Local government pension scheme

[Dntknow]

can anyone explain it to me please? part time 15 hours a week, how much will i be paying? and how much will my employer pay towards it?
i don't understand nothing of this 😅 will i lose much money per month?
and wondering which is better nest or lgps?
thank you

I currently contribute 6.5% but the percentage may vary depending on earnings, so you may find yours is less. Or there are ways you can pay extra.
My employer contributes about 3 times as much.

Ok so that means if let's say i pay the same 6.5% as you, my employer would be paying 19.5%? that's amazing

Our local council pays 23% (sister works there). Join the pension and any extra you have - put it in the pension 😀

LGPS is better than Nest - it's a defined benefit scheme. How much you pay will probably depend on your role but it is not much considering the value of the benefit. Do NOT be tempted to opt out even if money is tight in the short run.

The employer contribution rate isn't material to you for that reason (you get the same benefit irrespective and the actual rate of employee contributions will vary dependingon the funding position of the scheme) but the rate they tell you just gives an idea of how good a pension it is!

Both your employer and the scheme should provide you with access to training and education materials. I did have to remind my employer at my exit interview that they had done nothing to provide their lgps employees with education. They admitted that wasn't deliberate, but an oversight, but really truthfully the employer should always provide some sort of information for you as an employee to understand the pension schemes.

The contribution rates are here: https://www.lgpsmember.org/your-pension/the-essentials/your-contributions/

Find the band that your pay falls into and that will give you your contribution rate. There’s information on that site as well about how the pension builds up.

You should be aware that as well as building up pension there’s death in service cover - if you pass away while employed there would be a lump sum payable of 3x your pay.

It’s a really valuable scheme to be in.

Your local authority/county should have a website that provides LGPS info. Take a look on there. If you decide to opt out you should be able to get your first 3 months contributions back. But like others have said, it's a great scheme.

Just realised typo in my post - the actual rate of employER contributions vary depending on funding position. Employee contributions stay the same.

What your employer pays into the pension scheme has no bearing on what you get at retirement. It's all calculated on what you have paid into the scheme.

It’s a 1/49 scheme. Which means that each year of service 1/49 of your salary is your pension

say you earn 49,000

each year 1/49 of that is your pension so £1000

you stay in the scheme for 15 years so your pension is £15000 a year

it’s adjusted according to inflation etc

what you put in and your employer puts in does not reflect what you get out at the end. You don’t have a “pot”

it’s a brilliant scheme

I get what you mean, but the actual employee contributions have no bearing either as it's a defined benefit scheme. Benefits are based on career average salary and service length multiplied by the relevant accrual rate (often 1/60 per year but it may be different for the LGPS. Members should be given all the relevant details when they start work).

right ok, what i want to understand is if what my employer puts in the scheme doesn't matter what is the benefit of that? it's still only my money contributions then, i thought it was really good if they contributed towards it

So the reason it doesn't matter is because it doesn't affect what you get out.

It's indicative of how good the scheme is (because it tells you approximately how expensive it is to run) but it doesn't define how good it is.

So the way I would think about it is say you earn 24,500 a year. That means your pension per year is going to go up by £500. Now that doesn't sound like loads, but given it's all inflation adjusted, in a normal defined contribution scheme you'd have to contribute about £10k between you and your employer to achieve that.

So it really is an excellent scheme. (That's working in the 1/49th given earlier).

@Janbluesuary

I worked and got it for 8 years I was then earning 15,500 a year.

Are you able to tell me what I can expect from it?

It's a brilliant scheme,,much better than nest which is only based on what you put in. I was in a LA scheme 25 years ago for about 3 years at about 18yo and I'll still get about £1k per year from that.

This. The employer contribution doesn't matter from your perspective because they have to pay in whatever it takes to provide your promised benefits (which is a LOT more than what employees are asked to pay).

It really depends on when you were working (as it changed from final salary to care). You might have a mixture of both schemes. It's worth checking if who you were working for has an online portal. Some of the online portals allow you to make a estimate of how much you will get when you retire or see your annual benefit statement which will give you an idea.

About 4 years ago it finished

Why don't you ask the scheme administrators for an estimate rather than an anonymous person on Mumsnet?...

@MostHighlyFlavoredGravy thank you for your valuable input.
That could be said of nearly every single question on mn.
I find people explain things in different ways.
It's an extremely complicated subject pensions.
I've met with the person doing the pension years ago and I remember she couldn't give me an estimate of what I would get.
So I asked on here because some posters seem to get it and maybe able to explain it in a way that's simple to understand.

I hope that explains things for you.

I have provided valuable input to the OP upthread. You have not provided PP with anything like enough information to be able to provide you with reliable information about your pension (as you say, it's complicated). Posters may be able to provide information that seems simple to understand, but you have no way of knowing if it's correct.

The scheme administrators should be able to give you an estimate (or if you have already left the scheme you should have been sent a document called a deferred benefit statement - if you don'thave this then request a further copy. It will give you a summary of your entitlement).

Unfortunately pension estimates do have to be calculated. There isn't a magic button that shows us how much you will get.

I personally would check if there is a portal for your fund and register with it. Hopefully it will show you what you are looking for.

Nobody ever believes it but employee contributions are really only a token amount.

As well as the employer's pension contribution (19.5%) , the Council (or whoever) will also be paying all the expenses of running the scheme plus the insurance premiums for the death-in-service benefits.

It could be they are paying more like 25% of your salary towards your pension, OP.

To the OP: as a defined benefit scheme, what you get relates to the defined benefit rather than exactly what is paid in. However, as pp and the link show, the scheme is worth about 4 (or more) times as much as you pay in - the councils are covering three times as much as you do. You get a really really good deal for a small percentage of your pay, and as the link shows, the lower your pay the lower the percentage. Plus the death in service benefits.
When I moved jobs from a LGPS one to another role, I thought I needed 25 to 30% extra just to cover the difference in pension and annual leave.

To another pp, my old employer has a helpful web portal I can log into to see a prediction of what my LGPS pension will be paying out. Can you find that for yours?

Just be aware that pension payouts depend on your salary and length of service. A lot of the figures that get touted on here are things like full time, £40k salary, 20 years service.

I was a dinner lady for 6 years... now retired - £7.65 a month. My "gold plated local authority pension" as my BIL calls it...