Leaving
If you leave your job voluntarily before you are 65 years of age then you can choose one of the following options:
- A refund of contributions if your qualifying service is less than three months
- An early retirement pension if you are aged 60 or older
- A deferred pension
- A transfer to another approved pension arrangement
If you are made redundant before you are 65 years of age then you can alternatively choose:
- An early retirement pension payable from the day after leaving if you are aged 50 or older and are made redundant before 31st March 2010, or you are aged 55 or older and are made redundant after 30th March 2010
Deferred pensions
If you are no longer employed by one of the participating employers but have chosen to leave your benefits in the Fund, your pension is known as a deferred pension.
The amount of deferred pension is calculated as 1/80 x pensionable service before 1st April 2008 x final pensionable pay, plus 1/60 x pensionable service after 31st March 2008 x final pensionable pay.
In addition a deferred lump sum is calculated as 3/80 x pensionable service before 1st April 2008 x final pensionable pay.
The scheme’s normal retirement age is 65 and you usually take your pension then but you may be able to take it from age 60. Your pension may be reduced if taken before age 65.
You will need to ensure that you keep the Fund office advised of your current address and contact us at least three months before you reach age 65. At that time, you will need to decide whether to claim your pension from age 65 or to defer it. If you defer your pension past age 65 it is increased for late retirement. This increase is in addition to annual pension increases which are also applied to your pension.
Transferring out
You can transfer the value of your pension benefits to another approved pension such as a:
· New employer's scheme
· Personal pension
· Stakeholder pension.
You can choose to transfer at any time before you take your retirement benefits, up to the date that you attain age 64.
The transfer value is the cash equivalent of your deferred pension. This amount will be paid to your new pension provider, who will advise you of the benefits you get by making the transfer. The amount paid is calculated by the Trustees on the advice of the actuary.
If you enter employment which gives you the right to rejoin the Local Government Pension Scheme before you have begun to receive your pension benefits, you may elect to transfer your accrued pensionable service on a day for day basis.
Refund of contributions
If you have less than three months' pensionable service, and have not transferred any other benefits into the Local Government Pension Scheme, you can choose a refund of your own contributions.
As a member of the Fund, you are contracted out of the State Second Pension (S2P) and pay National Insurance contributions at a reduced rate. If you choose a refund it will be necessary to reinstate you into the S2P and a statutory deduction is made from your contributions as your share of the cost.
As your contributions are deducted from your salary before tax has been taken, HM Revenue & Customs reclaims some of that tax at a special rate, currently 20 per cent. This is also deducted from your refund of contributions.
The employer's contributions cannot be refunded.