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Cash Transfer Value of my deferred Local Government Pension
Jimbo911
Posts: 23 Forumite
Am 51 years of age. I am about to ask for a Cash Transfer Value of my deferred Local Government Pension to transfer whole sum into my Defined Contribution pension. Deferred value is £5000 with a lump sum of £10K. Any guesses on transfer value or calculations used?
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Comments
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The value of the benefits are bound to be more than £30,000 so you will have to consult an IFA with permissions for pension transfers.
The way that CETVs are calculated for LGPS is different from other schemes so you probably wont get a "good deal".
Is there any reason why you are planning this?0 -
The CETV won't be as much as you may be thinking. Forget the reports on these boards about CETVs of 40x or more - they are based on government gilts, whereas the LGPS transfer factors are set by GAD.0
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greenglide wrote: »Is there any reason why you are planning this?
I wish to retire at 55. I have a fairly good DC pot accumulating and wish to convert my DC pot into Income Drawdown The earliest I will be able to take my LG Pension is 60 (official age is 65) so I guess there will be a reduction for taking it at 60. I'm thinking of building a big pot as possible at 55 to enjoy. I have a disability which could affect my life expectancy. If I pop my clogs early, at least my family can share a nice tidy sum.0 -
Sorry to hear that. Is there any chance you could access your LGPS benefits on ill health grounds? As your benefits are deferred you wouldn't get any service enhancement, but your benefits could be paid before 55 and would be unreduced for early payment.I have a disability which could affect my life expectancy. If I pop my clogs early, at least my family can share a nice tidy sum.
If you do want to have a look at this option, you need to speak to your ex-employer (not the pension administrators) who would then make the necessary arrangements for a medical assessment.0 -
Silvertabby wrote: »Sorry to hear that. Is there any chance you could access your LGPS benefits on ill health grounds? As your benefits are deferred you wouldn't get any service enhancement, but your benefits could be paid before 55 and would be unreduced for early payment.
If you do want to have a look at this option, you need to speak to your ex-employer (not the pension administrators) who would then make the necessary arrangements for a medical assessment.
I've been paralysed for 20 years and worked for local government after my injury. From what I've heard, you've got to be dying to get your LG Pension early on ill health grounds. Unless my paralysis worsens or I get severe complications with my disability, I don't think I'll get any pension early. Apart from a few minor niggles, I am in the same condition now as I was when working for local government and don't wish anything to worsen for the sake of an early pension.0 -
Am 51 years of age. I am about to ask for a Cash Transfer Value of my deferred Local Government Pension to transfer whole sum into my Defined Contribution pension. Deferred value is £5000 with a lump sum of £10K. Any guesses on transfer value or calculations used?
As has been pointed out, CETVs for the LGPS are based on factors provided by the Government Actuary's Department rather than gilt yields. These are available online, but the calculations derived from them are somewhat complex and obscure - at least to me.
http://lgpslibrary.org/assets/actgui/ew/TransfersF20170309.pdf
Having recently requested a CETV for my LGPS pension at the age of 60, I can only say that I decided not to touch it with a barge pole.
Best you can do is request a CETV. It doesn't commit you to anything and the calculations used should be shown in the reply.
My CETV for an annual pension of 3.2K was 43K which would have netted me 36.5K after tax as I already have another pension in payment which fully utilises my annual allowance. The multiplication factors used at age 51 will be lower than in my example, somewhere around 11x annual income according to the GAD tables.0 -
I've read a couple of online articles which gives the following calculation of what your pension is worth, e.g. take the yearly pension, multiply it by 20, then add in your lump sum.
My deferred pension: £5000 * 20 + £10000 = £110000
Would this calculation be my transfer value?0 -
I've read a couple of online articles which gives the following calculation of what your pension is worth, e.g. take the yearly pension, multiply it by 20, then add in your lump sum.
My deferred pension: £5000 * 20 + £10000 = £110000
Would this calculation be my transfer value?
No, it would not be your transfer value, it is the calculation for determining the value of a DB pension for Life Time Allowance (LTA) purposes.0 -
Based on my figures/age I expect your will be about £70,0000
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This may help, but maybe not. I have a USS pension which is a DB scheme, I used to be in an LGPS scheme which was transferred into USS about 12 years ago. I have just got a CETV at the age of 47. Current annual pension is £11,753, lump sum is £35,260. They have given me a CETV of £253,328
So that is just over 18.5 times
£11,753 * 18.5543 + £35,260 = £253,3280
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