How to estimate LGPS early retirement figures

Silvertabby

McCloud is complex.   But I do hope that LGPS pensioners out there, who have already benefitted from the pre-McCloud underpin rules (ie, pensions paid as the higher of the old rules/combo of old and new rules), aren't expecting shedloads of arrears......

Silvertabby

hyubh said:

Spreadsheet_Addict said:

As much for Silvertabby as OP - won't the McCloud remedy have some impact on this with all of the previous pension up to 2022 being able to be counted under the old schemes if it benefits OP. E.g everything up to 2022 being on 80ths with NRA 60 and a 3× pension lump sum?

I admit I'm not sure if it would just be the 2008 scheme it went back to for McCloud or all the way to the previous scheme as I've only looked into my own which started in 2010 so for me it's the better of the 2008 or CARE schemes I'll get to 2022.

The 1/80 pension 3/80 accrual ended for everyone in 2008. McCloud concerns the 2014-22 period, so the final salary benefit structure concerned is the 2008 scheme one (1/60 pension, no standard lump sum, NRA 65). That said, a member would need to have had particularly high pay rises (likely involving a promotion/move to a better paid role) to beat the CARE accrual over the same period, even with the CARE scheme's higher NRA (although, this gets more possible the younger someone is and therefore the more to go in their career).

Some (older versions) of public sector pension schemes did have NRAs of 60 - but that has never been the case in the LGPS.  Contrary to popular belief, that was always 65, for both men and women.  Those who retired at 60 with unreduced benefits did so simply because they had accrued at least 25 years service and so met the Rule of 85 (age and length of service = 85).

R85 ended for new entrants in October 2006, and isn't part of the McCloud ruling.

Spreadsheet_Addict

hyubh said:

Spreadsheet_Addict said:

As much for Silvertabby as OP - won't the McCloud remedy have some impact on this with all of the previous pension up to 2022 being able to be counted under the old schemes if it benefits OP. E.g everything up to 2022 being on 80ths with NRA 60 and a 3× pension lump sum?

I admit I'm not sure if it would just be the 2008 scheme it went back to for McCloud or all the way to the previous scheme as I've only looked into my own which started in 2010 so for me it's the better of the 2008 or CARE schemes I'll get to 2022.

The 1/80 pension 3/80 accrual ended for everyone in 2008. McCloud concerns the 2014-22 period, so the final salary benefit structure concerned is the 2008 scheme one (1/60 pension, no standard lump sum, NRA 65). That said, a member would need to have had particularly high pay rises (likely involving a promotion/move to a better paid role) to beat the CARE accrual over the same period, even with the CARE scheme's higher NRA (although, this gets more possible the younger someone is and therefore the more to go in their career).

Thanks. I wasn't sure and hadn't looked further back than the 2008 scheme as it didn't apply to me. In my position this is what happened; major promotions in the last 5 years, so it might make a difference but my calculations say not more than £500 p.a.

Lucky old teachers never had the adjustments that LGPS and NHS had inbetween the 80ths schemes and CARE, so they go 80ths all the way to 2022. Mind you, I wouldn't swap jobs with them.

xylophone

Some (older versions) of public sector pension schemes did have NRAs of 60 

Yes indeed - I have friends who were in the TPS when the retirement age was 60 and I think the NHS used  to have 60 ( or even earlier - I knew somebody who had worked as a staff nurse in a psychiatric hospital who was able to take full benefits at II think) around age 55).

Some private company schemes too had a retirement age of 60 - the old Barclays DB pension was one such.

swindiff

I started my University career back in 1989 as a low grade technician.  The pension scheme for the lower grades was then the LGPS (still is now) even though we were university employees.  The pension then was 1/80th + 3/80th lump sum and I am pretty sure retirement could be taken at 60 without actuarial reduction (I would need to try and find an old contract of employment to be sure).  I moved to USS in 2006 due to promotions and transferred my pension at that time.  Probably a mistake given the state of USS compared to LGPS, but conditions are at least being restored in April.

Silvertabby

swindiff said:

I started my University career back in 1989 as a low grade technician.  The pension scheme for the lower grades was then the LGPS (still is now) even though we were university employees.  The pension then was 1/80th + 3/80th lump sum and I am pretty sure retirement could be taken at 60 without actuarial reduction (I would need to try and find an old contract of employment to be sure).  I moved to USS in 2006 due to promotions and transferred my pension at that time.  Probably a mistake given the state of USS compared to LGPS, but conditions are at least being restored in April.

Back then, the LGPS NRA was definitely 65.  You probably read that you would be able to take unreduced benefits from age 60 as long as you met the Rule of 85 (R85).  ie, your length of service (at least 25 years) plus your age (60) = 85.

Silvertabby

xylophone said:

Some (older versions) of public sector pension schemes did have NRAs of 60 

Yes indeed - I have friends who were in the TPS when the retirement age was 60 and I think the NHS used  to have 60 ( or even earlier - I knew somebody who had worked as a staff nurse in a psychiatric hospital who was able to take full benefits at II think) around age 55).

Some private company schemes too had a retirement age of 60 - the old Barclays DB pension was one such.

And the Civil Service.  I did ask why the LGPS had opted for 65/R85 instead of the (almost) standard 60, but the answer - if there was one - had been lost in the mists of time.

hyubh

swindiff said:

I started my University career back in 1989 as a low grade technician.  The pension scheme for the lower grades was then the LGPS (still is now) even though we were university employees.  The pension then was 1/80th + 3/80th lump sum and I am pretty sure retirement could be taken at 60 without actuarial reduction (I would need to try and find an old contract of employment to be sure).

If you were to retire from active then in effect that was so (but not otherwise). Prior to the 85 year rule there a similar rule that didn't have its successor's clause for deferreds - so if you left active membership age 60 with at least 25 years service you would get an immediate pension with no actuarial reduction (https://www.legislation.gov.uk/uksi/1986/24/regulation/E2/made).

I moved to USS in 2006 due to promotions and transferred my pension at that time.  Probably a mistake given the state of USS compared to LGPS, but conditions are at least being restored in April.

If you couldn't have continued active membership of the LGPS, then transferring was still the right thing to do. Any accrual changes in the USS that happened subsequently did not affect the transferred in service itself; obviously it would have been better for the final salary link not to have ended in 2016, but that's still better for your old LGPS service than if the applicable 'final salary' was from before the promotions.

swindiff

I could not have stayed in the LGPS, I had to leave due to my grade and join the USS.  Like you say probably a good thing now I think about it.  I want to retire at 60 and if I had left it in LGPS I guess that part of my pension would also be actuarily reduced, whereas it won't in the USS.