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LGPS and Redundancy
GDW
Posted: 18 March 2018 10:18:35(UTC)
#1

Joined: 18/03/2018(UTC)
Posts: 1

Forgive me if this is the wrong forum or it has been covered already, but I am struggling to get my head around how this works.

My basic question is: I am 56, I have exactly 20 years paying into the LGPS. My current pension value is around 7000 annual, my projected benefits at normal pension age are around 14000.

So I am told that with redundancy there is no actuarial reduction to the pension, what does this mean? If I finish now as a result of redundancy, will I get around 7000 annual pension, or will I get around 14000 annual pension or something else altogether.

Many thanks
Redundant (Old Timer?)
Posted: 19 March 2018 14:12:12(UTC)
#2

Joined: 07/01/2010(UTC)
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Normally on redundancy if you are over 55 you can take your pension then without the usual actuarial reduction of x% for each year of early retirement. Thus you will get the current value £7K p.a.

Of course you could leave it until normal retirement date (NRD), but I suspect as you will have not been contributing for some years all you will get is £7K plus inflation increases at NRD.

Just my understanding, but your employer should be able to confirm this.
Tom Woods
Posted: 24 April 2018 14:47:46(UTC)
#3

Joined: 20/04/2018(UTC)
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I agree with Redundant (Old Timer?)

My wife took voluntary redundancy from a London council last June at age 57. She worked as admin support in a local school which was trying to save money. She received a lump sum, and a small monthly pension based on the time she had worked at the school. As she's worked for the council in various other jobs over the past 30 years, she will receive several more small pensions/lump sums as she reaches the designated retirement ages from those posts.
xcity
Posted: 24 April 2018 15:27:49(UTC)
#4

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GDW;58910 wrote:
My basic question is: I am 56, I have exactly 20 years paying into the LGPS. My current pension value is around 7000 annual, my projected benefits at normal pension age are around 14000.

So I am told that with redundancy there is no actuarial reduction to the pension, what does this mean?

You need to check the details with them.
If you have achieved 7k through 20 years of contributing, you would not normally expect to double to 14k by normal pension age (65, 66, 67 ?).
This suggests that the current value may be after the usual actuarial reduction (which arises because you would be collecting the pension for longer and paying in less).
Mr J
Posted: 24 April 2018 19:58:26(UTC)
#5

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I didn’t know what LGPS was, but googling immediately shows its the Local Government Pension Scheme and there is a website...
https://www.lgpsmember.org/index.php

I would think you should really read up on the website and speak to your pension officer/department directly.

I think you may need to understand/explain exactly what those figures you give actually represent. I am in a different scheme, but my pension statement gives a number of different figures:

*The actual pension I would get if I retired immediately.
*The pension I have currently accrued to date if paid at normal retirement date. I.e. If I left the employer immediately and did something else like a different job until the normal retirement date then this is the amount I would start to receive as pension at the normal retirement date based on the years I was working and contributing into the scheme.
*The pension I am projected to get at normal retirement date if I continue to work and pay into the scheme until normal retirement.

I don’t know which of these correspond to the £7000 and £14000 figures you quote.
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Tim D on 24/04/2018(UTC)
Apostate
Posted: 24 April 2018 20:35:42(UTC)
#6

Joined: 02/04/2018(UTC)
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Stop working now it's £7000 plus annual inflation at whatever age you are currently due to start receiving your pension (which could be 65 depending on when you joined the LGPS).
Tom Woods
Posted: 24 April 2018 21:10:30(UTC)
#7

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"Stop working now it's £7000 plus annual inflation at whatever age you are currently due to start receiving your pension (which could be 65 depending on when you joined the LGPS)."

So as you're over 55 you should be able to take the £7k annual pension now. But as others have pointed out, it is likely to be 'actuarially reduced' - ie reduced by a set formula - approx 5% per year until your normal retirement age - 65? - to compensate for having it paid earlier.

If your normal retirement age from the Scheme is 65, and you take your actuarially reduced pension at 56 the maths looks like this : 65 - 56 = 9 x 5% = 45% so your pension, should you take it now, is likely to be approx £3,850 pa. And if you leave it where it is and don't take it until you are 65, it'll be the full £7k, plus annual uplifts in line with CPI - so say 2% pa for 9 years would give you a pension of approx £8,300 pa at 65.

But you need to take advice. Write to your LGPS administrators and ask them for the figures, and then you can hopefully work out what you want to do.
1 user thanked Tom Woods for this post.
Mickey on 25/04/2018(UTC)
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