We believe that it is vitally important to ensure members fully understand the value of benefits they would be giving up if they opt out of the pension scheme. However before we cover opting opt, have you considered the 50/50 option?
During your membership of the LGPS there may be times when you are in a difficult position financially and are looking for ways to save money.
The LGPS now offers you the flexibility to stay in the Scheme and continue to build up valuable pension benefits. You can elect to pay half your normal contributions and build up half your normal pension. This is known as the 50/50 section of the LGPS.
If you are still considering opting out, look at what you’ll miss out on!
The LGPS is a nationwide scheme and with 3.5 million members, it is one of the largest public sector pension schemes in the UK.
The scheme is a valuable part of the pay and reward package for employees working in local government or working for other employers participating in the scheme. It is heavily subsidised by your employer and is often viewed as one of the most valuable financial rewards of the job.
The LGPS gives you:
You can look forward to your retirement with the LGPS with:
Secure benefits –
the scheme provides you with a future income, independent of share prices and stock market fluctuations.
At a low cost to you –
tax relief on all your contributions, with the flexibility to pay more or less.
And your employer pays in too –
the scheme is provided by your employer who meets the balance of the cost of providing your benefits in the LGPS.
Tax-free cash –
you have the option when you draw your pension to exchange part of it for some tax-free cash.
Peace of mind –
your family enjoys financial security, with immediate life cover and a pension for your spouse, civil partner or eligible cohabiting partner and eligible children in the event of your death in service. If you ever become seriously ill and you've met the 2 years vesting period, you could receive immediate ill health benefits.
Freedom to choose when to take your pension –
you do not need to have reached your Normal Pension Age in order to take your pension as, once you've met the 2 years vesting period, you can choose to retire and draw your pension at any time between age 55 and 75. Your Normal Pension Age is simply the age you can retire and take the pension you've built up in full. However, if you choose to take your pension before your Normal Pension Age it will normally be reduced, as it's being paid earlier. If you take it later than your Normal Pension Age it's increased because it's being paid later.
Redundancy and Efficiency Retirement –
if you are made redundant or retired in the interests of business efficiency at or after age 55 you will, provided you've met the 2 years vesting period, receive immediate payment of the main benefits you've built up (but there would be a reduction for early payment of any additional pension you have chosen to buy).
Flexible retirement –
if you reduce your hours or move to a less senior position at or after age 55 you can, provided your employer agrees, and you've met the 2 years vesting period, draw some or all of the benefits you have already built up, helping you ease into retirement, although your benefits may be reduced for early payment.
Optants Out and Aggregation of Benefits
If you became entitled to a Preserved Benefit on or after 11th April 2015 as a result of opting out of the Scheme in an employment (other than a concurrent employment) and subsequently re-join the LGPS, you will not have the right to aggregate the two periods of membership.
If you are still thinking of opting out and would like to discuss this with a member of staff, please contact 01226 772923.
Alternatively, proceed to the opt out form »