LGPS - stop paying in?

[absolutelyflawed]

My salary is going to decrease next year ( slightly less hours plus a different role which is covered by a different pension scheme)
Should I stop paying into it now so that my pension when I take it is higher? IE so that it is based upon my current salary..
TIA

Lgps is not based on final salary now and hasn't been since around 2014 I think . It's career average now so better to stay in . Your employer contributions are worth a lot

How old are you now?

My OH left the Teacher's scheme in similar circumstances after DD was born. Biggest mistake we ever made. Pension of £600/month would have been 3 times that if we'd stayed in.

Can you access illustrations of what your pension would be at 66/7 (assuming that's pension age) if you (a) freeze it as of now or (b) continue paying in.

That said, when the Civil Service Scheme was Final Salary, I had a colleague who had previously been a 'High Flyer' before jacking it in to study law. Eventually returned to the fold at EO grade and opted out so as not to reduce his pension.

How old are you and when did you join the scheme?

When did you join?

The LGPS now is career average, so you accrue pension each year based on your pay in that year. Therefore a drop in pay has no impact on any of the career average pension already built up.

If you joined before April 2014 then you will have some final salary benefits which might be affected. However there are protections built in to protect your benefits when pay drops. See the ‘protections if your pay is reduced’ section here: https://www.lgpsmember.org/your-pension/paying-in/how-your-pension-is-worked-out/

These protections can go back up to 13 years so if you will be retiring within that timescale then you will still get the benefit of your higher pay.

If you will be retiring later than that then you need to think about what your salary might do in future - if you’re likely to get promotions etc then it’s worth staying in as your pay will overtake.

And think very carefully anyway about opting out. If you opt out you lose benefits like 3x pay death in service lump sum, enhanced pensions if you have to retire early on ill health, and enhanced pensions for your dependants if you die. Plus your employer won’t pay into any other arrangement for you so you would lose their contributions.

This seems very unwise. Get proper financial advice before leaving/stopping payments.

And I’ve just realised that the reason your salary is decreasing is because you’re going part time. The final salary (pre 2014) pension is always calculated using full time equivalent pay so going part time won’t affect this at all. So definitely don’t opt out!!

If things are tight you can do a temporary 50/50 arrangement as well so you only pay half of your normal contributions for a while. I'd definitely stay in - it's one of the very few "perks" that local gov staff have

Thank you - I was not a member before 2014.

I will probably only work for local govt for 3 more years - and they is why I cannot get my head around whether it is better to stop paying in now ( whilst I’m earning more).

Or whether the 1/98 for 3 more years ( I’m doing 50/50) will make up for the lower salary.. 🙃
Thank you- I’m a single parent and trying to weigh up everything up.

NO!!!

its one of the best pensions out there, don’t not pay in.

No, don’t opt out. The post-2014 version of the scheme is career average which means that you build up pension each year based on your pay in that year, so pay dropping has no effect on anything already built up. Even in the 50/50 section the amount of pension you build up will be way more than you pay in (when you take into account that it could be in payment for 20+ years). And as mentioned above remember the benefits like death in service, ill health enhancement etc, which you still get in full even when you’re in the 50/50 section.

As a single parent you would frankly be stupid to opt out and lose your death in service benefits

This is one of the best pensions about, you'd be a fool to stop paying in.

It's your last couple of years - drop the contributions if you want but it's not so much the employee contributions, it's the employer contributions that will add the most value to it.

I'm paying into the Civil Service Pension at a rate of 4.60%... my employer pays in 27.1%!

No don't come out of it.

It has generous death in service benefits, if you came out of the scheme your death benefits would be significantly lower than if you were still in the scheme.

Every day in the pension fund counts towards your pension. As you say, you will be on a different pension scheme next year so keep paying into the LGPS for as long as you can.

Going part time/reducing hours will not have a detrimental effect on the pension benefits you have already accrued.

That not how LGPS works anymore. It's a career average scheme, so what you've "earned" based on your current salary is already banked. Keep paying in if you possibly can.

Wrong. Amount of contributions paid have no bearing on the pension paid. The only thing which will affect it is switching to the 50-50 section.