Joining, Leaving and Benefits

Leaving the Scheme

Transfer of Pensions Rights

If you leave your current job and move to another LGPS employer, your pension rights can be transferred to your new employer's fund. If you transfer in this way, you will still be entitled to the same Pensionable Service.

If you are not staying in local government, then you may ask for a transfer value equal to the value of your benefits to be paid to your new employer's scheme, to a personal pension or stakeholder pension policy, or to an appropriate individual assurance policy.

The transfer value is the amount required under current market conditions to secure your preserved benefits. It is calculated on actuarial advice as required by the Regulations. Under the Pensions Act 1995 any transfer value will be guaranteed for three months from the date it is calculated.

The Pensions Section must calculate the transfer value within three months of your request and it must be supplied to you within ten days of the calculation date.

If you wish to transfer your benefits on the basis of this transfer value, you will need to notify the Pensions Section within 3 months of the calculation date. The Pensions Section is then required to pay the transfer value within 6 months of the calculation date. If the Pensions Section fails to do this, you will be entitled to transfer value that is the higher of either (1) a recalculated transfer value, or (2) the original transfer value plus interest.

If you do not notify the Pensions Section within 3 months of the calculation date, but do so later, a new transfer value will need to be calculated. The new figure may be higher or lower than the original transfer value.

Alternative Options

If you choose not to take the transfer, you must take either a refund or a preserved benefit. Your entitlements will depend on your length of Actual Service as follows:-

If you have less than 3 months Actual Service and no Transferred Service you will be reinstated into the State Second Pension (S2P). Both you and your employer will share the cost of reinstatement roughly equivalent to the previous savings made in National Insurance contributions. You will then receive any balance of your contributions as a refund, less tax, which is currently deducted at the rate of 20%. However, if you had a transfer in a refund is not permissible

If you have 3 or more months Actual Service or any Transferred Service your benefits will be preserved and paid at a later date. Your preserved pension and lump sum are based on your Final Pensionable Pay and Pensionable Service at the time you leave, but they will be increased annually from the date you leave in line with the Retail Price Index. The pension and lump sum will usually be paid at the age of 60. However, they can be paid earlier in cases of permanent ill-health, or between the ages of 50 and 60. Application for early payment in these cases must be made to your former employer.