Local government pension scheme

Iwishiwereamillionaire · 2022-09-17T07:01:17+00:00

I’ve recently started a new job in a school as an office administrator. I’m paid over 12 months but I’m off in the school holidays. So whilst I don’t get loads I have the benefit of being with my children every school holiday. I was looking at my first payslip and I’m not sure I’m reading it right…it looks like the LGPS contribution by my employer is 25% whilst mine is only 5.8% 25% seems very high, although obviously I’m delighted, does anyone know if I can match it or at least increase my contribution as I’ve not paid into one for 11 years so I’m trying to make up the shortfall as I’m 41. I’ve not had any documentation yet so I wondered if this is standard across LGPS?

Wafflefudge · 17/09/2022 08:07

You can buy extra pension. You'd need to look at the LGPS website for more info. They have a calculator etc.
I've never seen the employer contribution on the payslip for LGPS before, but yes employer contributions are high as its defined benefit they have to contribute enough.

DancingDonkeys · 17/09/2022 08:10

The LGPS is a defined benefit pension, so I think normally the amounts contributed by the employer exceed those of the employee (although I have no idea on exact percentages).

If you want to contribute more, you can either start a pot of money like a defined contribution pension to go along side it, or you can buy more annual pension- for this one they have a calculator somewhere which says if you want to buy £100 more annual pension- per year it will cost you X as a lump sum or Y as a monthly contribution split over so many years. I've copied the link below that explains it properly (hopefully it's worked).

www.lgpsmember.org/your-pension/paying-in/paying-more/

Original poster

Iwishiwereamillionaire · 17/09/2022 08:14

Thank you so much, this is very helpful!

OP posts:

Original poster

Iwishiwereamillionaire · 17/09/2022 09:01

I’m assuming it is the contribution on as it says LGPS … I’ve attached a screenshot I’ve edited as it has the school abbreviation so a bit identifying!

mum bot very good a understanding pensions, it’s definitely something I’m working on

OP posts:

Bunnycat101 · 18/09/2022 03:03

The employer contribution is basically irrelevant for a public sector defined benefit scheme. The thing that you need to Understand is your accrual rate and how much benefit you’re getting each year and from then. You can contribute more through your own private SIPP or look at the range of options provided by the LGPS.

JamMakingWannaBe · 18/09/2022 03:46

You have two options - or you can do both:

Additional Voluntary Contributions (AVCs). You can pay extra to "top up" your Local Government pension - the amount you receive at State Pension Age. If you were to die before SPA these additional contributions are lost and cannot be passed on to a beneficiary. Benefits are guaranteed and index linked.

Additional Pension Contributions (APCs). You pay into a fund more like a private sector pension with an organisation like Prudential. You are basically buying stocks and shares. These track the stock market so the final value is not guaranteed. You can access the funds from age 55 (rising to 57) so useful if you are looking to retire early. If you were to die, the value would be passed to any beneficiaries.

Polkadotties · 20/09/2022 19:05

JamMakingWannaBe · 18/09/2022 03:46

You have two options - or you can do both:

Additional Voluntary Contributions (AVCs). You can pay extra to "top up" your Local Government pension - the amount you receive at State Pension Age. If you were to die before SPA these additional contributions are lost and cannot be passed on to a beneficiary. Benefits are guaranteed and index linked.

Additional Pension Contributions (APCs). You pay into a fund more like a private sector pension with an organisation like Prudential. You are basically buying stocks and shares. These track the stock market so the final value is not guaranteed. You can access the funds from age 55 (rising to 57) so useful if you are looking to retire early. If you were to die, the value would be passed to any beneficiaries.

You’ve got your APCs and AVCs mixed up.
APCs do not provide any spouses pension whether that’s death in service or retirement

ethelredonagoodday · 22/09/2022 11:11

Interested in this as I'm in the LGPS, but starting to take a bit more interest now I'm getting towards my mid 40s. Interested in particular in the additional contributions options.

Polkadotties · 22/09/2022 16:05

ethelredonagoodday · 22/09/2022 11:11

Interested in this as I'm in the LGPS, but starting to take a bit more interest now I'm getting towards my mid 40s. Interested in particular in the additional contributions options.

Have a look at the LGPS member website, the APC modeller is on there. The younger you are when you start the cheaper it will be

FrownedUpon · 22/09/2022 16:19

JamMakingWannaBe · 18/09/2022 03:46

You have two options - or you can do both:

Additional Voluntary Contributions (AVCs). You can pay extra to "top up" your Local Government pension - the amount you receive at State Pension Age. If you were to die before SPA these additional contributions are lost and cannot be passed on to a beneficiary. Benefits are guaranteed and index linked.

Additional Pension Contributions (APCs). You pay into a fund more like a private sector pension with an organisation like Prudential. You are basically buying stocks and shares. These track the stock market so the final value is not guaranteed. You can access the funds from age 55 (rising to 57) so useful if you are looking to retire early. If you were to die, the value would be passed to any beneficiaries.

These are the wrong way round. I make APC’s so I’ll get a larger pension when I retire. It also saves me tax as the extra money comes out of my wage before tax is taken.

As a PP said, it’s actually irrelevant to you how much your employer puts in, as you’re not building up a pot of money. The amount you’ll receive at pension age is based on your salary and how many years you work there.

Oblahdeeoblahdoe · 20/11/2022 13:15

Agree with above posts re AVCs and APCs, do your homework and take advice. Are you working for an academy? They may be showing the costs to them to make a point but as others have said it's not a pot of money like other pensions. I certainly never had employer's contributions shown during many years of working in education and local government.