LGPS - worth it?

Time2count

Thank you so much everybody for your help and explanations.
I will read through the links suggested and have a think about moving my additional payments, will ask payroll at work about AVC via salary but if that's not possible, I will definitely be considering doing it via d/d.

I agree, if the session had said eg 'stay in the scheme for 20 years and when you retire you can get 20/49 of your salary each year' it would have made a lot more sense! As it was, I came away from the session, did a quick calculation and thought 'whats the point, I can get more in interest in an ISA over the next 20 years'

Really pleased I decided to ask more knowledgeable people to explain it better!

Kniphofia7

Have a look on your scheme's web site, there is lots of information on there and you should be able to register for My Pension Online where you can get annual benefit statements, run pension estimates, update beneficiaries etc.

poseidon1

Time2count said:

Thank you so much everybody for your help and explanations.
I will read through the links suggested and have a think about moving my additional payments, will ask payroll at work about AVC via salary but if that's not possible, I will definitely be considering doing it via d/d.

I agree, if the session had said eg 'stay in the scheme for 20 years and when you retire you can get 20/49 of your salary each year' it would have made a lot more sense! As it was, I came away from the session, did a quick calculation and thought 'whats the point, I can get more in interest in an ISA over the next 20 years'

Really pleased I decided to ask more knowledgeable people to explain it better!

My concern is if you were that confused about the excellence of the LGPS, and the benefits of considering AVCs alongside, what were the reactions of all other attendees of that seminar both in the past and in the future! Hope you are spreading your newly found enlightenment.

That said , although a lot of people do seem to find pensions deadly boring and to be relegated well behind other spending, one does wonder if the language used in these 'explanatory' seminars of final salary schemes is specifically designed to confuse members and depress full take up. 

Outside of Central and Local government  and other public sector employment, final salary pension schemes  have pretty much gone the way of the dodo bird,  so those who do qualify in the public sector are best advised to grab it whilst it's there ( notwithstanding the enormous burden this will ultimately place on taxpayers in future).

hugheskevi

poseidon1 said:

Outside of Central and Local government  and other public sector employment, final salary pension schemes  have pretty much gone the way of the dodo bird,  so those who do qualify in the public sector are best advised to grab it whilst it's there ( notwithstanding the enormous burden this will ultimately place on taxpayers in future).

Final salary schemes have gone in public sector too - it is all career average since April 2022.

Kniphofia7

I don't know any public sector pensions which are still final salary, the LGPS went to CARE in 2014.  Teachers and Fire are also CARE schemes now.

JoeCrystal

Kniphofia7 said:

I don't know any public sector pensions which are still final salary, the LGPS went to CARE in 2014.  Teachers and Fire are also CARE schemes now.

There are still some I believe. One recent poster just joined such scheme although the poster kept quiet as to which one he joined.

hyubh

Kniphofia7 said:

I don't know any public sector pensions which are still final salary, the LGPS went to CARE in 2014.  Teachers and Fire are also CARE schemes now.

I hope people aren't assuming a simple rule, 'CARE < final salary' - LGPS 2014 was not officially costed to be cheaper for the taxpayer than LGPS 2008...

peter3hg

hyubh said:

Kniphofia7 said:

I don't know any public sector pensions which are still final salary, the LGPS went to CARE in 2014.  Teachers and Fire are also CARE schemes now.

I hope people aren't assuming a simple rule, 'CARE < final salary' - LGPS 2014 was not officially costed to be cheaper for the taxpayer than LGPS 2008...

My own calculations of the NHS pension scheme is that I'll be about 14% better off in the CARE scheme if I retired at the old final salary pension age, even including the actuarial reduction on the CARE scheme. This assumes no change in job band.

Obviously a promotion nearer retirement can easily make the final salary pension better, as can changes to state pension age etc.

Lemon_dr1zzle

The annual statements my LGPS fund send are very clear. They clearly show that the members will accrue a pension of £x per annum and it is paid every year until retirement. 

Members still query if £x per annum is their ‘pot’, if they will receive their pensionable pay as their pension, if the death grant shown is their ‘pot’ etc 

Silvertabby

Lemon_dr1zzle said:

The annual statements my LGPS fund send are very clear. They clearly show that the members will accrue a pension of £x per annum and it is paid every year until retirement. 

Members still query if £x per annum is their ‘pot’, if they will receive their pensionable pay as their pension, if the death grant shown is their ‘pot’ etc 

Very common misunderstanding that Final Salary pension meant that you would continue to receive your salary/pensionable pay in retirement.

Problem was that once someone had decided that they understood the rules, they tended not to ask questions....

Lots of tales I could tell, but one that turned 'interesting' was the lady who was retiring after nearly 20 years service.  We sent her her options paperwork, along with her pension figures,  and she rang our office manager screaming that we were trying to rob her, that her pension was much more than we were offering, and she was going to the police, the press, her MP  and the Ombudsman if we didn't confirm her correct pension details forthwith. The figures she was spouting were ridiculously high, and we were at a loss to see where she had got them from - then the penny dropped.  She had kept all of her annual benefit statements and had added up all the year end figures......