (ii) the portion that should have increased in line with RPI in both deferment and in payment.

Has anyone else encountered similar problems?

Suggestions as to how to proceed gratefully received.

xylophone

Have you seen

https://lgpsregs.org/timelineregs/GAD/ARCs_GADNote070312.pdf

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

https://commonslibrary.parliament.uk/research-briefings/sn05434/

woolly_wombat

Thanks for responding.
The first link is particularly useful. I have seen it before but you have saved me a search and it would be useful to include in my response to the current administrators of my LGPS pension.

The only thing I am really unsure about is whether the Added Years spouse pension should be 50%.

I have the necessary links to pre 2012 ARC rules with the hard coded RPI link and to my application form.

I don’t have links to detailed RPI and CPI links for the timeframe but ONS/BOE/HL calculators clearly indicate a shortfall in the estimate.

The spouse pension I am sure is WAY below what it ought to be but not by exactly how much.

xylophone

I wonder whether a message to Silvertabby (retired LGPS administrator) would help?

https://forums.moneysavingexpert.com/profile/2533069/Silvertabby

Silvertabby

A spouses pension of just 25% of your own pension doesn't sound right. Unless.....

Are male or female? When did you join the LGPS?  Are you married, or cohabiting?  If married, did you marry before or after you left the LGPS?

Even if you married before leaving, if whoever set up your latest record input your wrong date of marriage, then that can really screw things up with older service and spouse's benefits. 

MX5huggy

Just checking that you’re aware the latest statement is as at 31/03/2023, this is before the inflation increase is added on 05/04/2023. or is it the 6th. Anyway you get the idea. 

woolly_wombat

Silvertabby said:

A spouses pension of just 25% of your own pension doesn't sound right. Unless.....

Are male or female? When did you join the LGPS?  Are you married, or cohabiting?  If married, did you marry before or after you left the LGPS?

Even if you married before leaving, if whoever set up your latest record input your wrong date of marriage, then that can really screw things up with older service and spouse's benefits. 

Female, joined LGPS in 2000, left in 2004, rejoined in 2006 and left again in 2014, same employer. 

I was employed on a higher grade the second time so elected to have the two periods of service combined.

I was married long before I first joined, and early statements showed 50% spouse pension.

Yes, I think something has been inputted incorrectly at some point, and the consolidation with different local authority LGPS administrations on two separate occasions has probably led to more opportunity for error.

Silvertabby

woolly_wombat said:

Silvertabby said:

A spouses pension of just 25% of your own pension doesn't sound right. Unless.....

Are male or female? When did you join the LGPS?  Are you married, or cohabiting?  If married, did you marry before or after you left the LGPS?

Even if you married before leaving, if whoever set up your latest record input your wrong date of marriage, then that can really screw things up with older service and spouse's benefits. 

Female, joined LGPS in 2000, left in 2004, rejoined in 2006 and left again in 2014, same employer. 

I was employed on a higher grade the second time so elected to have the two periods of service combined.

I was married long before I first joined, and early statements showed 50% spouse pension.

Yes, I think something has been inputted incorrectly at some point, and the consolidation with different local authority LGPS administrations on two separate occasions has probably led to more opportunity for error!

My daughter also worked for the same employer for a couple of years and found a number of glaring errors when the records were last transferred, but I didn’t spot anything obvious. For several years neither of us received statements either. 

That rules out my pre 1988 service/ post retirement marriage theory then!  Even inputting your date of marriage incorrectly won't have affected your spouse's pension figure.

The only other theory I can come up with is that you have a LOT of ARCs (in relation to your main scheme pension) and that your ARCs have been input as member benefits only.

But this is all speculation, I'm afraid, and only your LGPS can actually look at your records and see whats what.  Are you able to ring them?  Fingers crossed that the problem can be easily fixed.

woolly_wombat

Silvertabby said:

The only other theory I can come up with is that you have a LOT of ARCs (in relation to your main scheme pension) and that your ARCs have been input as member benefits only.

But this is all speculation, I'm afraid, and only your LGPS can actually look at your records and see whats what.  Are you able to ring them?  Fingers crossed that the problem can be easily fixed.

ARCs are quite a significant proportion, and I did wonder if they had been input as members only.

The telephone number that the administrators provided is automated response with no option to speak to an actual human (aargh!) so I have fired off an email with as much detail as I can muster, and suggested what may have gone wrong as above, plus failure to provide RPI increases for pre-2012 ARCs.

Many thanks for all your help Silvertabby.

xylophone

https://www.lgpsmember.org/faqs/will-my-dependents-be-paid-a-pension-when-i-die/

Your spouse, civil partner or eligible cohabiting partner will receive part of your pension. It will be paid for the rest of their life. Generally, this is:

• 30.625% of the pension you built up from April 2014
• 37.50% of the pension you built up between April 2008 and March 2014
• 50% of the pension you built up before April 2008.

I am a deferred member of LGPS and previously entered a contract to purchase added years prior to April 2008. Am I correct to assume that added years also build entitlement to extra 50% spouse pension?

Is this of interest

https://www.bromley.gov.uk/downloads/file/867/lgps-factsheet-pensioners-partners-pension

If you elected before 1 April 2008 to buy LGPS added years of membership any period of membership you have paid for will count towards the benefits payable to your partner provided you married, entered into a civil partnership or were cohabiting with your partner whilst an active member of the LGPS. This will increase the value of the benefits payable for your spouse, civil partner or eligible cohabiting partner. 

Silvertabby

woolly_wombat said:

Silvertabby said:

The only other theory I can come up with is that you have a LOT of ARCs (in relation to your main scheme pension) and that your ARCs have been input as member benefits only.

But this is all speculation, I'm afraid, and only your LGPS can actually look at your records and see whats what.  Are you able to ring them?  Fingers crossed that the problem can be easily fixed.

ARCs are quite a significant proportion, and I did wonder if they had been input as members only.

The telephone number that the administrators provided is automated response with no option to speak to an actual human (aargh!) so I have fired off an email with as much detail as I can muster, and suggested what may have gone wrong as above, plus failure to provide RPI increases for pre-2012 ARCs.

Many thanks for all your help Silvertabby.

As long as you are sure that you opted for the ARCs with spouses benefits, then it does sound like your records could show member only.  By all means query the RPI link, but note that if you did elect for spouses benefits, then your records will have to be corrected - which will mean that your own recent pension quote will be reduced.  This needs to be sorted out first, before any RPI calculations can be made.