LGPS

alpineflyer

Hi
I am currently in the WM LGPS.  I would like to retire this year (age 64) but I am totally confused by the information I am being given regarding the LGPS regarding what my annual pension would be.  I understand that I will have a penalty for early leaving but the figures given seem to change whenever I contact them. I am told I have to hand in my resignation before the process of calculation can begin.  I have used the calculator on their website which gives totally different results to when I speak to them.  Do I have to take 40% lump some or can I take less to increase my monthly income?  Also can my employer refuse to allow me to take my pension early.  I am a little confused.

Silvertabby

Your employer can't stop you from retiring and taking your pension benefits.

As for early payment reductions, when did you join the LGPS?

daveyjp

Depending on your length of membership the figures will change as every day you work your membership increases and this affects the pension payment. LGPS therefore need a proposed date of retirement to undertake an accurate calculation.

Also bear in mind if you plan to retire after April it needs to take into account any pay increase.

The quote should include options for the lump sum.  Either increase and reduce annual pension, or use it to buy extra annual pension.

Silvertabby

daveyjp said:

Depending on your length of membership the figures will change as every day you work your membership increases and this affects the pension payment. LGPS therefore need a proposed date of retirement to undertake an accurate calculation.

Also bear in mind if you plan to retire after April it needs to take into account any pay increase.

The quote should include options for the lump sum.  Either increase and reduce annual pension, or use it to buy extra annual pension.

The LGPS doesn't currently offer inverse commutation (giving up all or part of an automatic lump sum in return for a larger pension).  Just the option to increase the lump sum at the p. poor rate of 1:12.


Only pre 2008 accruals include an automatic lump sum, with different NRAs attached to pre 2008(with R85)/pre 2014/post 2014 accruals.  Will have a better idea of what's what when OP posts their date of joining.

alpineflyer

Hi I joined the pension fund in 2004.  I was told by an WMPF operative that I would need to hand in my resignation before the accurate pension could be given by my employer. This seems chicken and egg because I would need make an informed decision on whether my pension would be sufficient before handing in my resignation.  Previous  conversation with different operative stated when asked, that the figure I was given would allow me to make an informed decision?  I am confused as to whether the figures given are before or after a 13.5% penalty has been applied for early retirement.  Sorry very confused.

Silvertabby

2004 to 31 March 2008.  No (or very minimal) reductions for early payment due to R85 (depends on exact date of joining and DOB).

1 April 2008 to 31 March 2014.  Reduced for early payment before NRA/65.

1 April 2014 to date of leaving.  Reduced for early payment before NRA/SPA/66.

Automatic lump sum will be in respect of pre 2008 service only, but could commute further by giving up some of the annual pension in return for a one-off lump sum (but at a p. poor rate of 1:12).

In my day, we would happily run full estimates based on current/estimated pay for someone thinking about leaving in the next 6 months.  But that was before Covid/McCloud so I can understand LGPSs referring members to the on-line calculators instead of running manual estimates.

As long as you put the correct information into the on-line calculator, it should be fairly accurate.  If the 13.5% total early reduction factor (which sounds a LITTLE high, but not impossible) is a problem, could you work on until 65?  That way, only your post 2014 would be reduced (by one year) so the overall reduction should at least be less than 5%.  Plus another year of pension accrual.

alpineflyer

Hi
Thanks for the response.  I could work until 67 however I am in Adult Education ( on NJC not teaching contract) and would like to retire early.  I used the WMPF  calculator (which after discussion found that I had used the wrong option early leaver not normal retirement. I since found out that this did not include the reduction so gave a false figure.  Speaking to someone from WMPF yesterday  they said they used a different calculator (LGPS) however this relies on inputting information from the WMPF calculator.  I applied for figures for VR  from my employer(which was refused)  The pension figures my HR/pension dept gave were totally different.  I hope you can see why I am confused. I used my intended leaving date for the calculations.

alpineflyer

I have just gone 64 and anticipated leaving at the end of this academic year (August)

Silvertabby

alpineflyer said:

Hi
Thanks for the response.  I could work until 67 however I am in Adult Education ( on NJC not teaching contract) and would like to retire early.  I used the WMPF  calculator (which after discussion found that I had used the wrong option early leaver not normal retirement. I since found out that this did not include the reduction so gave a false figure.  Speaking to someone from WMPF yesterday  they said they used a different calculator (LGPS) however this relies on inputting information from the WMPF calculator.  I applied for figures for VR  from my employer(which was refused)  The pension figures my HR/pension dept gave were totally different.  I hope you can see why I am confused. I used my intended leaving date for the calculations.

By VR do you mean Voluntary Redundancy?  Because that explains it - by asking for a VR estimate, no reductions for early payment will have been applied, as your employer would have to pay the difference between your pension being paid reduced or unreduced.  Hence, presumably, their refusal to your request.

Your employer can't stop you from leaving on Voluntary Retirement any time you want.  They don't have to pay strain costs, as your benefits would be reduced for early payment.

Umm... is this a case of getting the two VRs mixed up?

alpineflyer

Hi 
I applied for Voluntary Redundancy.  I was informed that it was refused on the grounds that they need the teaching hours and would not be able to fill them as the post/hours would be removed and unable to re employ a replacement  This was before my decision to possibly resign. That figure difference I now understand thank you.  There is still a discrepancy between the figures that WMPF have given me on speaking to different persons though. I think I will need to contact them again to clarify.  Thank you.