The Scheme
This guide is a short description of the conditions of membership and main
scheme benefits that apply if you pay into the LGPS on or after 1 st April 2014.
What kind of scheme is it?
The LGPS is a tax approved, defined benefit occupational pension scheme which
was set up under the Superannuation Act 1972 (but, in the future, scheme rules will
be made under the Public Service Pension Schemes Act 2013). The LGPS was
contracted out of the State Second Pension scheme (S2P) until 5 th April 2016; from 6 th
April 2016 the ‘contracted out’ status ceased to exist for all pension schemes due to
the introduction of the single tier State Pension. The LGPS meets the government’s
standards under the automatic enrolment provisions of the Pensions Act 2008. The
amount of pension you earn in a scheme year is worked out each year and added
to your pension account. The total amount of pension in your pension account is
revalued at the end of each scheme year so your pension keeps up with the cost of
living. The LGPS is very secure because the benefits are set out in law.
Who can join?
The LGPS covers employees working in local government and for other
organisations that have chosen to participate in it. To be able to join the LGPS
you need to be under age 75 and work for an employer that offers membership
of the scheme. If you are employed by a designating body, such as a town or
parish council, or by a non-local government organisation which participates in
the LGPS (an admission body), you can only join if your employer nominates
you for membership of the scheme. Police officers, operational firefighters and,
in general, teachers and employees eligible to join another statutory pension
scheme (such as the NHS Pension Scheme) are not allowed to join the LGPS.
If you start a job in which you are eligible for membership of the LGPS you will
be brought into the scheme, if your contract of employment is for 3 months or
more. If it is for less than 3 months and you are, or during that period become,
an Eligible Jobholder you will be brought into the scheme from the automatic
enrolment date (unless your employer issues you with a postponement notice to
delay bringing you into the scheme for up to a maximum of 3 months) or if your
contract is extended to be for 3 months or more or you opt to join by completing
an application form, you will be brought into the scheme from the beginning of the
pay period after the one in which your contract is extended or you opt to join.
How do I ensure that I have become a
member of the LGPS?
On joining the LGPS relevant records and a pension
account (for each employment if you have more
than one) will be set up and an official notification of
your membership of the LGPS will be sent to you.
You should check your pay slip to make sure that
pension contributions are being deducted.
Can I opt-out of the LGPS and re-join at a
later date?
Yes, you can opt-out of the scheme but if you are
thinking of opting out you might want to first consider
an alternative option which is to elect to move to the
50/50 section of the scheme. The 50/50 section allows
you to pay half your normal contributions in return for
half your normal pension build up. To find out more,
see the section on flexibility to pay less.
If having considered the 50/50 option you still decide
the LGPS is not for you, you can leave the LGPS
at any time on or after your first day of eligible
employment by giving your employer notice in writing.
You might, however, want to take independent financial
advice before making the final decision to opt out.
If you opt out of the LGPS before completing 3
months membership you will be treated as never
having been a member and your employer will refund
to you, through your pay, any contributions you have
paid during that time.
If you opt out of the LGPS with 3 or more months
membership and before completing the 2 years
vesting period you can take a refund of your
contributions (less any statutory deductions) or
transfer out your pension to another scheme.
If you are brought into the scheme you have the right to opt out. You cannot
complete an opt out form until you have started your employment.
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