LEFT THE SCHEME AFTER 31 MARCH 2008
From when can I receive my deferred benefits if I left the Scheme after 31 March 2008?
The normal retirement age in the Local Government Pension Scheme (LGPS) is 65. This does not mean that you cannot retire and receive your benefits earlier:
How will my annual pension be calculated?
The two main factors used to calculate your retirement pension are:
- your total membership in the Scheme, AND
- your final pay
For each year you have built up in the scheme to 31 March 2008, you will receive a pension of 1/80th of your final year's pay plus an automatic tax-free lump sum of 3 times your pension.
For each year you build up from 1 April 2008 your pension will be at the increased rate of 1/60th of your final year's pay. There will be NO automatic lump sum for membership built up after 31 March 2008.
Can I exchange some of my pension to give myself either a tax-free lump sum or more tax-free lump sum?
Yes. You can exchange part of your annual pension to take a tax-free lump sum if you joined the Scheme after 1 April 2008, or additional tax-free lump sum if you joined before 1 April 2008. In both cases, you can take up to 25% of the capital value of your LGPS benefits as a lump sum.
Every £1 of annual pension that you give up you will receive an extra £12 lump sum. In the same way, giving up £100 of your annual pension would give you an extra £1,200 lump sum.
An option to take a lump sum has to be made in writing before your benefits are paid. So that you have plenty of time to make up your mind and seek financial advice if you wish, it is important you contact your former employer well in advance of your intended retirement date so that you can be provided with an estimate of these amounts.
