The Local Government Pension Scheme
(LGPS)
Highlights of the LGPS Tax-free cash - you have the option when you draw your pension to exchange
part of it for some tax-free cash.
The LGPS gives you: 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.
Secure benefits -
the scheme provides you with a future income,
independent of share prices and stock market
fluctuations.
At a low cost to you -
with tax-efficient savings.
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.
You can look forward to your
retirement with the LGPS with:-
A secure pension - worked out every scheme year
and added to your pension account. The pension
added to your account at the end of a scheme year
is, if you are in the main section of the scheme, an
amount equal to a 49 th of your pensionable pay in
that year. At the end of every scheme year the total
amount of pension in your account is adjusted to take
into account the cost of living (as currently measured
by the Consumer Prices Index (CPI)).
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Flexibility to pay more or less contributions - you can boost your pension
by paying more contributions, which you would get tax relief on. You also have
the option in the LGPS to pay half your normal contributions in return for half
your normal pension. This is known as the 50/50 section of the scheme and is
designed to help members stay in the scheme when times are financially tough.
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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 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.
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