DC to DB

WorldCitizen

My friend has a question.
He is young and just has three tiny DC pensions from previous employers - sums are 2.8 K (Smart Pension) , 1 K (NEST) and 2 K (Smart Pension).
Recently he started a new job in the council and received a letter stating that he has 12 months to transfer 'previous pension rights from a non-LGPS scheme' to this LGPS if interested.
The question is - 
can he transfer all three small pensions into LGPS? He is confused as it's not mentioned how many pensions he can transfer. And, for example, if you choose one - does he need to use the previous job's pension only or can he use the one with the biggest amount? 

dunstonh

can he transfer all three small pensions into LGPS? 

yes.........

Triumph13

It is probably a good idea to transfer at least one of them, just in case he leaves the new job in the first couple of years, as it locks in the ability to defer the LGPS pension, rather than having to take a refund of contributions or transfer out.

WorldCitizen

dunstonh
Triumph13
Thanks for your knowledgeable answers!

JoeCrystal

WorldCitizen said:

My friend has a question.
He is young and just has three tiny DC pensions from previous employers - sums are 2.8 K (Smart Pension) , 1 K (NEST) and 2 K (Smart Pension).
Recently he started a new job in the council and received a letter stating that he has 12 months to transfer 'previous pension rights from a non-LGPS scheme' to this LGPS if interested.
The question is - 
can he transfer all three small pensions into LGPS? He is confused as it's not mentioned how many pensions he can transfer. And, for example, if you choose one - does he need to use the previous job's pension only or can he use the one with the biggest amount? 

He should crack on with it and see what the quotes say for all three. He is fortunately getting an employer willing to allow transfers-in, as while it is no longer extremely generous, it is still generous in comparison. Especially if the transfers are done, he will be able to retain his deferred pensions. Make sure he fully understands what LGPS is and so on—reading information about it on his employer's website if any, as well as on the main LGPS website. And then he can laugh all the way to the banks knowing that he is within one of the best pension schemes in the country.,  

WorldCitizen

JoeCrystal
Actually he doesn't understand pensions at all,
I am trying to open his eyes with your help
thanks for this great forum and you - experts - giving info and shed light on unknown things!

I don't know what quotes could offer for the 5.8 K total of DC , it's very interesting.
I think he will start the process after reading this thread.

MallyGirl

The quotes will tell him what that transferred money will buy him e.g x extra years of entitlement.

Albermarle

WorldCitizen said:

JoeCrystal
Actually he doesn't understand pensions at all,
I am trying to open his eyes with your help
thanks for this great forum and you - experts - giving info and shed light on unknown things!

I don't know what quotes could offer for the 5.8 K total of DC , it's very interesting.
I think he will start the process after reading this thread.

Most people underestimate the value ( and cost) of a DB scheme that will give a guaranteed pension(like many NHS employees for example ).
So probably the amount of annual pension he will gain by transferring in these 3 pensions will not seem that much, but will still be worth it .

Andy_L

MallyGirl said:

The quotes will tell him what that transferred money will buy him e.g x extra years of entitlement.

IIRC under the new public sector schemes a transfer in buys you £x of pension rather than years of service.

The schemes are now career average rather than final salary so years of services no longer has any relevance

hugheskevi

Andy_L said:

MallyGirl said:

The quotes will tell him what that transferred money will buy him e.g x extra years of entitlement.

IIRC under the new public sector schemes a transfer in buys you £x of pension rather than years of service.

The schemes are now career average rather than final salary so years of services no longer has any relevance

That is correct is the vast majority of calculations, including transfers-in, but there are still some areas where years of service is relevant, the immediate one that springs to mind is the enhancement of pension for upper-tier ill-health. It is also important for exit payment calculations, although admittedly those payments are not pension. 

So I think saying years of service no longer has much relevance to pension calculations is more accurate than saying no longer has any relevance. 

It is a bit pedantic, admittedly, but the key thing is that members should ensure their service record is accurate as well as their pensionable earnings, and not ignore any service errors just because the pensionable earnings are accurate.