Contracted out

The LGPS was formerly contracted out of the State Earning Related Pension Scheme (SERPS) and the State Second Pension (S2P). This meant that, up until 5 April 2016, prior to State Pension Age you paid reduced National Insurance contributions between certain thresholds (unless you had opted to pay the married woman’s/widow’s reduced rate of National Insurance). The LGPS guarantees to pay you a Guaranteed Minimum Pension (GMP) for being contracted out of the State Earning Related Pension Scheme (SERPS).

From 6 April 2016 the 'contracted out’ status ceased to exist for all pension schemes due to the introduction of the new single tier State Pension.  Therefore, from 6 April 2016 members of the LGPS pay the standard rate of National Insurance.