The Local Government Pension Scheme (LGPS) and stock markets
There’s has been a lot of disturbing news lately about the fall in stock markets and the potential impact on defined contribution pensions.
LGPS defined benefit pensions are not linked to stock market performance and are set out in statute.
Although short term investment values may vary, the LGPS as a long-term investor is securely managed to address any longer term impacts.
You can be assured that both your contributions and pension, whether already being paid or what you’ve built up to date, will be unaffected.
Please visit our COVID-19 - important information page for details on how to contact the pension scheme during this time
Pension scam victims lost an average of £82,000 in 2018
Research from the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) says it could take a saver 22 years to build a pension pot of £82,000, which was the average amount victims lost to scams in 2018.
Pension scams can start with an unexpected call, text, social media approach or email - offering a free pension review. The regulators recommend four simple steps to protect yourself from pension scams:
• Reject unexpected pension offers whether made online, on social media or over the phone
• Check who you’re dealing with before changing your pension arrangements – check the FCA Register or call the FCA helpline on 0800 111 6768 to see if the firm you are dealing with is authorised by the FCA
• Don’t be rushed or pressured into making any decision about your pension
• Consider getting impartial information and advice
The Pensions Advisory Service gives free information and guidance. Alternatively, if you’re aged 50 or over and need free independent advice, you can contact the government-backed Pension Wise service.
Pensions cold calling has been banned, meaning that companies making unsolicited phone calls to people about their pensions face enforcement action, including fines of up to £500,000. If you think that you or your friends or family have been a victim of pensions fraud, please get in touch with Action Fraud
If you’d like to check your pension account you can log in or register online
Exit-payment cap – latest news
In 2015, the government released proposals for a public-sector exit-payment cap and we’ve been updating you on its progress. On 10 April 2019, another consultation was announced. This is due to close on 3 July.
The consultation provides detail on the proposed policy to limit the amount of money public sector employers can pay employees when they leave employment as a result of redundancy. This limit would include any pension ‘strain’ costs if early retirement is agreed, in addition to other payments.
Will this affect me?
The cap will only apply to you, as a scheme member, if the total of your exit payments is more than the £95,000 limit. With the inclusion of ‘strain’ costs, this proposal could affect those with long service not just high earners. Where total exit payments are higher than the £95,000 limit, the value of these payments must be reduced to equal £95,000. At the moment, the LGPS regulations would need to be changed for this cap to apply.
For more information or to respond to the consultation, please visit the following website
Changes to buying additional pension
The factors used to work out the cost of buying additional pension are checked and changed from time to time.
The Ministry of Housing Communities and Local Government (MHCLG) issued revised factors on 14 March 2019 following a review by The Government Actuary’ Department (GAD). These revised factors apply to existing contracts which run past 31 March 2019.
Changes to members’ monthly Additional Pension Contribution / Additional Regular Contribution deduction will take effect from 01 April 2019. Members concerned were sent a letter telling them how these changes affected them. If you’re currently buying additional ‘lost’ pension and haven’t received a letter then please contact us at email@example.com
Changes to survivor benefits for same sex spouses and civil partners
There’s been a change to the scheme rules so that survivor benefits payable to a same sex spouse or a civil partner are equal to those paid to the widow of a male member. The change is backdated to the date the civil partnerships and same sex marriages were introduced – which is 5 December 2005 for civil partnerships and 13 March 2014 for same sex marriages.
This means that where a member of the LGPS has died leaving a surviving civil partner or a same sex spouse, the survivor’s pension will need to be reviewed and any additional amounts paid, where applicable. We’re in the process of reviewing the impact of this change and will be contacting affected civil partners and same sex spouses in due course.
The change will automatically be taken into account in survivor benefits paid to civil partners and same sex spouses in the future.
Changes to when you can take your deferred benefit
Last year we let you know about a change to the Local Government Pension Scheme rules, if you left with a deferred benefit before 1 April 1998. We told you that the rules had been changed to allow you to take your benefit at age 55 (rather than 60) or your normal pension age. Your normal pension age will be between age 60 and 65 depending on when you joined the scheme – you can find this information on your deferred benefit statement
A further change to the scheme rules has been made which now allows you to take your benefit from age 55 (rather than only at age 55 or normal pension age) – your former employer doesn’t need to provide consent for you take your benefits between the age of 55 and your normal pension age. You must take payment of your deferred benefit at your normal pension age (if you haven’t taken payment before).
Also, you no longer have to leave all local government employment to take payment of your deferred benefit. This means that if you’re working in another local government employment (ie a different employment to the one you were in when you built up your deferred benefit) you can now choose to take payment of your deferred benefit and continue in your local government employment.
The above changes are backdated to 17 April 2018.
If you’d like to make an application for early payment of your deferred benefit please email us at firstname.lastname@example.org with the following information:
- name and address,
- national insurance number,
- employers name,
- date of leaving the Local Government Pension Scheme and
- date you’d like to take your benefits from.
LGPS Actuarial Factors
We previously informed you, that certain transfer value calculations were to be put on hold following an announcement by central Government that they were reviewing a central part of these calculations.
LGSS Pensions have now confirmed that the calculations for transfers in, early retirements and divorce settlements are now available and any cases put on hold will now be processed. The effective date of these calculations is different depending on the type of calculation required with each taking effect from the following dates:
• Non-Club Transfer In - effective from 19 November 2018.
• Pension Credit - effective from 08 January 2019. Used in Divorce calculations.
• Pension Debit - effective from 08 January 2019. Used in Divorce calculations.
• Early Retirement - effective from 08 January 2019.
• Trivial Commutation - effective from 08 January 2019
If you previously obtained an estimate with a calculation date on or after these dates, we recommend that you request a new estimate.
Each year the Pension that you receive from us is usually increased in line with the cost of living. This is based on the Consumer Price Index as assessed over the preceding year, to 30 September. The next increase to your Pension is due to take place on 10 April 2019, at which point a 2.4% increase will be applied to your pension.
Figures show some pension scam victims lose more than £1m each
According to new statistics, some victims of pension scams have lost more than £1m in savings each to fraudsters. Intelligence gathered by members of the multi-agency Project Bloom group has revealed that some people who had saved over £1m have lost their retirement funds to criminals. Data from Action Fraud showed that two people have reported losing this amount; however, it is believed that the majority of scam victims never contact the authorities.
The Pensions Regulator Executive Director of Frontline Regulation Nicola Parish said: “Victims of scams are often traumatised by what has happened to them and many inevitably are left questioning how they are going to afford to retire. The average loss of a victim is £91,000 but these Action Fraud reports show that people can also lose much, much more. However large your pension pot, you must be vigilant and able to spot and avoid a scam.”
If you are ever unsure if you have been a victim of a scam, please contact your Employer or the Pension Fund.
TPR Press Release 28 January 2019 - Scam victims lose more than £1m each to fraudsters.
Firefighters’ Pension Scheme administration benchmarking - member survey - action required
The Firefighters’ Pensions (England) Scheme Advisory Board in partnership with Aon, is undertaking a survey of the service you receive in relation to your pension. They are interested to hear Firefighters’ pension scheme member views on the frequency and quality of information you receive about your benefits. This data will be collected by Aon to feed into a report to benchmark the standard of service across the Firefighters’ Pension Scheme in England.
Please complete the survey here: http://bit.ly/FPS-Memb-Survey
The survey will take around 5 minutes to complete and all responses are anonymous. The closing date is 28 February 2019.
Pensions cold calling ban has started!
Legislation to ban pensions cold-calling comes into force on the 09 January 2019, meaning that companies making unsolicited phone calls to people about their pensions face enforcement action, including fines of up to £500,000. The ban, introduced under the Privacy and Electronic Communications (Amendment) (No 2) Regulations 2018 received parliamentary approval last month. The regulations prohibit cold-calling in relation to pensions, except for circumstances in which the caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme, and when the individual being contacted consents to the calls, or has an existing relationship with the caller.
Commenting on the ban, Guy Opperman, Minister for Pensions and Financial Inclusion, said: “Pension scams are despicable crimes, fleecing people of the retirement they’ve earned by doing the right thing, working hard and saving for the future. Banning pensions cold-calling will protect people from these callous crooks and ensure fraudsters feel the full force of the law.”
Scams affect people from all walks of life, with almost 11 million people each year receiving cold calls about their pension. Some fraudsters are even pretending to be staff from the Pensions Regulator. The callers offer savers a ‘free pension review’ but the Regulator has warned that they never cold-call people about their pensions.
A spokesperson for the Regulator has urged anyone else who is contacted to call Action Fraud. The spokesperson went on to advise “If anyone cold-calls you about your pension, it is an attempt to steal your savings. Just hang up.”
No one is immune, if you are concerned about you, friends or family being a victim of pensions fraud, please visit Action Fraud on https://www.actionfraud.police.uk/fraud-az-pension-liberation-scam
Prudential end exit charges
Prudential have advised that they are ending the exit charges for Local Government Additional Voluntary Contributions from December 2018. There current 1% exit charges for members accessing their AVC's within three years of the first contribution being received will end from the 3rd December 2018.
They stopped them for new joiners back in March 2017 and they will now be discontinued in all instances. For more information, please contact your Prudential representative.
Budget announcements and changes to the LGPS
The Government announced a reduction to the discount rate in the recent Budget; this rate is used to assess actuarial factors across all public service pension schemes.
As a result of this announcement all LGPS actuarial factors are currently being reviewed by the Government Actuary’s Department (GAD).
This has the immediate effect that calculations relating to some transfers, both in and out of the LGPS, and all transfer value calculations for divorce settlement purposes must be put on hold until new factors are issued. GAD have indicated that the aim is for these to be available in the early part of December 2018.
It is also the intention of the Ministry of Housing, Communities and Local Government (MHCLG) to introduce other revised factors “in February/March 2019”; these would affect the benefits payable to those that retire on or after the date of their introduction. If you are, or are considering, retiring on or after 1 February 2019, please take this into account when making any decisions concerning your LGPS benefits, as they could change.
This news page will be updated as and when the new factors are issued.
Important Information about changes to the Local Government Pension Scheme
As a member with Pension benefits in the Local Government Pension Scheme, we would like to advise you of recent changes to the rules governing the Scheme, which could have an impact on your pension rights.
A letter providing full details of these changes has been uploaded to your online pension account under scheme documents. If you do not already have an online account, please register for an account here.
Pensions scams on the rise, again!
Analysis by AJ Bell, of figures from the City of London Police, has revealed that £51m has been lost to fraudsters, so far this year. The figures show that people’s pensions are the most common target of scams, with the average age of the victim being 57 years.
AJ Bell Senior Analyst Tom Selby said: “Pensions - usually the most significant financial asset someone will have available to them - are often the target and these recent figures suggest the problem could be getting worse rather than better.”
This analysis backs up a report, early this year, by the Department of Work and Pension’s Select Committee, which indicated that Britain was facing a pension scam crisis
Scams affect people from all walks of life, with almost 11 million people each year receiving cold calls about their pension. Some fraudsters are even pretending to be staff from the Pensions Regulator. The callers offer savers a 'free pension review' but the Regulator has warned that they never cold-call people about their pensions.
A spokesperson for the Regulator has urged anyone else who is contacted to call Action Fraud. The spokesperson went on to advise “If anyone cold-calls you about your pension, it is an attempt to steal your savings. Just hang up”
No one is immune, if you are concerned about you, friends or family being a victim of pensions fraud, please visit Action Fraud on https://www.actionfraud.police.uk/fraud-az-pension-liberation-scam
High Court Ruling - Cohabiting Partners
From 1 April 2008, the LGPS introduced survivor's pensions for certain cohabiting partners, so long as they had been 'nominated' by the Scheme member. Under a high court ruling, which you may have heard referred to as Elmes V Essex CC, it is no longer necessary for us to have received a nomination form in order to pay a survivor's pension to an eligible cohabiting partner.
This ruling may affect members who had active LGPS membership after 31 March 2008 and died before 1 April 2014, but did not complete a nomination form before their death. Now it is possible to pay a survivor's pension to the eligible cohabiting partner of such members.
This was already the case for LGPS members who both had active LGPS membership after 31 March 2008 and died after 1 April 2014, as a change to the LGPS rules from 1 April 2014 removed this requirement for a nomination to be made.
If you or somebody you know had a cohabiting partner that left the LGPS after 31 March 2008 and died before 1 April 2014 and no survivor's pension was paid, this ruling may affect whether a survivor’s pension is now payable. If the deceased was a member of the Cambridgeshire or Northamptonshire Pension Fund you, or they, should contact us; if they were a member of a different LGPS Pension Fund, contact details of the administrators of each Fund in England and Wales are available here.
Welcome to your new-look
12 April, 2018
You will have noticed that things have changed around here...
We have completely redesigned our website and made a number of improvements that will hopefully make your experience and interaction with the website even better.
Here are some of the key improvements we have made:
- More integrated experience – your new member hub is now a one stop shop for your Local government pension needs. We have embedded the previous Member Self Service portal into the member hub so you will now be able to find general information about the scheme, look up the value of your pension and even run “what if?” estimates, all in one place. You will no longer have to complete and post us a form or visit a different website to find out how much your pension is worth.
- Better navigation – we have made it even easier for you to find the information relevant to you, whether you are an active, former, or pensioner member. This information is now grouped into dedicated, easy to find areas for each type of member.
- Secure, quick and easy – if you request information from us, we will now be able to upload that information to your secure pension account. We will notify you when the information is ready and you will simply need to log in and retrieve it whenever you’re ready. No more waiting until you get home to pick up the post and it is more secure with no risk of your documents being lost in the post.
- New look and feel – we have provided a whole new online experience for you with a new fresh design. We have increased our use of imagery and broken down large chunks of text to make the website easier to read and we have improved signposting too. You will now be able to focus on the information you want while hiding the rest, using our new ‘accordion’ feature.
- Mobile compatible – with most people now accessing the web through mobile phones and tablets, it has become expected that people are able to manage their finances and savings on the go. We think your pension should be no different so our new look website is now compatible with mobile devices, allowing you to access and manage your pension anywhere there is an internet connection.
You will need to log in, to make the most of our new look website and access your individual pension account, just like you would your bank account. Don’t worry, if you previously registered for our Member Self Service facility, you will not need to re-register as these details can still be used to log in to the new member hub.
If you have not previously registered, you will be able to register on the log in screen of the new website.
The web address you currently use will not change, you will simply find a new landing page where you will be able to access the new member hub.
We hope you are as excited about the launch of our new look website, as we are. If you have any comments, please email MSS@northamptonshire.gov.uk
Pension websites with anti-scam
messaging could be fraudsters in disguise
12 April, 2018
Rogue pension websites are carrying anti-scam messages to try to trick consumers into believing that they are legitimate businesses, The Pensions Regulator (TPR) has warned.
The message comes as TPR welcomes new measures to ban pension cold calling that will help prevent potential victims from being stripped of their savings by fraudsters.
The Department for Work and Pensions (DWP) has announced that it will bring in legislation for a cold calling ban, tighter rules to prevent the opening of fraudulent pension schemes and restrictions to prevent transfers into scam schemes.
TPR remains concerned about the opportunity for scam websites to claim fresh victims by targeting the vulnerable or those with limited pensions knowledge.
The multi-agency Project Bloom taskforce – led by TPR and including the DWP, HM Treasury, the Financial Conduct Authority, HM Revenue and Customs, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, The Pensions Advisory Service, and the National Crime Agency – was set up to tackle pension scams.
A number of suspected scam websites have been referred to TPR over the suspicion that they are being dressed up as legitimate investment vehicles – including carrying the Bloom campaign’s anti-scam material without TPR’s consent.
Some even imply they are regulated by carrying warning messages designed to prevent people falling victim to scams, such as making reference to the tax implications over accessing your pension before the age of 55 and the danger of cold callers.
TPR Chief Executive Lesley Titcomb said: “These sites are wolves in sheep’s clothing, lying in wait for unsuspecting victims by portraying themselves as being beyond reproach.
“The truth is that this next generation of scam sites poses a real threat to people’s financial futures and should be avoided.
“We welcome the Government’s tough new measures, which will strike a significant blow to pension scammers who devastate people’s lives by duping them out of their life savings.
“We are working closely with government, enforcement agencies and key financial service bodies to bring scammers to justice and, through our scorpion campaign, to help the public protect themselves from scams.”
Where TPR finds such websites, it will demand they immediately cease using material that TPR owns and will investigate with other agencies whether further action, such as legal proceedings, should be launched.
TPR is also updating its website to spell out even more clearly that just because websites talk about scams, this does not mean they are not scam vehicles themselves.
Anyone considering transferring their pension from their current provider should first visit pension-scams.com Here you can read tips on how to make sure you are not putting your financial future at risk by transferring your funds to a risky investment or scam.