Opting out lgps

Silvertabby

If you are really that strapped for cash, then have a look at (temporarily) switching into the 50:50 scheme.  ie, you pay 50% of normal pension contributions in return for 50% normal pension accrual.

But note that this scheme was only ever intended to be a temporary measure, to dissuade those in financial difficulties from opting out of the LGPS altogether.  

Matt_22

I'm thinking of leaving the position soon, so I don't think I will make the 2 year vesting period 

Silvertabby

Matt_22 said:

I'm thinking of leaving the position soon, so I don't think I will make the 2 year vesting period 

If not, then be sure to transfer your benefits into your new pension scheme instead of taking a refund of your own contributions.  The difference is.....amazing.

Matt_22

Ah if I transfer it I still get the employer contributions?

Silvertabby

Matt_22 said:

Ah if I transfer it I still get the employer contributions?

Contributions don't matter in a DB pension, but the transfer valuation will be based on your full accruals.

As a very rough rule of thumb, a transfer valuation could be 3 X the amount available as a refund.

Matt_22

sevenhills said:

Matt_22 said:

I am paying £40 a week in to the lgps. I am thinking of opting out. As is quiet alot of money
 Is it madness to opt out?

If you are paying £40 into your pension, your employer is paying in around £120, is that a lot of money to be missing out on?

Thanks I though the employer paid double. So the employer would pay £80 a week?

flipper_72

Nope definitely over 3x the payment the employee pays (I run payroll in a school).

Matt_22

Thanks.I pay 6.5%

Marcon

Matt_22 said:

sevenhills said:

Matt_22 said:

I am paying £40 a week in to the lgps. I am thinking of opting out. As is quiet alot of money
 Is it madness to opt out?

If you are paying £40 into your pension, your employer is paying in around £120, is that a lot of money to be missing out on?

Thanks I though the employer paid double. So the employer would pay £80 a week?

Doesn't work like that in a DB scheme.

flipper_72 said:

Nope definitely over 3x the payment the employee pays (I run payroll in a school).

Entirely true, but anyone reading this (especially OP) needs to be aware that the employer contribution isn't allocated 'equally' across all employees. Older ones effectively get a higher proportion, so he shouldn't expect a transfer value to be his contributions + employer contributions of 3x that amount.

Matt_22

I'm sure it said employee pays 6.5% and employer pays 12.5%. is this not how it works? I have only just joined 2 months ago