Opting out lgps

Dazed_and_C0nfused

Matt_22 said:

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 

For most people it doesn't matter as LGPS is a defined benefit scheme so you accrue pension under the scheme rules, there is no pot of money so what you or employer pay is of little relevance.

Say you earn £30k and pay £1,950 (real cost likely to be £1,560 after tax relief).

You will accrue a pension of £612 whether your employer pays 12.5% or 32.5%.  And that £612 is revalued annually to account for inflation.

Matt_22

Thank yes I just was trying to figure out how much refund I would get to transfer to an other pension if leave

Silvertabby

Matt_22 said:

Thank yes I just was trying to figure out how much refund I would get to transfer to an other pension if leave

A refund and a transfer to another scheme are two very different things.

Refund = your own contributions less 20% tax.  Nothing from your employer contributions.

Transfer = valuation based on your pension accrual, even if you haven't met the vesting period (2 years).  Can easily be 3 X the refund option.  The transfer payment would be made direct to your new pension fund, not via you.

Note:  You must have at least 3 months membership to be eligible for a transfer.  Less than that, then a refund is your only option.

Matt_22

Thank you. Would be the transfer option I believe then

Matt_22

Would likely be back to the peoples pension that I had previously 

JoeCrystal

If you stayed a little longer, you could have transferred in old pension funds to buy an index-linked income pension and avoided the minimum requirement to retain your LGPS (That is if your employer allows it, though)

Matt_22

Could you explain more please? Thank you

Silvertabby

If you had transferred your People's Pension into the LGPS in your first 12 months of service (as long as your LGPS accepts transfers in from DC schemes - not all do) then you would have actual pension benefits in the LGPS, despite having less than the usual 2 years vesting period.

Matt_22

I maybe able to do that I have been at the lgps for 2 months I'm not sure it's going to be a long term fit through 

Matt_22

Ok looking at the letter I got through the post it doesn't mention transferring in any other pensions. It says first they would have to give me a quote on how much lgps the fund would buy me.