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    • pwootty
    • By pwootty 9th Mar 18, 3:02 PM
    • 11Posts
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    pwootty
    Partner Pension Review - Transfer to Local Gov
    • #1
    • 9th Mar 18, 3:02 PM
    Partner Pension Review - Transfer to Local Gov 9th Mar 18 at 3:02 PM
    Hi, I am reviewing my partner pensions as she has the ability to transfer them to her new local government pension scheme (LGPS). Looking for any pro/con of transferring them?

    The normal retirement age is 67, with the ability to take it early at a reduced rate so 10 years early = 38.8% reduction. She will be looking for early retirement of about 10 years.
    Also any increase is CPI which is currently 1% so not great.

    DC
    Fund Value £27k, LGPS offer £2,300pa

    DB
    CETV £23k, or £260pa LGPS offer £1,930pa

    She has another 2 DB pension, one is value over £30k and she will keep. Another is similar to the one above but still waiting for the LGPS value.
    Also she has another LGPS pension with another council so looking at pro/con of combining them both.

    Thanks in advance
Page 1
    • AlanP
    • By AlanP 9th Mar 18, 3:29 PM
    • 1,178 Posts
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    AlanP
    • #2
    • 9th Mar 18, 3:29 PM
    • #2
    • 9th Mar 18, 3:29 PM
    Current CPI is 2.7% not 1%, how does that compare to current pensions?

    DC fund has no automatic inflation increase so what about the DBs?

    LGPS offer for the DB transfer looks like a great deal compared to where it is now, surprisingly so in fact. Are they both based on paying out at 67? Note, be aware that the 67 can go up as it is actually linked to SP age in new CARE scheme.

    DC transfer looks like a good deal to me as well TBH, the £27k paid in will be repaid in annual pension over less than 10 years when allowing for CPI increases (based on NRA).

    Taking a DB pension early has a cost associated with it, LGPS reductions are not unreasonable.

    As to whether to combine that depends to an extent on salary when in old scheme and likely salary with new employer. If new is higher the pension will be worth more as (assuming it includes some pre-2014 service?) it is linked to Final Salary.

    The DB scheme being retained, what is the SRA for that? If it is 60 for example you could try and avoid taking the LGPS as early and reducing the impact.

    Take a look at LGPS AVC options as well. Have to be taken at same time as main benefits but can be taken as the Tax Free element.

    You haven't mentioned your partner's age. If she were 47 and wanted to retire at 57 those annual pension amounts will have increased by CPI each year along the way.
    • Happier Me
    • By Happier Me 9th Mar 18, 5:58 PM
    • 425 Posts
    • 923 Thanks
    Happier Me
    • #3
    • 9th Mar 18, 5:58 PM
    • #3
    • 9th Mar 18, 5:58 PM
    It's worth considering a transfer of her old LGPS if her salary is higher in her new role. In respect of her deferred LGPS was this the 2008 scheme or the 2014 scheme? Any pension built up before 31st March 2008 may have some protection under the 85 rule when your partner reaches 60 - if her age plus years service including any deferred years = 85 or more from 60 then my understanding is the 2008 scheme benefits will be paid unreduced. If this is transferred then she might lose this protection (something to do with not taking into account deferred years!)

    Hopefully an LGPS expert will be along to help me out/put me right!
    • Silvertabby
    • By Silvertabby 9th Mar 18, 7:10 PM
    • 2,731 Posts
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    Silvertabby
    • #4
    • 9th Mar 18, 7:10 PM
    • #4
    • 9th Mar 18, 7:10 PM
    It's worth considering a transfer of her old LGPS if her salary is higher in her new role. In respect of her deferred LGPS was this the 2008 scheme or the 2014 scheme? Any pension built up before 31st March 2008 may have some protection under the 85 rule when your partner reaches 60 - if her age plus years service including any deferred years = 85 or more from 60 then my understanding is the 2008 scheme benefits will be paid unreduced. If this is transferred then she might lose this protection (something to do with not taking into account deferred years!)

    Hopefully an LGPS expert will be along to help me out/put me right!
    Originally posted by Happier Me
    Depends on the date of the previous LGPS service.
    • pwootty
    • By pwootty 10th Mar 18, 12:35 PM
    • 11 Posts
    • 3 Thanks
    pwootty
    • #5
    • 10th Mar 18, 12:35 PM
    • #5
    • 10th Mar 18, 12:35 PM
    Thanks Alan, et al
    Not sure where your getting the 2.7% from as from their website CPI is set at 1% from April 2017. It!!!8217;s set every April for the year.c Would prefer it to be 2.7%!
    I thought both DC & DB transfer values look very good even taken early at the reduced rate?
    She joined her first LGPS pension in 2009 so outside of the 2008 scheme. I!!!8217;ll check both salaries.

    She has 3 other DB all set for SRA @ 60, planning to keep the larger one but the offer for the two smaller ones seems too goood to miss even taking account of the slightly higher increases.

    She is 51, unlikely that SRA will increase above 67 but you never know, also will check out AVCs too.
    Thanks
    • Silvertabby
    • By Silvertabby 10th Mar 18, 1:23 PM
    • 2,731 Posts
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    Silvertabby
    • #6
    • 10th Mar 18, 1:23 PM
    • #6
    • 10th Mar 18, 1:23 PM
    Not sure where your getting the 2.7% from as from their website CPI is set at 1% from April 2017.
    LGPS annual revaluation rate is CPI as at the end of the previous September.

    For April 2017 that was 1%, but for April 2018 it will be 3%

    Alan - are you looking at the CPIH rate instead of CPI?

    She joined her first LGPS pension in 2009
    So no R85 protections. Just need to compare salaries in this case.
    Last edited by Silvertabby; 10-03-2018 at 1:36 PM.
    • AlanP
    • By AlanP 10th Mar 18, 10:19 PM
    • 1,178 Posts
    • 850 Thanks
    AlanP
    • #7
    • 10th Mar 18, 10:19 PM
    • #7
    • 10th Mar 18, 10:19 PM
    LGPS annual revaluation rate is CPI as at the end of the previous September.

    For April 2017 that was 1%, but for April 2018 it will be 3%

    Alan - are you looking at the CPIH rate instead of CPI?
    Originally posted by Silvertabby
    Might have been that did come up in search results, thanks for clarifying September CPI. Adds the context I missed out on my post.
    • pwootty
    • By pwootty 11th Mar 18, 10:28 AM
    • 11 Posts
    • 3 Thanks
    pwootty
    • #8
    • 11th Mar 18, 10:28 AM
    • #8
    • 11th Mar 18, 10:28 AM
    Partner salary for first LGPS job was £38k prorate to £23k as she worked part time. Current salary is £35k so looks best to combine with current scheme?
    • Silvertabby
    • By Silvertabby 11th Mar 18, 11:43 AM
    • 2,731 Posts
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    Silvertabby
    • #9
    • 11th Mar 18, 11:43 AM
    • #9
    • 11th Mar 18, 11:43 AM
    Partner salary for first LGPS job was £38k prorate to £23k as she worked part time. Current salary is £35k so looks best to combine with current scheme?
    Originally posted by pwootty
    Not necessarily. The final salary link for pre 2014 service uses the whole time equivalent salary, with service being pro-rated for part timers.

    It's crystal ball time, I'm afraid - does your partner expect to be promoted in her current post, thereby taking her salary to over £38K? The value of her deferred benefits will increase with inflation so you'll need to take that into account as well.
    Last edited by Silvertabby; 11-03-2018 at 12:49 PM.
    • pwootty
    • By pwootty 11th Mar 18, 1:05 PM
    • 11 Posts
    • 3 Thanks
    pwootty
    Thanks Silvertabby,

    At this stage I don't think she will be looking for promotion. So the pre2014 will use the whole time eqv of £38k! Would they be able to confirm that?
    • Silvertabby
    • By Silvertabby 11th Mar 18, 1:30 PM
    • 2,731 Posts
    • 3,908 Thanks
    Silvertabby
    Thanks Silvertabby,

    At this stage I don't think she will be looking for promotion. So the pre2014 will use the whole time eqv of £38k! Would they be able to confirm that?
    Originally posted by pwootty
    It depends on how her LGPS operates. In the case of the one I worked for, just asking us to investigate a possible transfer in from another local authority wasn't enough to actually do it - we would obtain the details from the previous LGPS and then write to the pension member advising that their previous pension was based on a pensionable pay figure of £XX and asking if they still wanted to go ahead with the transfer.

    That said, I know changes have been made in the 2 years or so since I retired, so I would suggest that your partner speaks to her LGPS to discuss the current procedures.
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