Council Pension

[Hair Bear]

I’m writing this on behalf of a friend who has recently gone his separate ways from a council-employed job of many years.

 

 

The last 36 years of that job he was paying into the “works” pension plan, and whatever he contributed, his employer, the council, paid the same (lately he was paying £120 a month).

 

 

He was planning to retire in six months, age 55, as this was when he could take payments from his pension.

 

 

However, the council decided to off hire him in advance

– not literally, but by telling him his job was no longer available and that he would have to do another (one that was wholly unsuited to him).

 

 

The “settlement agreement” was much less than what it would have been in six months, but more concerning to him is his upcoming monthly pension.

 

 

He says that the council’s solicitor told him that although once he hits 55 he will get regular payments on his pension, these will be based only on his contributions.

 

 

The contributions made by his employer, the council, will be null and void, despite their having matched his payments for years. Is this right?

[dx100uk]

rubbish

 

 

you mean superannuation

or more correct LGPS

 

 

he need to speak wit their pensions dept

 

 

could he be thinking that because he took a lesser job his final salary dictates his pension..thats not true.

[Hair Bear]

Thanks for replying.

Yes, superannation/LGPS.

 

He says that after speaking with their solicitor

he spoke on the phone to two different people on two separate occasions in the relevant pension department,

 

both of whom confirmed he would get payments based only on his personal contributions.

 

(The pension aside, he also said that once he turned down the other role he was forced to sign some document that said he couldn't speak about that council, and that if he didn't sign it he wouldn't get a settlement.)

 

What should his next move be, please?

 

Thanks again.

[dx100uk]

not a compromise agreement was it?

 

 

they cant just make 30yrs of their contributions vanish!!

[ericsbrother]

If he takes his pension at 55 and he wasnt made redundant or ill-health retired then his pension will be actuarily reduced by quite a large amount.

 

 

His pension scheme is a final salary scheme so he will have 30 years qualifying contributions and that will pay out as a normal pension something like 36/60th of his final salary.

 

 

That may well be knocked back by something like 40% for taking it early.

His alternative is to wait until he is 60/65 and draw the pension as of right without any reduction.

 

It looks as though by not accpting a move in his work he has screwed himself, if he moved and stuck it out he could have gone with a better deal ie no actuarial reduction as he would be going at their request, not his.

 

As for the pension being based on his contributions

I think there is a misunderstanding as to what that means.

 

 

He should have been given a document that spells out exactly what he would receive if going at 55, 60 or any other age under various circumstances relevant to his position.

 

The last bit is a confidentiality clause, a normal thing for a settlement like this.

 

 

It does beg the question why he didnt take advice before chucking his job in?

Im sure the union would have negotiated a deal for him as it would be in their members interests even if he wasnt a member.

 

All too late for that but the pension bit need looking into.

The employers pension dept will provide the projections if asked and then he will know what option suits him best and he will understand what he has been offered better regarding how the contributionas are made up. his qualifying salary, etc.

Edited March 22, 2017 by dx100uk

[Hair Bear]

Thank you ericsbrother & dx100uk

 

He says he did approach his union.

 

They told him that even if he took the other unsuitable job and tried to retire once he was eligible for his pension at 55

- in what would have been six months

- he would still be left with the same compromise agreement.

 

They did say that they would help him get the best deal possible

"but then did nothing".

 

when the deadline for signing the compromise agreement arrived,

he says that since the union has reneged on their promise to help him get the best deal, and the council's solicitor telling him that not signing would leave him in a much worse position, he signed.

 

On your advise, he has now contacted the pensions department and they are sending him a written breakdown, which I will post. Thanks.

[ericsbrother]

Well, the advice from the union was terrible and completely untrue.

 

However as he has done what he has done then the best he can hope for now is an understanding of what he is entitled to and at what date as there will undoubtedly be an actuarial reduction if he takes the money at 55.

 

He may be better off waiting for the pension and taking another job for 5 years if he can.

If not he can work in any job that isn't part of the same pension scheme and take the pension offered as well.

 

That will allow him to accrue more pension from the new job when he finally hangs his boots up for good

[dx100uk]

Still don't understand why the councils 30yrs of lgps contributions can be wiped out

Something's not right here

 

I happened to hear from my LGPS lot

I asked them about this

They said rubbish by the govt law they cannot wipe that out

Its written in stone

 

And neither can a compromise agreement negate it

 

That's the whole point of the scheme!!

Joint accrual.

 

The only way would be if he previously opted out

And the money is now elsewhere

[ericsbrother]

It wont have been, the person the OP is trying to help is clearly not understanding what has gone on and that is then passed on to us to try and work out for ourselves and that advice is then given back and the person cannot comprehend the advice because they have an image of something totally different in their mind.

 

Hopefully when the pension calculation arrives it will become clearer but OP can you please take the paperwork from the person and put it up here exactly as it is written rather than posting up your friends interpretation of what it says..

[ericsbrother]

absolute silence, any chance you can tell su what has gone on since?