Aggregation – Combining your LGPS Accounts

If you were entitled to a refund of contributions but you did not take it, and you later re-join the LGPS, we will automatically combine your earlier refund account with your later account. We will send you a confirmation letter when the aggregation process is complete. This is because you are no longer entitled to a refund when you start paying in again. If you take a refund, you are not entitled to, we will ask you to pay it back.

If your earlier LGPS account is deferred, you will have a decision to make about combining those deferred benefits with your new LGPS account. You won’t usually need to contact us if you want to investigate this. If aggregation is an option for you, we will write to you with your options soon after your new LGPS account is set up. You then need to complete the election form and return it to us. The deadline for deciding is 12 months after starting your new employment, or 12 months after ceasing your employment if you leave a concurrent post. If you are already over this deadline when we write to you, or you have since left your new employment, the deadline is 3 months after the date on the aggregation letter.

LGPS accounts can be combined in a few different ways depending on the dates of membership. For example, if both employments began after 1 April 2014 and there is not a five-year gap between them, it will simply be a case of moving one pot over to another without any impact on the value of your earlier deferred benefits. On the other hand, if your earlier deferred benefits include membership before 1 April 2014 (final salary benefits) the value of your deferred benefits may change if we combine them. We need to compare your pay in your old job with your pay in your later job to find out the impact. In some circumstances, combing LGPS accounts will work more like a transfer. You will be offered the chance to use your earlier deferred benefits to buy earned CARE pension in your later LGPS account. The options will be detailed on your letter, and each will have different considerations.

Working out your benefits in the LGPS

Working out your LGPS benefits depends on when you built up your service in the scheme.

For benefits built up from 1 April 2014 your pensionable pay is the amount of pay on which you pay your normal pension contributions. However if during the scheme year you had been on leave on reduced contractual pay or no pay due to sickness or injury, or had been on relevant child related leave or reserve forces service leave then, for the period of that leave, your pension is worked out based on your assumed pensionable pay.

The definition of final salary pay for benefits built up before 1 April 2014 remains the same as before the scheme changed from a final salary to a career average scheme on 1 April 2014.

Final salary pay is usually the pay in respect of (i.e. due for) the final year of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher. The main differences to the pay used for career average benefits include:

•  If you are working part-time when you leave the LGPS, or worked part-time at some point during your last year of membership, your final salary pay is the whole-time pay that you would have received if you had worked whole-time.

•  It does not include non-contractual overtime.

If deferred benefits include final salary membership (pension benefits built up before 1 April 2014) you may have the option of keeping the final salary link, even if you combine them. We will use a final salary figure in your later employment and compare it with the final salary figure that was used to calculate your deferred benefits. We will also include any cost-of-living adjustment, to ensure we are comparing like for like. Remember, the final pay, is not your actual take home pay. It is a full-time equivalent figure. The number of hours you work will not change this value.

There are some situations where aggregation is not possible. If you have a deferred benefit account because you opted out after 11 April 2015, you will not be able to combine that account with a later account. Under the scheme regulations, they must always be held separately.

Only deferred pension accounts can be aggregated. You cannot combine two accounts if they are both active and if you have an LGPS account where the pension is already in payment.

You can’t combine two LGPS accounts if you left both employments on the same day. If you join the LGPS again later, a new account will be set up for you and the two earlier accounts can be combined with the new account.

If you have multiple LGPS accounts that can be combined, we will investigate combining all of these. This could mean you receive more than one letter about combining LGPS accounts and they may arrive either together, or we may process them in a set order. You may choose to combine one and not another. On each occasion, you should read the letter thoroughly and consider each decision based on its own merits.

If you have a deferred benefit and two active accounts beginning on the same day, you will have the choice of which, if any, you want to combine your deferred benefits with.

It’s very important you inform us about LGPS accounts held with other funds. If you don’t tell us, we may give you the wrong options which can lead to delays and complications.

We will automatically aggregate your membership together but inform you that you have the right to keep separate benefits. If you are age 55 or over this means that you can elect for payment of this benefit immediately, albeit subject to usual early payment penalties. For those nearing age 55, you could also consider this in your pension plans for retirement, but anyone has this option, and it could be a medium to long term plan. To link to the 'TUPE transfers and aggregations' document, use the URL for the factsheets page.

It’s important that you act when you receive a letter about aggregating LGPS accounts. Your letter will explain to you that we will do if we don’t receive a response from you and this will depend one of the following two actions, this depends on your dates of membership.

•  Either the LGPS accounts will be held separately, and you won’t have the opportunity to investigate combining them again.

•  Or we will combine your LGPS accounts automatically under the regulations. Combining for some will mean earlier deferred benefits either increase or decrease.

If you decide not to aggregate, you cannot transfer the value of your deferred benefits to another pension scheme whilst you are still contributing to the LGPS or if you have less than one year to go before reaching your Normal Pension Age.