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    • Joey Soap
    • By Joey Soap 5th Jul 18, 1:21 PM
    • 192Posts
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    Joey Soap
    Another LGPS possible transfer out?
    • #1
    • 5th Jul 18, 1:21 PM
    Another LGPS possible transfer out? 5th Jul 18 at 1:21 PM
    Good afternoon all. Mrs Soap has stopped working a couple of months ago. She is 57 and intends not to work again due to caring commitments. She has a deferred LGPS pension that will pay 4.4k a year plus a 5k lump sum at age 67. Ten years away. A recent poster suggested his wife of a similar age may take her transfer value into a SIPP. I think this is worth at least enquiring about to see what the transfer value would be for Mrs Soap. I know private sector transfer value is often in excess of 30x the benefit. But I suspect the LGPS will be far less generous? We are at the thinking stage and Mrs Soap's LGPS is a nice to have rather than an essential source of income. But - does anyone have experience of typical LGPS transfer values?

    Thanks.
Page 1
    • GunJack
    • By GunJack 5th Jul 18, 1:47 PM
    • 10,433 Posts
    • 7,813 Thanks
    GunJack
    • #2
    • 5th Jul 18, 1:47 PM
    • #2
    • 5th Jul 18, 1:47 PM
    Set by GAD and a lot less than 30x... one of the LGPS experts should gve you a more accurate idea...
    ......Gettin' There, Wherever There is......
    • chiefie
    • By chiefie 5th Jul 18, 2:43 PM
    • 338 Posts
    • 344 Thanks
    chiefie
    • #3
    • 5th Jul 18, 2:43 PM
    • #3
    • 5th Jul 18, 2:43 PM
    There is a bad formula but despite everything I can!!!8217;t fathom it. It felt like a level brain surgery trying to do it !!!55357;!!!56839;!!!55357;!!!56881;
    • Silvertabby
    • By Silvertabby 5th Jul 18, 9:05 PM
    • 3,438 Posts
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    Silvertabby
    • #4
    • 5th Jul 18, 9:05 PM
    • #4
    • 5th Jul 18, 9:05 PM
    A lot of factors apply in the calculation - age, dates of service, NRA, marital status etc etc.

    Impossible for me to even guess - but I'm prepared to say that it will be a lot less than 30x.

    The only way to get an accurate figure would be to ask your LGPS for a transfer value.
    Last edited by Silvertabby; 05-07-2018 at 9:08 PM.
    • Joey Soap
    • By Joey Soap 5th Jul 18, 9:08 PM
    • 192 Posts
    • 69 Thanks
    Joey Soap
    • #5
    • 5th Jul 18, 9:08 PM
    • #5
    • 5th Jul 18, 9:08 PM
    A lot of factors apply in the calculation - age, dates of service, NRA, marital status etc etc.

    Impossible for me to even guess - but I'm prepared to say that it will be a lot less then 30x.

    The only way to get an accurate figure would be to ask your LGPS for a transfer value.
    Originally posted by Silvertabby
    For an accurate figure, quite agree. That is the only way. Mrs Soap is asking since she just got her statement. Really, just wondering what other people's experience was in similar-ish circumstances.
    • OldBeanz
    • By OldBeanz 5th Jul 18, 11:33 PM
    • 775 Posts
    • 610 Thanks
    OldBeanz
    • #6
    • 5th Jul 18, 11:33 PM
    • #6
    • 5th Jul 18, 11:33 PM
    I would hope that anyone who uses this forum knows that if you pay into an AVC with the LGPS it is close on the worst pension to transfer out of. The OP's wife could have another 29k from taxable income in an AVC to draw in cash tax free. Outside the emergency services and the forces (for obvious reasons) and MPs it must be the best going. Hence why few will have applied.
    As for the OP, assuming your wife is going to get a full state pension (and you should be checking this) then the LGPS pension will mean she will pay no or little income tax. The LGPS annual pension is sitting at a sweet spot. Ensuring the wife max's out her tax free allowance every year is one of our targets.
    • Silvertabby
    • By Silvertabby 6th Jul 18, 10:12 AM
    • 3,438 Posts
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    Silvertabby
    • #7
    • 6th Jul 18, 10:12 AM
    • #7
    • 6th Jul 18, 10:12 AM
    OldBeanz - you'd be amazed at the number of people who actually do transfer out of the LGPS.

    When the 'Pension Freedoms' were first announced, even though they didn't apply to DB schemes, the LGPS were swamped with calls from people - both current members as well as deferred - ringing 'about the new rules'. After explaining that they would first have to transfer their benefits into a private scheme/SIPP, and what they would be giving up, many still wanted to go ahead on the grounds that 'the money would be better off in their account rather than the Council's' or 'it's my money - I need it now for a wedding/holiday/new car'.

    It was even worse after 2015, when most other public sector schemes stopped transfers into DC schemes. The myriad pensions advice cold callers then targetted LGPS members - and hit bullseye (for them) in far too many cases.
    • Joey Soap
    • By Joey Soap 6th Jul 18, 10:18 AM
    • 192 Posts
    • 69 Thanks
    Joey Soap
    • #8
    • 6th Jul 18, 10:18 AM
    • #8
    • 6th Jul 18, 10:18 AM
    Thanks for the thoughts. To clarify, this is a "nice to have" pension, not an essential one. It "might" be useful to access it at age 57 rather than wait another 10 years. The best way "might" be to use the money in a SIPP. Or, it may not be. At a transfer value of 25x benefits, it would be attractive to take the benefit now as a 4% draw down rather than wait. Whether that would be offered seems in doubt. We'll see when we get the transfer value offer.
    • Silvertabby
    • By Silvertabby 6th Jul 18, 1:33 PM
    • 3,438 Posts
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    Silvertabby
    • #9
    • 6th Jul 18, 1:33 PM
    • #9
    • 6th Jul 18, 1:33 PM
    Thanks for the thoughts. To clarify, this is a "nice to have" pension, not an essential one. It "might" be useful to access it at age 57 rather than wait another 10 years. The best way "might" be to use the money in a SIPP. Or, it may not be. At a transfer value of 25x benefits, it would be attractive to take the benefit now as a 4% draw down rather than wait. Whether that would be offered seems in doubt. We'll see when we get the transfer value offer.
    Originally posted by Joey Soap

    Once you get the transfer valuation, compare that 4% draw down with taking the (actuarily reduced) pension now. Just so you have all of your options...
    • rangersfc
    • By rangersfc 6th Jul 18, 1:41 PM
    • 60 Posts
    • 25 Thanks
    rangersfc
    Hello Joey Soap,
    I have seen a recent quote for a transfer from LGPS. The CETV was circa 10(ten) times annual pension.
    Regards
    Billy
    • Joey Soap
    • By Joey Soap 6th Jul 18, 1:56 PM
    • 192 Posts
    • 69 Thanks
    Joey Soap
    Ouch! Thanks.
    • Joey Soap
    • By Joey Soap 6th Jul 18, 2:00 PM
    • 192 Posts
    • 69 Thanks
    Joey Soap
    Sorry, I don't seem able to quote on my phone. A transfer of 25x at a 4% draw down is the same income now as you BV would get waiting for ten years and taking the LGPS income, ignoring inflation etc.. It seems very unlikely I will get a quote of 25x so it would not be very attractive. Certainly, 10x would be a complete none starter.

    Thanks again.

    Soap.
    • rangersfc
    • By rangersfc 6th Jul 18, 2:10 PM
    • 60 Posts
    • 25 Thanks
    rangersfc
    Hello again Joey,
    For your interest, and it may not be relevant, the details
    for the above CETV as follows...... Female: age 61: 11 years service: 12 hours per week: lowest pay band.
    I do not have quote to hand but it was definitely down towards 10 x.
    Billy
    • Joey Soap
    • By Joey Soap 6th Jul 18, 2:12 PM
    • 192 Posts
    • 69 Thanks
    Joey Soap
    Thanks for that. Mrs Soap is 57. She worked 28 hours a week for about fifteen years. We are asking for a transfer value now and an early payment at 60 in three years time.
    • Deneb
    • By Deneb 7th Jul 18, 12:33 PM
    • 345 Posts
    • 272 Thanks
    Deneb
    My LGPS CETV at age 60 was approximately 14 times the estimate of my deferred pension at 66, and about 19 times the value of my actual pension taken at age 61. It is also a "nice to have" pension and not critical to my retirement planning or income. I nevertheless took the view that I would have been mad to transfer out, but opted for early payment of the pension on the basis that the reduction is basically cost neutral over the period of payment based on average life expectancy, and the current payments are more use to me now than deferring it until I am also in receipt of my state pension.

    Incidentally the LTA calculation exceeded the CETV in both cases.
    • Joey Soap
    • By Joey Soap 7th Jul 18, 1:09 PM
    • 192 Posts
    • 69 Thanks
    Joey Soap
    My LGPS CETV at age 60 was approximately 14 times the estimate of my deferred pension at 66, and about 19 times the value of my actual pension taken at age 61. It is also a "nice to have" pension and not critical to my retirement planning or income. I nevertheless took the view that I would have been mad to transfer out, but opted for early payment of the pension on the basis that the reduction is basically cost neutral over the period of payment based on average life expectancy, and the current payments are more use to me now than deferring it until I am also in receipt of my state pension.

    Incidentally the LTA calculation exceeded the CETV in both cases.
    Originally posted by Deneb
    Thanks. Without jumping the gun, but it seems more likely than not, if we do anything, it will be early payment in three years at age 60 rather than a transfer or a ten year wait.
    • Silvertabby
    • By Silvertabby 7th Jul 18, 1:34 PM
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    Silvertabby
    Incidentally the LTA calculation exceeded the CETV in both cases. Originally posted by

    Deneb

    That's normal - LTA for all is a standard 20x pension plus any automatic lump sum, whereas the CETV calculation is subject to many factors.
    • Deneb
    • By Deneb 8th Jul 18, 10:48 AM
    • 345 Posts
    • 272 Thanks
    Deneb
    That's normal - LTA for all is a standard 20x pension plus any automatic lump sum, whereas the CETV calculation is subject to many factors.
    Originally posted by Silvertabby
    I know, but I thought it worth making the point for anyone expecting a 30x-plus CETV from an LGPS pension.
    • Silvertabby
    • By Silvertabby 8th Jul 18, 11:00 AM
    • 3,438 Posts
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    Silvertabby
    I know, but I thought it worth making the point for anyone expecting a 30x-plus CETV from an LGPS pension.
    Originally posted by Deneb

    In their dreams - but people still do it !
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