COVID-19 - important information
You may have heard reports that the Covid-19 outbreak has led to large falls on worldwide stock markets and may be concerned about the knock on effect on your pension. We’d like to reassure you that, as the Local Government Pension Scheme (LGPS) is a defined benefit scheme, your pension isn’t linked to stock market performance so it won’t be affected. Your LGPS pension is guaranteed by the Government and is worked out based on your earnings and how long you are in the scheme, which means you do not need to worry about your pension during this outbreak.
Like other organisations, we are following government advice and now working remotely. This means we can’t offer our normal telephone or postal service during this time. So please don’t call or send us any letters or forms by post.
We also expect that during these unprecedented times there will be extra pressure on our services. We believe it’s important that we help those members who are most in need and so we ask that, where you can, you look for answers to your questions on our website, and by using your online pension account
We ask that you only contact us, if you absolutely must and regarding urgent issues. For example we will not provide estimates for retirement dates more than 12 months away or provide estimates based on more than 2 scenarios. This will allow us to focus on paying benefits to our pensioners and assisting those most in need.
There are a number of tools available within your online pension account to help you with longer terms financial planning.
Here’s the best ways to get help and support on your pension during this time:
Secure online pension account
- check the current value of your pension
- see what pension savings you could get at retirement
- update your personal details
- see any documents that you've asked for
- upload any documents we’ve asked for
- message us with secure information
by logging in or registering to your online pension account
Our website also has lots of information to help you with your pension, like:
- How do I pay more?
- How do I pay less?
- What are my retirement options?
We’ve also put together some frequently asked questions to help with any queries you may have.
COVID-19 - frequently asked questions
I am concerned about my financial situation because of the COVID-19 – what can I do?
The Money Advice Service has published guidance on how to deal with the financial effects that you may be suffering due to the coronavirus pandemic. It covers all aspects of your finances including problems with paying mortgage and rent payments, debt and claiming benefits.
Can I stop my pension contributions?
Yes, but you might want to consider joining the 50/50 section of the LGPS instead of opting out. If you do, you’ll pay half your normal contribution rate and build up half your normal pension. You will retain full life and ill health cover and you can move back to the main section whenever you are ready.
You can use the contributions calculator to check what difference this would make to your take home pay.
If after considering the 50/50 section you decide you would like to opt out, you can fill in an opt out form. You should take independent financial advice before deciding to opt out.
If my pay is reduced, what impact will this have on my pension?
This will depend on the reason for the reduction:
- If I’m on sick leave
If you’re off work due to sickness or injury and your contractual pay is reduced, or you don't receive any pay, then a notional pay figure is used to work out your pension to make sure your pension is not affected. This notional pay is called your assumed pensionable pay
You’ll continue to pay your basic LGPS contributions on any pay that you receive while you’re off sick. If you’re on unpaid sick leave, you’ll not pay any contributions.
If you’re in the 50/50 section of the scheme and your pay is reduced to zero due to unpaid sick leave, you’ll automatically be moved into the main section of the scheme from the beginning of the next pay period (if you’re still not receiving any pay). This means from that point forward, you’ll build up full pension benefits in the LGPS even though you’re not paying pension contributions.
- If I’m granted a period of authorised unpaid leave?
If your employer allows you to take a period of unpaid leave, the period will not count for pension purposes unless you choose to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost during that period of absence.
You can find more information, use an online calculator, and download an application form, from the LGPS member website
If you choose APCs to purchase the amount of pension lost within 30 days of returning to work (or a longer period if your employer allows it), the cost will be split between you and your employer.
Coronavirus job retention scheme leave
The Government has confirmed that they do not expect public sector organisations, such as councils, to use the coronavirus job retention scheme, except in some very limited cases. Public sector employers should continue to pay staff in the normal way even if they are not at work.
If your employer is able to use the job retention scheme and you both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’.
If this applies to you, your employer could pay 80% of your wages up to a monthly cap of £2,500. The Government will fund your employer to do this. Employers can choose to top up your pay to 100%, but if you receive less pay when you are ‘on furlough’, the amount of pension you build up during this period will also be reduced. You will continue to pay pension contributions on the pay you receive.
You can pay Additional Pension Contributions (APCs) to buy extra pension to make up for the pension lost during this period. Your employer does not have to pay towards the cost, but they can choose to.
You can find more information about paying APCs, use an online calculator and download an application form from the LGPS member website
The GOV.UK website provides more information on the job retention scheme for employees
Emergency Volunteering Leave (EVL)
The Government has introduced a new volunteering scheme to allow the public to contribute to the coronavirus response. The scheme allows workers to take unpaid statutory emergency volunteering leave to volunteer in health and social care authorities.
If you take a period of EVL, your LGPS pension benefits will build up in the same way as if you were working normally.
You will only pay contributions on any actual pay your employer pays you during the period.
- If I’m away from work for other reasons?
If you’re on:
- maternity, adoption, or paternity leave, or shared parental leave,
- reserve forces leave, or
you can find out more information on the LGPS member website
Coronavirus (Covid-19) is affecting the stock market, does this mean I’ll get less pension when I retire?
The LGPS is a defined benefit pension scheme, so your benefits are not linked to stock market performance and are instead worked out based on your pensionable pay and number of years as a member.
You can be assured that your pension benefits will be unaffected by any stock market movements.
Will the current situation in regards to coronavirus impact payment of my pension?
No, Pension Funds will continue to pay pensions as normal.
Could pension scams increase during the Coronavirus (Covid-19) outbreak?
Yes, watch out for scams related to coronavirus (Covid-19). These scams take many forms and could be about insurance policies, pensions transfers, or high-return investment opportunities, including investments in crypto assets.
Scammers are sophisticated, opportunistic and will try many things. They’re also very likely to target the vulnerable. Beware of investments that appear to be too good be true. If you decide to invest in something offering a high return or in a crypto asset, you should be prepared to lose all your money.
To help protect yourself you should:
- Reject offers that come out of the blue.
- Reject offers that come out of the blue.
- Beware of adverts on social media channels and paid for/sponsored adverts online.
- Use the FCA register and Warning list to check who you’re dealing with.
- Do not click links or open emails from senders you don't already know.
- Avoid being rushed or pressured into making a decision.
- If a firm calls you unexpectedly, use the contact details on the register to check that you’re dealing with the genuine firm.
- Not give out personal details (bank details, address, existing insurance/pensions/investment details).
If you suspect a scam, call Action Fraud straight away on 0300 123 2040.
Thank you for your understanding during these unique times and rest assured that the payment of all pension benefits continues to be our top priority.