Membership of the Local Government Pension Scheme (LGPS) is automatic for the majority of members, but it is not compulsory - you can choose to opt out at any time.
If you are thinking of leaving the pension scheme and opting out, are you aware you can pay less and remain in the scheme in the 50/50 section?
The 50/50 section allows you to pay half your normal contributions in return for half your normal pension build up, as well as retaining all the valuable benefits of the scheme such as life cover.
For more information about the 50/50 section visit our Can I pay less? (50/50 option) page.
Whether to opt out of the LGPS is a serious decision to take and you should make sure that you are aware of all the implications of doing so. You may want to take independent financial advice. Remember that in the LGPS your benefits are guaranteed, unlike the benefits from a personal pension plan (where a bad spell of investment returns could wipe out years’ worth of benefits). Although you could join the scheme again in the future, you will never be able to get back the missing membership.
Can I get a refund?
- 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 opt out of the LGPS with three or more months membership and before completing the two years vesting period you can take a refund of your contributions (less any statutory deductions) or transfer out your pension to another scheme.
- If you were in the scheme before 1 April 2014 and opt out on or after that date with three or more months membership and before completing the two years you will also have the option of having deferred benefits (essential freezing your pension) in the scheme instead of taking a refund of your contributions (less any statutory deductions).
If you opt out of the LGPS after meeting the two years period you will have deferred benefits in the scheme and will generally have the same options as anyone leaving their job before retirement, except you cannot draw your deferred benefits unless you have left your job. Also, if you re-join the scheme, you will not be permitted to join the two periods of membership together. Instead, you will have two separate sets of pension benefits in the scheme.
You can find details of these options in the 'Leaving Your Job Before Retirement guide' below.
Can I rejoin the pension scheme at a later date?
If you opt-out, you can, provided you are otherwise eligible to join the scheme, opt back into the scheme at any time before age 75.
You would need to complete an opt-in form and return this to your employer, who should then action this from the start of the next pay period. There is no limit to the number of times you can opt in and out of the scheme.
LGPS10B - Election to re-join the LGPS main section after previously opting out
If you stay opted out your employer will normally automatically enrol you back into the LGPS approximately every three years from the date they have to comply with the automatic enrolment provisions. You will then have to opt out again at this stage if you wish to do so.
You can leave the LGPS at any time on or after your first day of eligible employment by giving your employer notice in writing or completing the Opt Out form below and return it to your employer’s payroll section.
The Opt Out form MUST be returned to your employer and NOT the Avon Pension Fund. Sending the form to us will delay any refund of contributions you may be eligible for.