About the LGPS
The LGPS is one of the largest public sector section pension schemes. It is open to most employees in local government and in some other organisations.
- The LGPS is a statutory scheme with benefits set out in law making it very safe and secure.
- Its regulations are issued by the Ministry of Housing, Communities and Local Government (MHCLG).
- The benefits you build up in the LGPS are guaranteed. What you receive is specified by the scheme regulations rather than the value of your investment in the financial markets - it is a "defined benefit" pension scheme.
Every employer in the UK must enrol their workers into a workplace pension scheme if they are not already in one. This is known as automatic enrolment and is overseen by The Pensions Regulator.
Your employer may enrol you in the LGPS under either the LGPS scheme rules if eligible, or under automatic enrolment rules. You can leave the LGPS at any time on or after your first day in the scheme. See: Opting out.
For more information on automatic enrolment, see: Automatic enrolment.
- What are the scheme benefits?
- an annual pension on retirement based on pension you build up,
- a choice of tax-free lump sum when you retire - subject to HM Revenue and Customs limits,
- the ability to pay 50% of your contributions for 50% of the pension benefits,
- the ability to increase your pension by paying extra contributions,
- pension payable from your normal pension age (usually linked to State Pension Age),
- voluntary retirement from age 55, normally reduced as it's being paid earlier,
- an ill health pension from any age (subject to qualifying service for a period of two years),
- a death in service lump sum of three times your pensionable pay,
- a spouse's, civil partner's or cohabiting partner's pension in the event of death,
- children's pensions for eligible children in the event of death.
- Member Portal
It is quick and easy to register to view your pension details online. The benefits of accessing your information electronically include the ability to:
- add or amend an 'expression of wish' for payment of a death grant,
- change your address, name or marital status,
- securely view annual benefit statements,
- securely send us a message.
And, if you are a pensioner to:
- securely view payslips and P60s,
- update your bank details,
- view tax code changes.
To log in or register, see: Member Portal.
For more information, see: About the Member Portal.
Once you have completed the initial registration, you will receive an activation code by email so that you can finalise the process and access your details.
If you do not wish to register to receive your information online, you will need to opt out in writing (not email). Please include your National Insurance number in your letter so that we can identify your record.
- Annual Benefit Statements
Every year, we produce an annual benefit statement showing the value of your pension. This statement is made available online by 31 August each year and can be viewed through our Member Portal.
For more information about annual benefit statements, see: Annual Benefit Statements.
- Previous LGPS pensions
If you re-join the LGPS and have a deferred pension in the LGPS in England or Wales, it will normally be joined to your new LGPS pension unless you elect to keep your benefits separate. You must make this decision within 12 months of starting your new job, unless your employer has a written policy to allow longer. Your pensions will be joined together automatically if you do not make a decision in the first 12 months.
If you left the LGPS in your previous post before 1 April 2014 then the regulations are different, see: Re-joining the LGPS.
If you opted out of your previous pension and were awarded a deferred pension, then this cannot be joined to your new LGPS pension.
If you re-join and previously made contributions but were not in the scheme long enough to build up a deferred pension (i.e. you have a 'preserved refund') then:
- If your preserved refund relates to service where you left less than five years ago, it will automatically be added to your new pension account.
- If your preserved refund relates to service where you left five years ago or more, it will be refunded to you.
If you are actively paying into the LGPS in two or more employments, these pension accounts must stay separate. However, if you leave the LGPS in one employment but carry on in the others, then the pension account you have stopped paying into will normally be joined to an ongoing one. If you want it to stay separate from your ongoing accounts, you must notify us within 12 months and while paying into another LGPS pension. Your employer may have a policy to allow longer for you to make a decision. Check with them.
Re-joining the LGPS with another LGPS fund
If you re-join the LGPS with another pension fund, you will need to contact your new pension fund to find out what you should do. Your new fund will then contact us for details of your pension benefits.
- Pensions with other pension schemes
If you want to transfer an external pension, from another scheme, into your LGPS pension, you must normally do this within 12 months of joining the LGPS, and while still paying into it. A very small number of employers have a policy to allow longer, you will need to check this with your employer.
If you wish to transfer an external pension into the LGPS, see: Transferring benefits into the LGPS.
- How is my pension calculated?
The CARE part of the scheme (from 1 April 2014)
The LGPS has been a CARE (career average revalued earnings) scheme since 1 April 2014.
- In the CARE scheme, you build up a pension based on your pensionable pay.
- For each scheme year that you are a member, a pension equal to a 49th of your pensionable pay is added to your pension account.
- Every April, the total amount of pension in your account is adjusted for the cost of living.
Chris is in the main section of the scheme from 1 April 2018 to 31 March 2019 and earns £24,500 in that year.
Scheme year: 2018 to 2019
Section of the scheme: Main
Rate of build up: 1/49th
Pensionable pay: £24,500
Amount of pension built up: £500 (£24,500 divided by 49)
At the end of the scheme year, £500 is added to Chris's pension account. However, to ensure that the pension keeps its value, the total pension account will be adjusted in line with the cost of living (currently based on the Consumer Price Index). The cost of living adjustment was 2.4% for the scheme year ending 31 March 2019, so Chris's total pension account would be increased on 1 April 2019 to £512.
If Chris had been in the 50/50 scheme section for the year ending 31 March 2019, the pension benefits built up for that year would be half that shown above.
The final salary part of the scheme (before 1 April 2014)
Before 1 April 2014, the LGPS was a final salary scheme. If you contributed to the scheme before 1 April 2014 then this portion of your pension is calculated on a final salary basis, linked to your final pay at the date you leave the scheme.
Final pay is usually your pensionable pay in respect of your final year of scheme membership, or one of the previous 2 years if this is higher.
If you were part time, then the membership used in the following calculations will be less than your calendar years of membership.
For service between 1 April 2008 and 31 March 2014
You pension is calculated as follows:
Your final pay ÷ 60 x the number of years/days you have been in the scheme.
From 1 April 2008 there is no automatic lump sum (but you will be allowed to give up some pension to provide additional lump sum at retirement).
Details of the maximum tax-free cash payment you can take will be given to you shortly before your retirement. It is at that time you need to make a decision.
For service on and before 31 March 2008
Your final pay ÷ 80 x the number of years/days you have been in the scheme.
An automatic lump sum of:
Your final pay ÷ 80 x the number of years you have been in the scheme x 3.
For a more detailed explanation, see: How is my pension worked out?
- Death benefits
Death in service
The LGPS provides valuable life cover and financial protection for your family. If you die in service:
- a death grant lump sum, and
- a pension for your spouse/partner and any eligible children,
may be paid.
For details of death benefits payable in relation to deferred pensions, see: Death in deferment.
And for death benefits in retirement, see: Dependant benefits.
If you die while still paying into the LGPS, a lump sum death grant of three times your assumed pensionable pay at your date of death will be paid, no matter how long you have been a member of the LGPS, provided you are under age 75 at the date of death.
Note: the 2014 LGPS Regulations state that if a member has an active employment with any LGPS organisation, only the highest death grant relating to a death in service, deferred or pensioner record can be paid. Therefore, if a member has more than one pension benefit in the LGPS, it is possible that only one death grant may be payable.
You can nominate someone to receive the death grant by completing a Death grant expression of wish form:
Your pension fund retains absolute discretion as to the distribution of any death grant, however if you express a wish, this will be considered.
For details of death grants payable in relation to deferred pensions, see: Death in deferment.
In the event of your death, an ongoing pension may be provided for your spouse, civil partner or nominated cohabiting partner. If you are not married or in a civil partnership, but are cohabiting, your partner could also receive a pension if certain conditions are met. For more details see the notes on the Nomination of cohabiting partner form:
A pension is also payable to eligible children in the event of a member's death.
An eligible child is:
- a natural child born within 12 months of the member's death, or
- an adopted child born before or on the date of the member's death, or
- a step child or a child accepted by the deceased member as a member of the family who was dependent on the member at the date of death.
A child sponsored by the member through a registered charity is not eligible.
In addition, eligible children must also meet the following conditions:
- be under age 18, or
- be aged 18 or over and under 23 and in full-time education or vocational training, or
- be unable to engage in gainful employment (*) because of physical or mental impairment and either:
- has not reached the age of 23, or
- the impairment is, in the opinion of an independent registered medical practitioner, likely to be permanent and the child was dependent on you at the date of your death because of that mental or physical impairment.
(*) Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.