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Warwickshire County Council. Warwickshire County Council Pension Fund Annual Meeting 2013. Cake or Crumbs. Frank Harding Pensions Officer Warwickshire County Council 28 November 2013. Warwickshire County Council. Ingredients. Auto enrolment includes ...

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cake or crumbs

Warwickshire County Council

Warwickshire County CouncilPension Fund Annual Meeting 2013

Cake or Crumbs

Frank Harding

Pensions Officer

Warwickshire County Council

28 November 2013

slide2

Warwickshire County Council

Ingredients

Auto enrolment includes ...

People with significant service – who wish they had joined sooner

People approaching retirement – who wonder whether it’s worth joining

People who want to delay joining – for another 3 years at least

Delayed membership of the LGPS affect pensions but ...

What do the numbers look like ?

How do pensions compare with final salaries ?

Local Government Earnings Survey 2012/13 ...

32%

earn below £15,000

35%

earn between £15,000 and £21,000

30%

earn between £21,000 and £42,000

3%

earn over £42,000

Imagine the LGPS CARE scheme for 3 people retiring at 66 ...

Alex starts work on £12,000 and finishes on £15,000

Billie starts work on £12,000 and finishes on £21,000

Chris starts work on £12,000 and finishes on £42,000

slide3

Warwickshire County Council

The cake shrinks

( LGPS CARE scheme and constant prices )

Chris’s pension could be

£32,200 compared to a

final salary of £42,000

Billie’s pension could be

£21,900 compared to a

final salary of £21,000

Alex’s pension could be

£19,000 compared to a

final salary of £15,000

Pensions converge on the

Basic State Pension of £5,740

slide4

Warwickshire County Council

Some have cherries others have crumbs of comfort

Joining LGPS

at 18

Joining LGPS

at 38

Joining LGPS

at 58

Pension

£19,000

Alex Final Salary £15,000

Pension % Joining LGPS at

Final Salary 18 38 58

LGPS 88%54%16%

State 38% 38% 38%

Combined 126% 92%54%

Pension

£13,800

Pension

£8,200

Pension

£21,900

Billie Final Salary £21,000

Pension % Joining LGPS at

Final Salary 18 38 58

LGPS 77%50%16%

State 27% 27% 27%

Combined 104% 77%43%

Pension

£16,300

Pension

£9,100

Chris Final Salary £42,000

Pension % Joining LGPS atFinal Salary 18 38 58

LGPS 63%45%15%

State 14% 14% 14%

Combined 77% 59%29%

Pension

£32,200

Pension

£24,800

Pension

£12,200

slide5

Warwickshire County Council

You can’t have your cake and eat it

Joining LGPS

at 18

Joining LGPS

at 38

Joining LGPS

at 58

Alex Final Salary £15,000

Joining Salary

Contributions

Missed contributions

£12,000

£10 per week 4.40% after tax

None

£13,300

£11 per week 4.40% after tax

38%

£14,600

£13 per week 4.64% after tax

81%

£11,100

£23,800

Nil

Billie Final Salary £21,000

Joining Salary

Contributions

Missed contributions

£12,000

£10 per week 4.40% after tax

None

£15,800

£14 per week 4.64% after tax

35%

£19,700

£17 per week 4.64% after tax

79%

£12,600

£29,000

Nil

Chris Final Salary £42,000

Joining Salary

Contributions

Missed contributions

£12,000

£10 per week 4.40% after tax

None

£24,800

£25 per week 5.20% after tax

26%

£37,500

£39 per week 5.44% after tax

74%

Nil

£17,300

£49,800

slide6

Warwickshire County Council

Summary

Better sooner than later

Better later than never

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