Multiple transfers from LGPS to SIPP

dchi98

Really helpful thank you.

hyubh

dchi98 said:

The thing that got me thinking about this was a recent CETV request which was 7 times what she had paid in so far.

I then thought that if I paid in an additional £4000 into the LGPS a year that would generate a cetv of £28000, which i would transfer out. I have no idea if that logic works!! This would have been more benefical than paying £4000 into a sipp directly.

The main reason a CETV from her regular pension comes to be way more than what she personally contributed is because the employer paid in a whole lot more than her on top (at least double, probably more like triple). If she takes out an APC, then there won't be any employer contribution beyond one in a technical sense (viz., if the employer allows an APC to be paid through salary sacrifice). Also an APC taken out while an active member doesn't involve any survivor benefits, and by definition a DB pension with survivor benefits will (other things being equal) generate a CETV higher than one without. Lastly, APC contribution rates are set by age and sex, not rates of pensionable pay. So if your partner is low paid, she won't benefit from the (artificially) low regular employee rate with an APC.

An APC calculator is here by the way - when you're thinking of how much her CETV might be extended by, compare the pension actually bought (with a negative adjustment for the lack of survivor benefits), not the amount of employee contributions made:

https://www.lgpsmember.org/help-and-support/tools-and-calculators/buy-extra-pension-calculator/

dchi98

Thank you 'hyubh' for the extra information. Your answer adds to my understanding around potential CETV rates, for which I am grateful.

I think that the overwhelming view is to not transfer, which I will take on board.