Advice on transferring small LGPS pension

BMJT · 25 April 2018 at 9:25AM

Hi all,

I recently left a job with Bristol City Council, which was only around 18 months in length, and have been contacted by the LGPS to ask me what to do with the small pot I have built up with them. Through speaking with them I only have two options, which are to either take a refund of a few hundred pounds or transfer the full amount elsewhere. For simplicity's sake, I was initially hoping to just defer it, but because I was paying into it for less than 2 years apparently I cannot do that.

I have been looking into transferring it elsewhere, but have come across a couple of stumbling blocks, firstly because the amount is so low (i'm guessing around 1k) I can't seem to find any firms that will allow me to transfer it in, the minimum seems to be around 10k. Secondly, some places simply will not accept it, such as PensionBee, i'm guessing due to the fact it is a defined benefit scheme.

Does anyone know somewhere I could potentially transfer this to, or is it simply not worth the hassle and should I just take the refund?

Any and all advice welcome. Thanks!

Silvertabby · 25 April 2018 at 9:53AM

If you were to take the refund, it would be your contributions only less tax. Your employer's contributions, which could have been as much as 3 x yours, would be forfeited.

The transfer value, however, is calculated on your notional pension benefits, and will be way higher than the refund you have been offered.

Have you asked for a transfer value? You won't need financial advice for the transfer, as you don't have a DB pension per se.

Does your current employer have a pension scheme you can transfer it into?

BMJT · 25 April 2018 at 9:58AM

Yeah i'm certainly more interested in a transfer for that reason, would be a shame to lose the additional value.

I have inquired about a transfer value and was told there is a 10-12 week backlog!

To provide an update on this, I have just live-chatted PensionBee and apparently this can be done, but it's not 100% foolproof. I have started the transfer process on their end and will let my LGPS know. Fingers crossed it goes through.

Edit: Oh and just to answer your final question (I didn't spot it first time round), I'm currently self-employed, hence why i'm looking to set up a personal pension.

Brynsam · 25 April 2018 at 10:28AM

Actually there is a third option - you can defer taking a decision for up to 5 years, so if you think you might re-join the LGPS, wait a bit. https://www.lgpsmember.org/tol/thinking-leaving-before.php

Given the above, the backlog of 10-12 weeks is a bit annoying but no big deal - you'll still have plenty of time to arrange the transfer.

BMJT · 25 April 2018 at 10:34AM

Thanks for that Brynsam, I hadn't spotted that. When I emailed the LGPS to ask them if I could defer they told me it wasn't possible because I hadn't hit the 2-year limit, why on earth they didn't mention I couldn't do what you're saying instead I do not know, you'd think that would be helpful to mention. These people don't seem the easiest to work with.

GunJack · 25 April 2018 at 11:30AM

BMJT wrote: »

Thanks for that Brynsam, I hadn't spotted that. When I emailed the LGPS to ask them if I could defer they told me it wasn't possible because I hadn't hit the 2-year limit, why on earth they didn't mention I couldn't do what you're saying instead I do not know, you'd think that would be helpful to mention. These people don't seem the easiest to work with.

Because deferring the pension is totally different to deferring the decision on what to do with the pension, IYSWIM, and some of the staff involved may not be fully clued-up on that option.

p00hsticks · 25 April 2018 at 12:21PM

I was in a rather similar position, although with a slightly larger transfer value and with the Civil Service rather than the LGPS. I set up a personal pension with AVIVA and they handled the transfer from the Civil Service for me.

BMJT · 25 April 2018 at 12:23PM

GunJack wrote: »

Because deferring the pension is totally different to deferring the decision on what to do with the pension, IYSWIM, and some of the staff involved may not be fully clued-up on that option.

I see what you mean, but I don't think it's that much of a leap given what I'd been saying to them. I was essentially saying I was having trouble finding a solution and wanted to leave things as they are. I'd expect them to be a bit more clued up than a punter like me so could suggest alternatives, or could help me get to my general goal, rather than just bluntly saying no you can't do that. (I mean someone on this forum had the thought in a few minutes)

Also if you saw the form they sent me I think you'd understand the general confusion/likelihood of mixing up terminology on my end. They didn't explain what deferring benefits means, nor even mention the option of deferring the decision, and started calling them preserved benefits at one point. When you've never come across pensions before it's all a bit greek.

Advice on transferring small LGPS pension

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