LGPS Max TFLS

saucer

I hope someone can help please.

I thought i understood max TFLS to be based on the formula of (20xannual pension + PCLS + AVC)/4.

My wife's forecast is suggesting a max quite a bit lower even though they seem to be aware of AVC. I can't see how they have calculated it (and we are querying) but does anyone know what formula is likely to apply. Thank you

iantowelsh

If you google  ‘lgps calculator’, select the one for the official lgps website, this gives you several options max tfls being one of them.
Since I’m a newbie I cant post any links

saucer

Thanks Ian. I hadn't actually seen that one before despite being definitely not a newbie.

Https://www.lgpsmember.org/help-and-support/tools-and-calculators/

It is reassuring because it is what I had thought, rather than what they have suggested in the forecast. Let's see what they say.

Silvertabby

Some LGPSs are using a new, more convoluted, formula, but there shouldn't be a huge difference.

Is it possible that the figures you have been given don't include the AVC?  In my day we didn't do retirement calcs including AVCs earlier than 6 months before retirement.  Or they have used the current AVC figure, not what you reckon it will be with another X months of contributions?  

SarahB16

saucer said:

I hope someone can help please.

I thought i understood max TFLS to be based on the formula of (20xannual pension + PCLS + AVC)/4.

My wife's forecast is suggesting a max quite a bit lower even though they seem to be aware of AVC. I can't see how they have calculated it (and we are querying) but does anyone know what formula is likely to apply. Thank you

I always thought it be that too and have always used that formula as well.  

However, on using the link above and the 'Maximum AVC lump sum calculator' I've just had a lightbulb moment as in the calculator it does not actually ask you for your AVC amount therefore the formula works without requiring you to include the AVC amount. 

For someone like me who does not wish to take anything from my LGPS pension tax free only my AVC pot an easier formula is:  (20 x annual pension)/3

I had never calculated by simply dividing by 3 but using a couple of examples it does work:  

e.g. (20 x £20k)/3 = £133,333 is the same as (20 x £20,000 + 0 + £133,333)/4 = £133,333

(20 x £30k)/3 = £200,000 is the same as (20 x £30k + 0 + £200,000k)/4 = £200,000

Like I said a lightbulb moment for me on realising it can be calculated without inputting the AVC amount.  I don't think I have overlooked anything and I think it only works using the simply one third calculation as I don't wish to take anything tax free from my LGPS pension.  

saucer

Silvertabby said:

Some LGPSs are using a new, more convoluted, formula, but there shouldn't be a huge difference.

Is it possible that the figures you have been given don't include the AVC?  In my day we didn't do retirement calcs including AVCs earlier than 6 months before retirement.  Or they have used the current AVC figure, not what you reckon it will be with another X months of contributions?  

I had thought that might be it, but the figures don’t work out. Ian (above) pointing out that (new) calculator helps insofar as it seems to show a change in how it is calculated, if not by much.

iantowelsh

The local authority that I work for, offered seminars and 121 session with My Money Matters (previously AVC Wise) and they used the same formula as Sarah mentioned above. 20 x £yearly pension value then divide by 3.

The seminars are available on their youtube channel. Sorry, I’m not allowed to post links.