prairiechicken

I have a worry, raised by my father in law. He thinks that if we move to Canada, my husband's final salary pension with the local authority scheme will cease to be index linked immediately. Is this really the case? Surely that would just be downright unfair?

He stopped working for local government two years ago, but isn't due to retire for at least 10 years.

I know that the state pension does not increase from the date you start taking it, but wasn't aware of any issues with local authority pension schemes stopping being index linked, and thought that this was only an issue with state pensions from the date you retire, NOT the date you emigrate.

Hubby is going to find a way to check it here, just wondered if anyone here knew or knew where to find information. Might set my mind at rest if I knew asap.

Plus, if what my father in law thinks is correct, then we won't be able to emigrate. Full stop. Which is scaring me a little.

Thanks all

Collie

I think you're right - my pension is from the Universities Superannuation Scheme and it goes up regularly... You need to check the fine print with your pension provider, I think! Exchange rate fluctuations are perhaps more of a concern, as this quantitative easing malarky will presumably devalue the pound against the dollar all other things being equal...

JonboyE

So do I, but as you say, there is no substitute to reading the scheme rules.

Another option, which also gets around the foreign exchange exposure, is to transfer the pension to a Canadian provider. However, this will mean transferring out of a final salary and into a money purchase scheme. The OP should take proper advice before considering this.

BTJ

I'm a trainee actuary, so it is my job to calculate pension increases in order to quote a transfer value. I have never done this for a Local Government Scheme, however for all the private DB schemes I have dealt with there has been no difference in revaluation between members based on their location.

But yeah, just have a check on the Scheme Rules.

And although I'm certainly not qualified to give advice, I can't imagine many scenarios where you'd benefit from transferring out of a DB Scheme and into a DC Scheme.

mjwalker007

Any state pension that you would receive would not be index linked if you moved to Canada, but this should not be the case if you have a final salary scheme with the local authority.

Since your husband left the scheme 2 years ago it will be classed as a deferred pension which unfortunately since the Conservative Govt came into power have changed the way these schemes will be annually increased to take into account the effects of inflation.

Public sector schemes in deferment used to be revalued in line with RPI ( retail price index) but the Govt changed the rules and going forward any increases and revaluation of deferred pensions would be based on CPI (consumer price index ) and not RPI............doesnt sound a massive change, but the effect on public sector pensions will mean that historically RPI has grown at a higher rate than CPI.....therefore meaning the growth of a persons deferred pension may be heavily affected by this change. Estimations have found that this could reduce the value of a public sector pension by upwards of 15% over the long term.

http://www.guardian.co.uk/money/2012...ensions-appeal

http://www.cspa.co.uk/

britsnake

I have a couple of Local Authority pensions and they are still index linked and so go up each year.

They send me a statement every year to let me know the value of my pension.

Something to be aware of is that the lump sum will be taxable in Canada as will any pension you receive.

You will also be at the mercy of the changing exchange rates.

Of course the rules around index linking can change at any time as it has in the past, but that would just effect future increases.

prairiechicken

Thank you everyone, that's really helpful

My husband is going to speak to someone today regarding his particular scheme but I'm feeling much reassured by the advice given on here, thanks.