LGPS transfer question

itsmecathy

Apologies as I know this question comes up regularly but I would welcome your thoughts. 

I have LGPS membership from 1995 to 2024 (some gaps due to time out and maternity leave but all joined together). I have approx 9 years pre 2008 and 4 year pre 2014, the rest CARE. I changed jobs in 2024 and moved straight to another job with LGPS pension, both in Scotland.

I'm 56 and intend to retire in 4 years age 60 and take one/possibly both pensions even with reduction. It's possible I may leave this job in 2 years, and leave the pension deferred till 60.

My current role is about £1000 per year higher salary than the final salary for my last one, and will increase another couple of thousand by age 60. 

I am thinking NOT to combine pensions, due to the rule of 85/earlier retirement age with my old pension. Redundancy is unlikely. Ill health retirement I suppose a possibility but no indication of that being necessary currently.

Any thoughts on my best option? Thanks in advance.

Silvertabby

Have you checked your R85 figures?

Had your 1995 to 2024 been continuous, then those years plus deferred membership to age 60 would count.

But it depends on your gaps - when one or more LGPS records are joined together, the gaps don't count towards R85.

itsmecathy

Thanks Tabbycar. No I haven't. Do I just ask my old pension provider that question? I've counted up the service that counts and it adds to 23 years  and 128 days so maybe I don't have r85 protection after all.

 If I joined the 2 pensions would my years in my new pension count to r85? 

Silvertabby

If you have 23 years and 128 days excluding the gaps, then your deferred membership between 2024 and age 60 will tip you well over.

Note:  LGPS Scotland rules aren't always exactly the same as LGPS England and Wales, but it may be that as you have a gap of less than 5 years and that as your new post is on a reasonably higher salary, your new LGPS will automatically amalgamate your benefits unless you opt to keep them seperate.

itsmecathy

Thanks Silver tabby (sorry for getting your name wrong!), good to hear that my deferred membership counts.

I have asked them NOT to automatically amalgamate but was checking if that seems the better option.

Silvertabby

itsmecathy said:

Thanks Silver tabby (sorry for getting your name wrong!), good to hear that my deferred membership counts.

I have asked them NOT to automatically amalgamate but was checking if that seems the better option.

There are pros and cons for either option 

Leave deferred:
Take from 60 (with post 2008 accruals being reduced for early payment) while continuing to work in your current post.

Join:
Pre 2014 final salary calculations will be based on your new, higher, salary.
If you are made redundant, then you would be able to access all of your benefits under favourable redundancy terms.

itsmecathy

Just a follow up question - if I join the 2 pensions together for the higher final salary link, can I still take the combined pension at 60 with the pre 2008 part unreduced (due to R85)? If so, this seems better option. 

If I retire at 60 I would be leaving local government completely.Thank you so much for any thoughts.

Silvertabby

itsmecathy said:

Just a follow up question - if I join the 2 pensions together for the higher final salary link, can I still take the combined pension at 60 with the pre 2008 part unreduced (due to R85)? If so, this seems better option. 

If I retire at 60 I would be leaving local government completely.Thank you so much for any thoughts.

Only if you do leave your job.  You wouldn't be able to take your earlier benefits and carry on working/paying into the scheme once your benefits had been combined.

But, if your intention is to retire from Local Government at 60, then that makes combining an even more attractive option, due to the higher salary lift.  

Remember that the gap between 2024 and starting your new post won't count towards R85, but with just over 23 years under your belt you have time before 60 to get there (25 years reckonable membership plus 60 = 85)

itsmecathy

Thank you  Silvertabby, I really appreciate your patience and expertise. I will let them know that I want to combine