Pension estimate

Pipkin1812

I am in the LGPS, since 1983, and hoping to retire in next few months. I had an estimate for December 2024 for when I turned 60. McCloud does not appear to have been addressed as the career average bit of the estimate goes from 2014 onwards. If the 2015-22 position is moved back into 1/60ths part (final salary) how are the early retirement factors applied to this bit, I have protected age of 65 for 1/60ths whereas CARE is 67? Also whilst the difference in pure money terms is not massive (I have worked part time for all of this period) if the money is added to the final salary element would this increase my automatic lump sum. I hope this makes sense, I hope someone might be able to throw some light on the matter. Thanks 

Silvertabby

Any possible change in NRA is just one of the factors to be considered when deciding to switch or not. 

Your automatic lump sum won't change, as that is linked to your pre 2008 accruals only (1/80th plus automatic lump sum of 3 X pension). 

Pipkin1812

Thanks @Silvertabby. Is the pension fund required to give you quotes on both options before you make your decision?

AlanP_2

Pipkin1812 said:

Thanks @Silvertabby. Is the pension fund required to give you quotes on both options before you make your decision?

I doubt it, but they should be reviewing each one and contacting the pensioner from what i understand.

What I mean by this for me is that I retired a couple of years ago and am getting my LGPS without any McCloud impact. The scheme is working through the implications and the calculations and sending out "impact statements" in the latter part of this year.

My wife took a deferred LGPS pension in last year and that is in the same position. She is taking a 2nd one in a few months so it will be of academic interest to see is McCloud is considered there before it comes into payment.

Marcon

Lengthy but pretty clear explanation of the whole issue here: https://www.lgpsmember.org/mccloud-remedy/what-is-the-mccloud-remedy/

Silvertabby

Pipkin1812 said:

Thanks @Silvertabby. Is the pension fund required to give you quotes on both options before you make your decision?

I retired before McCloud, but my understanding is that the LGPS are largely treating the ruling as an extension of the original underpin.

ie, when CARE was introduced in April 2014, retirees born before April 1957 (plus other criteria) had two calculations carried out.  One using the final salary rules only, and the other based on final salary to 31 March 2014 and CARE from 1April to date of leaving.  We then just paid the higher amount, rather than sending the two quotes to the member, and asking if they wanted the lower or higher pension.

That said, I'm aware that McCloud has extra complications, such as having to account for previous (unaggregated) public sector pension fund membership, but it does seem that the LGPS will largely continue to carry out the two calculations and then just pay the higher of the two.  Perhaps @Lemondrizzle (current LGPS administrator) can confirm?

On the subject of McCloud and those of us  already retired, our check calculations will take years to complete because (quite rightly) those coming up to retirement will take precedent over those of already in receipt of our pensions.  In theory, I will be one of them, but I don't expect any uplift as I qualified for the original underpin.  In my case, the one with the CARE element was the higher due to the increase in the accrual rate, from 1/60th to 1/49th.  I suspect that most recent 'underpinned' LGPS retirees won't see any further 'McCloud' increases to their pensions.

Pipkin1812

Some helpful comments here, thank you. I’ve been trying to work out the potential difference but I suspect as you say @Silvertabby there won’t be much in it due to the higher accrual rate of CARE. However as I worked part-time across the relevant period I’m not sure whether this will have any bearing on the matter?

Silvertabby

Pipkin1812 said:

Some helpful comments here, thank you. I’ve been trying to work out the potential difference but I suspect as you say @Silvertabby there won’t be much in it due to the higher accrual rate of CARE. However as I worked part-time across the relevant period I’m not sure whether this will have any bearing on the matter?

No.  There are two definitions of pensionable pay in the LGPS.  Final salary, in which the salary used is the whole (full) time equivalent contractual salary, but the service is pro rata.  ie, after working 18.5 hours per week for 12 months the salary used would be the full time rate, but the service accrued would be 6 months instead of the calendar year.

The CARE element is then calculated using the actual pay, including any non-contractual overtime, etc.  Service isn't a factor.

Working part time will result in a lower pension than if you had always been full time because you will have accrued less service (final salary) and/or been paid less (CARE) but that has always been the case and McCloud won't have any bearing on that.