Benefits of the pension scheme – Planning for your future
The local government pension scheme (LGPS) is a great way to save for your future and is an important part of your employment package.
Your retirement may be many years away but it’s important to make adequate financial plans now.
|These are some of the benefits:|
|A secure pension when you retire - you’ll get a pension for life that increases with the cost of living|
|Your benefits are guaranteed and are not affected by the amount of money in the fund or how it is invested|
|Your employer shares the cost and pays contributions to your pension too (about twice what you pay)|
|No hidden management fees or charges, you simply pay a percentage of your salary|
|You get tax relief on all your contributions|
|You can boost your pension by paying more contributions which you would get tax relief on.|
|You can draw your pension anytime from age 55 to 75|
|When you take your pension you can exchange part of it for some tax-free cash (exchange £1 of pension for £12 cash)|
|You also have flexibility to pay less - with the option to pay half your normal contributions in return for half your normal pension, known as 50/50.|
|If you have to leave work due to permanent ill health you get a pension|
|If you are made redundant or retire on business efficiency grounds and you are aged 55 or over you get a pension|
|Flexible retirement available from age 55 if you reduce your hours, or move to a less senior position. If your employer agrees, you can draw some or all of your benefits, helping you ease into your retirement.|
|Life cover of three times your pay from the day you join the scheme and there’s no medical (unlike other forms of life insurance)|
|Cover for your family - with a pension for your spouse, registered civil partner or cohabiting partner and for eligible children if you die in service or die after leaving with a pension entitlement.|
You need to be under age 75 and work for an employer that offers membership of the scheme.
If you are employed by a body such as a town or parish council or by a non-local government organisation which participates in the scheme, you can only join if your employer allows you.
If you start a job in which you are eligible for membership you will be brought into the scheme, if your contract of employment is for three months or more.
If it is for less than three months you will be brought into the scheme if you are, or become:
- an eligible jobholder or
- your contract is extended to be for three months or more or
- you opt to join by completing an application form.
Your employer will send you a weblink to the Welcome to the LGPS - Pension Pack for New Members. Paper copies are available on request.
It contains the following forms to complete:
- Pension scheme membership form (LGPS01) – send this to your employer
- Transfer enquiry authorisation (LGPS01A) - if you would like Avon Pension Fund to investigate the possibility of transferring your previous pension rights into your LGPS – send this to us
- Death grant expression of wish form (LGPS19) – to nominate the beneficiaries of your death grant – send this to us
- Nomination of cohabiting partner for survivor’s pension (LGPS19A) if applicable – send this to us
On joining the LGPS relevant records and a pension account (for each employment you are in) will be set up. You should check your pay slip to make sure that pension contributions are being deducted.
You should also sign up to my pension online to access your pension record.
If you are brought into the scheme you have the right to opt out, however you cannot opt-out until you have started your employment.
Can I join the LGPS if I already have a personal pension or stakeholder pension scheme?
Yes, however under HM Revenue and Customs rules there are controls on the pension savings you can have before you become subject to a tax charge – most people will not be affected by these controls.