Annual Benefit Statements

These notes provide more explanation of the information contained in your 2023 annual benefit statement.

This year's Annual Benefit Statement provides an estimate of your pension benefits built up to 31 March 2023. Any projections on your pension entitlement are also based on the assumption that your current membership will continue until your NPA.

News

Age discrimination court case

Update on the Court of Appeal ruling - McCloud/Sargeant Age discrimination case:

When the LGPS changed from a final salary to a career average pension scheme in 2014, protections for older scheme members were introduced. Similar protections were provided in other public sector pension schemes. The Court of Appeal ruled that younger members of the Judges' and Firefighters' pension schemes have been discriminated against because the protections do not apply to them. The Government has confirmed that there will be changes to all main public sector schemes, including the LGPS, to remove this age discrimination. This ruling is often called the 'McCloud Judgement'.

The Government is still considering exactly what changes need to be made to remove the discrimination from the LGPS. This means it has not been possible to reflect the impact of the judgement in your annual benefit statement this year. If you qualify for protection, it will apply automatically - you do not need to make a claim. For more information, see the frequently asked question on the national LGPS website.

LGPS member site

Am I entitled to benefits?

If you leave your job before you want to claim your benefits you will be awarded a deferred pension provided you satisfy the vesting period.

You satisfy the vesting period if you:

have been a member of the LGPS in England or Wales for two years or
have transferred a pension into the LGPS from another occupational scheme or from a European pension's institution and the length of service in that scheme plus your LGPS membership is more than two years or
have transferred pension benefits into the LGPS from a pension scheme which does not allow a refund of contributions or
have transferred pension benefits from the LGPS to a qualified recognised overseas pension scheme
have a deferred pension or are in receipt of a pension from the LGPS, other than a survivor's pension or a pension credit member's pension
paid National Insurance contributions as a member of the LGPS and you stop paying into the LGPS in the tax year you reach state pension age or
stop paying into the LGPS at age 75 or
die in service.

If you have not met the vesting period, you can choose:

to take a refund of the pension contributions you have paid (the employer contribution is not refunded) or
to transfer the value of your LGPS pension to another pension arrangement (if the regulations allow).

When can I take my benefits?

The Normal Pension Age (NPA) is the date you can take your benefits in full and for most people this will be your State Pension Age (but with a minimum of age 65).

You must take your pension by age 75. For more information on when you can take your benefits, see our webpages.

If your State Pension Age changes in the future, your NPA in the LGPS will also change.

You can only take this pension when you leave your job or if your employer grants flexible retirement. However, you must take this pension by age 75 if you continue to work.

Early or Late retirement

You can choose to take your pension from age 55 but it will be reduced if you take it before your NPA. If you take your pension after your NPA, increases will be applied.

At any time, the Government may change the factors and methodology used to calculate the reductions and increases which may result in a corresponding change to the pension you are paid at retirement.

The Government sets the normal minimum age at which you can access your pension savings. This is currently age 55 - however it is rising to age 57 from 6 April 2028.

Retirement date if you have membership before 1 April 2014

If you paid into the LGPS before 1 April 2014, you may have a different NPA for benefits built up before this date.

If you have a different NPA for your pre April 2014 and post April 2014 benefits, then some of your benefits may be paid in full and some may be increased or decreased depending on when you decide to take your pension. However, when you take your benefits, you must take them all at the same time (unless your employer allows you to take flexible retirement).

Protect yourself against pension scams

The LGPS is a defined benefit pension scheme. The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have stated that they "believe that it will be in most people's best interests to keep their defined benefit pension. If you transfer out of a defined benefit pension, you cannot reverse it. Make sure that you understand the risks to help you make an informed decision".

Pension fraud is a real concern and on the increase. If you are thinking of transferring your deferred pension out of the LGPS you may be at risk from scammers. Scam tactics include:

websites impersonating well known brands,
promise of high/guaranteed returns,
pressure to act quickly,
free pension reviews,
access to your pension before age 55,
contact out of the blue.

Many scammers are using social media and other online channels to offer people "too good to be true" incentives such as free pension reviews, early access to their money, or time limited offers. Lured by these attractive offers, people are coerced into transferring their savings into a scam scheme designed to fleece them of their savings.

Please read the guidance document produced by The Pensions Regulator.

To protect yourself from scams the Pensions Regulator suggests the following:

reject unexpected offers and any contact out of the blue,
check the Financial Services Register to confirm if the person offering you advice is authorised - avoid unauthorised advisers,
don't be rushed or pressured into transferring your pension,
get impartial advice (you must do this if you want to transfer more than £30,000 but it is always recommended),
contact Money Helper for free independent impartial information and guidance.

Beware:

Any offer of a free pension review is likely to be a scam.
Ask to see the HM Revenue and Customs approval of your new pension scheme - if the scheme is recently registered, it may be a scam.

For further detail and information please visit our Pension Scams page.

Exchanging pension for lump sum

Most members are able to increase their lump sum by giving up some of their annual pension. For each £1 of pension that you give up, you get an extra £12 of lump sum.

Your statement shows you:

your standard pension benefits, with no pension exchanged for lump sum and
your pension benefits with the maximum amount of pension exchanged for lump sum.

You can also choose a lump sum value between the two lump sums shown in your statement.

If you joined the LGPS after 31 March 2008 you will see a £0 lump sum in your standard pension benefits. However, you can still give up pension to provide a lump sum.

If you have an AVC you will need to request an estimate from us if you wish to convert pension to lump sum, as figures in this statement will not be accurate.

HM Revenue and Customs set the maximum limit on the pension that you can exchange for lump sum.

Your pensionable pay and membership

Your pensionable pay was provided by your employer. If you do not agree with the amount shown on your statement, please contact your employer.

Any service you have before 1 April 2014 is used to calculate pension. You can view your service history on the Member Portal. From 1 April 2014, your pension is calculated on your pensionable pay only, not on your service.

Additional Pension Contributions (APCs) paid in the current scheme year will appear separately on your statement. If you have paid APCs in previous years these are included in the post 2014 pension amounts.

Partner's pension

If you have a spouse or civil partner, they automatically qualify to receive a survivor's pension if you were to die. If you have a cohabiting partner and meet certain conditions, your partner may be eligible for a pension even though you are not married or in a civil partnership. This is a scheme benefit that is paid to surviving partners and will not reduce or affect your pension if you do not have a partner. You cannot nominate anyone else to receive your partner's pension.

An estimated surviving partner's pension is shown if our records indicate you are in a partnership. This figure is only for illustration purposes and the amount may differ from the one shown depending on your circumstances and on the regulations that apply when a pension becomes payable. For example, if you are currently married but subsequently re-marry after you leave, your new spouse may not be entitled to as much pension as your original spouse was.

Death grant lump sum

A death grant lump sum will be payable if you were to die while contributing to the LGPS. The distribution of this is made at the absolute discretion of the fund; however, you can express a wish for a person(s) or organisation(s) to receive this. It can be paid directly to a beneficiary and therefore would not be part of your estate or subject to inheritance tax.

You can view and update an existing nomination, or provide a new nomination on the Member Portal. Alternatively, you can complete a death grant expression of wish form available from our website.

Please note: if you have a deferred pension and/or a pension in payment from a previous period of membership of the scheme, the death grant lump sum will be the higher of:

the death grant arising from these benefits, or,
death grant lump sum of three times your assumed pensionable pay for your active membership(s).

Lifetime Allowance (LTA)

The LTA applies to the value of your combined UK registered pension schemes and some overseas schemes; the value shown relates to this pension. It does not include any in-house AVC.

Most people's benefits will not exceed the LTA but we need to provide this information to everyone.

The information shown here is not a transfer value. To obtain a transfer value, please complete a Cash Equivalent Transfer Value form, available on our website.

Your LTA value shown on this statement is based on your benefits built up to 31 March 2023.

Annual Allowance

HM Revenue and Customs sets an annual allowance, which is the amount by which your benefits can increase in a year without being subject to tax. The standard annual allowance is currently £40,000. If you have exceeded the standard annual allowance limit in the year you will receive a Pension Savings Statement by 6 October 2023.

A tapered annual allowance may apply for people with adjusted income of £150,000 and over. If you think this applies to you, please contact us.

Please see the annual allowance factsheet on our website for more information.

Previous Years' Annual Benefit Statement Notes