Private Vs LGPS

magwa

**Note....edited so as not to ask for advice but rather information.**

Hi Guys, I am looking for some information, please.
I began work in local CC, 15yrs in LGPS, then I had 6 yrs elsewhere with a Standard life plan as follows:
Group plan: Pension with profits £23,800 and Pension Millennium with profits £4,600
These have a transfer value of £25,900
Personal plan: Pension Mngd One £10,700
Transfer value £10,700

I have now been back in LGPS for 5 yrs.
My question is....Would it be better to transfer the Std Life funds into the LGPS
OR would it be more prudent to keep those eggs in different baskets?

Any info would be more than welcome.

CAE

Hello Magwa

If you have been back in the LGPS for 5 years you have missed the boat to transfer other pension rights from another pension scheme, as you only have 12 months from joining to opt to transfer, unless your employer allows you longer.

Here is a link to the relevant page on thr LGPS website

http://www.lgps.org.uk/contributing/transferring-to-lgps.html

magwa

Drat.

Thanks CAE.
Maybe I'll just leave them as a backup then!

magwa

Hi again, As it turns out the LGPS have sent me a form to apply for employers permission to go ahead and transfer, even this late after the 12 month limit. So can I ask CAE (or anyone, who has insight), would these Std Life funds be better left as a back up OR is the LGPS streets ahead of the game. additional detail....my 65th is 20yrs away

CAE

Hi Magwa

It may be that your enmployer allows transfers in after 12 months as a general rule, as it is at the discretion of the employer.

At this stage you should complete the form sent to you, which is basically a request to your pension provider, asking them to provide details of a transfer value, which is the amount of money they would be prepared to pay over to LGPS, and relinquish your rights in their scheme.

Once the transfer value has been received, the pensions section will calculate the membership credit and pension benefits that the transfer value will purchase in the LGPS.

You should then compare the benefits that would be available from the transfer with the pension benefits that would be paid by Standard Life. You have to make sure you compare like with like, and bear in mind that the LGPS values will be based on current salary. When you leave or retire your pension benefits will be based on your final pay for the last 365 days of employment, so the final benefits in 20 years will be higher than quoted. You would also need to consider how the Standard Life benefits would keep pace with inflation

Once you have all of the information it will be down to you to make your decision, but it may be quite clear then as to which way you should go with this. The amount of any actual transfer value could change on a daily basis which will affect the membership purchased from a transfer value.

As a matter of interest, what has happened to the LGPS pension from your initial 15 years of employment?

Hope this information is heplful

magwa

Hi CAE,
Yes your info is helpful thanks.

I left my LGPS 'deferred', and as far as I'm aware, when I rejoined , it simply continued.
Should I be questioning the LGPS on this?

The transfer value of Std Life Group plan Pension with profits £23,800 is guaranteed minimum 4% per yr, Not so on th Millennium £4,600.
I haven't found the details for the 'Pension Managed One' £10,700 yet.
I suppose that 4% guaranteed is safe.

My main question is.....bearing in mind, I could feasibly work for another 20 yrs in LGPS, ie reach the max 40yrs, and also have the Std Life funds as additional or backup.
Is the LGPS slightly/greatly better OR worse than the Std Life schemes I have?

Cheers

Retired_I.F.A.

Untill you know how many exta years the LGPS will credit you with for the transfer value no comparison can be made.
As it stands the best advice could be to transfer your retained benefits into the standard life or another personal pension. Just because the full cost of the LGPS scheme is not paid for by you it does not mean it's a better place for you to pay all the cost of those added years the transfer value will buy.

CAE

The maximum of 40 years membership in the LGPS at age 60 has been removed.

I am not able to say whether the Standard Life Schemes are better or worse than the LGPS. There are too many variables, and you would probably need an independent financial advisor to give assistance. The first thing to do is get the comparison figures on the transfer values from your LGPS pension administrators, and then you can compare the two sets of figures as mentioned earlier.

Are your deferred LGPS pension benefits with the same administering authority as your current employment? Amalgamating the two periods of pensionable employment is not automatic, and should normally be done within 12 months of rejoining (the same as for transfers). You should normally be asked whether you have previous pension benefits when you start employment. However, it is not always in your best interests to amalgamate deferred benefits with thse of a current employment. One of the things to consider is the full time equivalent salary in the two jobs, taking into account inflation on the first employment.

Retired IFA says quote 'As it stands the best advice could be to transfer your retained benefits into the standard life or another personal pension. Just because the full cost of the LGPS scheme is not paid for by you it does not mean it's a better place for you to pay all the cost of those added years the transfer value will buy.'

PLease note that very careful consideration should be given to transferring any deferred LGPS benefits to a personal pension. These benefits are currently being increased each year (3.9% April 2008).

As usual, there are more questions than answers!

Retired_I.F.A.

It does not matter what the rate of increase retained benefits increase by be it 3% p/a or 30% p/a as the transfer value will reflect it.

magwa

Thanks for the input CAE and RIFA,
I'm back with my original employer, and to be honest I thought it was only 'years in membership' that counted. I did notify the scheme of my return and the wish to continue with membership, and nothing was ever mentioned of other options available.
As for the thought of moving LGPS funds into a Private pension, I thought that LGPS /final salary schemes were the best to be had!!

As usual I find it hard to understand the questions nevermind the answers.
Cheers