Refund eligibility
You may be eligible for a refund of contributions that you paid into the local government pension scheme (LGPS) under the following situations:
- If you opt out of the LGPS before completing three 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 leave, or opt out after three months, and have not completed two full years scheme membership, you will normally be able to take a refund of your contributions (there will be a deduction for tax) or transfer out your pension to a new pension arrangement.
How long do I have to claim a refund?
If you leave the scheme before completing the two years membership period, we will write to you at the time of leaving outlining your options, including claiming a refund.
You can delay your decision until you:
- re-join the LGPS
- transfer your benefits to a new pension arrangement
- want to take a refund of contributions
Where you delay your decision, you will have what is known as a deferred refund pension account.
Your deferred refund pension account can only be held for a maximum of 5 years or until age 75, whichever is earlier. If you have not transferred your benefits to a new pension arrangement or re-joined the LGPS by that time, a refund of contributions will automatically be payable to you.
No refund can be made if you re-join the scheme in England or Wales within a month and a day of leaving or re-join before the refund has been paid.
If your refund is not made within one year of leaving, interest will be added to your deferred refund pension account. The rate of interest is 1% above the Bank of England base rate on a day-to-day basis from the date you left the scheme, to the day the refund is paid. No further interest will be paid on the refund after 5 years.
We will write to you four years and six months after you left, as a final reminder about your refund and how to claim it. We will not include the amount of refund due in that letter. However, we will share details of who your employer was when you paid into the scheme and the period of your membership. We will include a form that you will need to complete so that we can pay your refund.
Transferring your deferred pension refund
If you re-join the LGPS with another authority in the future, you must notify your new authority that you hold a deferred refund with the Fund. This must then be transferred to them. You can only transfer if you re-join the LGPS within five years from date of leaving the Fund.
If you re-join the LGPS with another authority within one month and one day of leaving the Fund, we will not be permitted to pay a refund. Instead, your benefits must be transferred to your new authority. If this is the case, you should notify us of your new authority to enable us to transfer your benefits to them.
If you join a new pension scheme within five years from date of leaving, it may be possible to transfer your pension rights instead of taking a refund. It is also possible to transfer to a Personal Pension Scheme provided by an Insurance Company. This option is only available to you if you have left the scheme with at least three months membership. If you are interested in this option, please ask the administrators of your new scheme to contact the Fund for further details. No transfer payment will be made without your written authority.