Members usually pay tax if their pension pots are worth more than the Lifetime Allowance. The allowance is currently £1 million. While the majority of members of the Local Government Pension Scheme will be unaffected, those members that are may be able to apply for protections and an online facility to register for Fixed Protection 2016 and Individual Protection 2016 is now open for individuals to access.
Latest news & announcements
There will be a delay in the sending of the annual pension benefit statement for deferred members who left the Local Government Pension Scheme (LGPS) between 1 April 2015 and 31 March 2016.
If you previously paid into the LGPS but haven’t yet retired you are known as a deferred member and your pension benefits are frozen or preserved.
As a deferred member every year we send you your Annual Deferred Pension Statement, which shows the current value of your deferred benefits you have with the Avon Pension Fund as at 6 April.
If you are paying into the local government pension scheme (LGPS) you will receive an Annual Pension Benefit Statement from the Avon Pension Fund during August.
It shows the pension you have built up to 31 March 2016 as well as a future projection of your benefits if you remain paying into the scheme to your Normal Pension Age (NPA). This is the age you would retire and take your benefits without any reduction to your pension.
The statements will be posted out to you during August.
The following statement has been issued by DCLG with regard to “Brexit” and the LGPS:
“The Local Government Pension Scheme (LGPS) - Implications of the EU referendum
"The question of how, if at all, the result in favour of 'Brexit' will impact on the LGPS has been raised by scheme members and employers as well as the press and other 'commentators' on all things LGPS.
In the July 2015 budget the government announced that they wanted the 89 Local Government Pension Scheme funds to pool their investments into larger pools in order to achieve savings in investment management costs. Following this in the Autumn Statement, the government published the criteria for the pooling of LGPS investment assets.
In response to the government agenda, the Avon Pension Fund has explored options for the pooling of its investment assets with the other eight LGPS funds in the south west*, a group that has already worked collaboratively over a considerable period of time. Two other funds, Oxfordshire and Buckinghamshire have joined the group which is now called “Project Brunel”, with collective assets of c. £23 billion.
A key feature of the change in the Local Government Pension Scheme from Final Salary to Career Average from April 2014 was that each year the cost of living is factored into members’ pension accounts so that over the years a current value is reflected.
The annual cost of living revaluation from 1 April 2014 is based on the Consumer Prices Index (CPI) set by the Government in September of the previous year.
The calculation of all transfers into and out of the Local Government Pension Scheme (LGPS) has been suspended as a result of the change to the discount rate from 16 March 2016, as announced in the recent Budget. The Government sets the discount rate for all public service pension schemes.
The Government is proposing a cap of £95,000 on the total value of exit payments, such as those made on voluntary and compulsory redundancy. The proposal is that the cap is set to apply to all forms of exit payments but in particular to voluntary and compulsory redundancy payments and including any potential strain on the fund costs due to early payment of pension after age 55. The government is proposing to limit the potential benefits to employees who are offered early access to pension in place of, or in combination with, a lump sum compensation payment to within £95,000. Any costs in excess would need to be either given up or funded by the member.
A new single tier, flat rate State Pension is being introduced for people who reach State Pension age on or after 6 April 2016. This means that most members of the LGPS are currently paying a lower amount of National Insurance contributions. From 5 April 2016 you will no longer receive this National Insurance rebate which means you will start to pay a higher amount of National Insurance contributions. The following Q&A document has been produced to help LGPS members understand what the changes to the State Pension will mean for them.