NOW's the time to be planning for your future, so you need to consider a pension.

CHOOSE the Local Government Pension Scheme (LGPS) and have a head start.

THAT's because the Scheme is provided by your employer which pays a large
part of the cost(1).

THE scheme is an important part of your employment package and is a valuable BENEFIT on top of your pay.

LET’S look at the cost and benefits of joining the LGPS that apply from 1 April 2008.

The cost of being a member of the Scheme is LESS than you might think

HOW MUCH it costs you depends on how much you’re paid but it will be between 5.5 and 7.5% of your pay. The rate you pay depends on which pay band you fall into(2).   

If you work part-time, your rate will be based on the whole time pay rate for your job, although you will only pay contributions on the pay you actually earn.

Here are the pay bands that apply from April 2009
The pay band ranges will be increased each April in line with the cost of living.

IT COSTS EVEN LESS if you pay tax and National Insurance as you get tax relief on your contributions and pay a lower rate of National Insurance.

THE BENEFITS OF JOINING

THE LGPS is one of the best ways to plan for retirement with an excellent range of benefits that both full-time and part-time employees can enjoy. 

THESE INCLUDE, after 3 months in the Scheme: 

A tiered ill-health retirement package if you have to leave work at any age due to permanent ill health. This could give you benefits, paid straight away, and which could be increased if you are unlikely to be capable of gainful employment within 3 years of leaving.  

Early payment of benefits if you are made redundant or retired on business efficiency grounds and you are aged 55 or over.  

The right to voluntarily retire from age 60, even though the Scheme’s normal pension age is 65. You can even retire from as early as age 55, provided your employer agrees.  

Flexible retirement from age 55 if you reduce your hours, or move to a less senior position. Provided your employer agrees, you can draw some or all of your benefits – helping you ease into your retirement. 

If you choose to voluntarily retire before 65, or take flexible retirement before then, your benefits would normally be reduced to account for them being paid for longer.

You can even stay in the LGPS if you carry on working beyond age 65, although you have to draw your benefits by 75. Benefits drawn after age 65 will be increased.

THERE IS ALSO:

Life cover from the moment you join, with a lump sum of 3 years pay being paid if you die in service.

Cover for your family, with a pension for your husband, wife, registered civil partner(3) or nominated co-habiting partner(4) and for eligible children if you die in service or die after leaving with a pension entitlement.  

WHEN YOU RETIRE you can look forward to:

A pension for life that increases with the cost of living, and  

You can exchange part of your annual pension for a one off tax-free cash payment. 

WHAT’S MORE

It's a final salary scheme, which means your benefits are normally based on your final year’s pensionable pay and the number of years you have been a member of the Scheme.

HOW ARE BENEFITS WORKED OUT?

For each year in the Scheme you receive a pension of 1/60th of your final year's pensionable pay.

And if you want to take a lump sum, you receive £12 lump sum for each £1 of pension given up. You can take up to 25% of the capital value of your pension benefits as a lump sum.

Here's how it's worked out:

If you work full-time:

If you work part-time. 

Your membership is reduced to reflect part-time working but full-time pay is used in the calculation.

If Mr B's hours had changed during membership of the Scheme, his benefits would be calculated to reflect the change.

YOU CAN LOOK FORWARD WITH CONFIDENCE WITH THE LGPS, BECAUSE:

HOW TO JOIN THE LGPS:

To join the LGPS you need a contract of employment with an employer that participates in the Scheme that’s for at least 3 months and be under age 75.

New employees who are eligible(5) are automatically brought into the Scheme, except for employees of admitted bodies6 who can join by completing an application form. Employees who have previously opted out of membership can opt back into the Scheme.

If you are a new employee who is eligible to join the LGPS you should be given a Pension Pack by your employer. Please read the information in the Pension Pack and complete and return the enclosed forms without delay. If you previously opted out of the LGPS you can elect to rejoin by completing a Membership Form, available via the following link

LGPS01-2008-Pension Scheme Membership Form

If you want to know more about the Scheme, or if you have membership in the Scheme before 1 April 2008 and want to know how benefits built up before then are worked out, you can get more information by reading the full Scheme Guide on this website, by reading the website www.lgps.org.uk or by contacting Avon Pension Fund.

This overview gives a brief outline of the Scheme that applies from 1 April 2008 and cannot cover every personal circumstance. In the event of any dispute over your pension benefits, the appropriate legislation will prevail. This leaflet does not confer any contractual or statutory rights and is provided for information purposes only.

(1) Increases or decreases in the cost of providing the scheme may, in future, need to be shared between members and employers, in accordance with government guidance.

(2) The contribution rate for those manual workers who joined the Scheme before 1 April 1998 and were protected to pay contributions at a rate of 5% will be brought into line with all other Scheme members on a phased basis by 1 April 2011.

(3) A civil partnership is a relationship between two people of the same sex (“civil partners”) which is formed when they legally register as civil partners of each other.

(4) In order to nominate a co-habiting partner, your relationship must meet certain conditions.

(5) Employees of designating bodies (e.g. employers such as Town or Parish Councils) and employees of admitted bodies (e.g. employers such as charitable organisations or contractors who have applied to participate in the Scheme) can only join if their employer nominates them for membership of the Scheme.

(6) An admitted body is an employer that chooses to participate in the Scheme under an admission agreement. These tend to be employers such as charities and contractors.