I am thinking of leaving the scheme
You leave the scheme when you opt out of the scheme, your pensionable employment ends or you reach the age of 75, whichever is the earliest.
I would like to opt out
You can opt out of the scheme at any time. However, this will end the valuable protection for your family that being a member gives you, so you may wish to take independent financial advice before making a decision to opt out. Instead of opting out, you could think about joining the 50/50 section of the scheme, which lets you pay half your normal contributions for half your normal pension being built up but it still gives you full life and ill health cover.
You can only opt out of the scheme once you have started that job.
If you opt out within 3 months of joining the scheme youâll be treated as not having joined, and your employer will give you back the contributions youâve paid.
If you opt out 3 months or more after joining the scheme you could, depending on how long youâve been a member and your age, be allowed to either have a refund of your contributions from the Pension Fund (less relevant deductions), have deferred benefits or transfer your pension to another scheme.
It is not possible to opt out to get your pension paid from the LGPS, as benefits deferred after opting out can only be paid once you leave that job.
If youâd like to opt out youâll need to fill in an opt out form from our Forms and Resources page and send it to your payroll department.
I would like to freeze my benefits
If youâve met the 2 years qualifying criteria and do not have to take your pension straight away, deferred (or frozen) benefits are normally the default choice on membership ending.
Examples of where you would have to take your pension straight away are where:
- you canât work because of ill-health (at any age) and are awarded an ill health pension at tier one, two or three;
- flexible retirement has been agreed by your employer;
- youâve reached the age of 55, met the 2 years qualifying service criteria and have been made redundant, or your employment has been terminated because of business efficiency;
- youâve left your job when you have both a) reached âpensionable ageâ and b) have a Guaranteed Minimum Pension (GMP). âPensionable ageâ here is age 60 for women and 65 for men, and a GMP relates to being contracted-out of the State Earnings Related Pension Scheme at some point between 6 April 1978 and 5 April 1997.
It is not possible to opt out to get your pension paid from the LGPS, as benefits deferred after opting out can only be paid once you leave that job.
Deferred benefits are increased in line with Inflation (CPI) and we will send you a deferred benefit statement each year.
If you do not have to take your pension straight away and are not within 12 months of your normal pension age when your membership ends,you may have the choice of transferring your benefits to another scheme, please see the section below and our âTransferring from the LGPSâ page.
I would like to transfer my benefits
Transferring from the LGPS
If your membership of the Local Government Pension Scheme (LGPS) ends before your normal pension age and you have at least 3 months membership but you do not meet the 2 years qualifying criteria for deferred benefits, it is normally possible for you to transfer your pension to another approved pension arrangement.
If your membership of the LGPS ends at least 12 months before your normal pension age, you qualify for benefits and do not have to take your pension straight away. It is normally possible for you to transfer your pension to another approved pension arrangement if you have not already triggered a Benefit Crystallisation Event (any time pension benefits are due to be taken from the scheme which leads to part or all of your lifetime allowance being used) in the LGPS in England and Wales.
If you have met the 2 years qualifying criteria, examples of where you would have to take your pension straight away are where:
- you canât work because of ill-health (at any age) and are awarded an ill health pension at tier one, two or three;
- flexible retirement has been agreed by your employer;
- youâve reached the age of 55, met the 2 years qualifying service criteria and have been made redundant, or your employment has been terminated because of business efficiency;
- youâve left your job when you have both a) reached âpensionable ageâ and b) have a Guaranteed Minimum Pension (GMP). âPensionable ageâ here is age 60 for women and 65 for men, and a GMP relates to being contracted-out of the State Earnings Related Pension Scheme at some point between 6 April 1978 and 5 April 1997.
You can find more information in this transferring your pension video (03.03) and on our âTransferring from the LGPSâ page.
Transfer to a new Local Government Pension Fund in England or Wales
If you take another job where you are a member of the Local Government Pension Scheme in England and Wales (LGPS), your benefits would normally be transferred automatically and joined with your new LGPS benefits, however if you qualify for deferred benefits:
- you may choose while still an active member in the new job to keep separate deferred benefits; this choice would need to have been received by your new Fund within 12 months of starting your new job or longer if your employer allows.
- If your deferred benefits were because you opted out at some point since 11 April 2015, those deferred benefits cannot then be joined in this way and would be kept separate.
To make sure that your LGPS benefits are dealt with in the right way you must either:
- contact your new Local Government Pension Fund (LGPF) to let them know that you have previous benefits with the Cambridgeshire Fund or the Northamptonshire Fund, and that youâd like details of your options; or
- you can fill in and return the Transferring Membership between Local Government Pension Funds form on our Forms and Resources page
Transfer to another pension arrangement
If you wish to investigate the possibility of transferring your pension rights to another arrangement other than a Local Government Pension Fund within England and Wales, you will need to;
Complete the Confirmation of Request for a Cash Equivalent Transfer Value and return it directly to either Cambridgeshire Pensions Service or Northamptonshire Pensions Service, depending on which Fund your benefits are held under.
For further information please read FAQs -Transferring your pension rights to another pension arrangement
Freedom and Choice
From 6 April 2015 members of certain pension schemes will have more freedom over how to take the money from their pension.
This flexibility does not apply to a Defined Benefit scheme such as the Local Government Pension Scheme (LGPS), and will therefore not have a direct impact on your LGPS benefits.
However, it may affect you if you are not already in receipt of your LGPS benefits and are considering transferring them to a Defined Contribution scheme when, for example, you may need to obtain approved independent financial advice before transferring.
Should you wish to read more about how transferring to a Defined Contribution scheme may affect you please read the Q and A for members transferring from the LGPS to a Defined Contribution scheme.
Pension Liberation Fraud â please be aware
Pension Liberation Fraud is a scam where savers are encouraged to transfer their pension fund to an arrangement on the promise of bogus âpension loansâ or cash incentives.
Tax charges of over half the value of your pension could fall on you for taking an âunauthorised paymentâ from your pension fund in this way. Plus, high fees could be taken from your pension for the transfer.
Fraud of this kind is on the rise in the UK, with people being targeted via unsolicited calls, texts and social media messages. To find out more read the Pensions Regulatorâs guidance or visit their the Financial Conduct Authority's ScamSmart website.
I would like to claim a refund
If you leave your job before retirement and you do not meet the 2 year vesting period you will have three options:
- you will normally be able to claim a refund of your contributions, less a deduction for tax and the cost, if any, of buying you back into the State Second Pension (S2P) in respect of your membership up to 5 April 2016 when the LGPS was contracted out of the State Second Pension (S2P). Interest is paid if the refund is not made within one year of leaving but no refund can be made if you rejoin the scheme in England or Wales within a month and a day of leaving or rejoin before the refund has been paid. Also, a refund will not be payable if, when you leave, you are paying into the LGPS in more than one job and you continue to be a member of the LGPS in the job that is continuing, or
- you may be able to transfer your benefits to a new pension arrangement (providing you have been a member of the LGPS for at least 3 months).
- you can delay your decision until you either, re-join the LGPS, transfer your benefits to a new pension arrangement, or want to take a refund of contributions. Where you delay your decision you will have a deferred refund pension account. Please note, you can only hold a deferred refund account for a maximum of 5 years or until age 75, whichever is earlier. If you have not transferred your benefits to a new pension arrangement or rejoined the LGPS by that time a refund of contributions will automatically be payable to you.
If you have not met the 2 year vesting period when you leave, but you joined the LGPS before 1 April 2014 and have 3 or more months' membership, you will be entitled to a deferred benefit instead of a refund (but you can opt within 6 months of leaving to receive a refund if you wish).
To claim a refund of contributions please complete a Refund Claim Form, which can be found on the Forms and Resources page.