Scheme Benefits

About the LGPS

The LGPS is one of the largest public sector 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 & 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 - this means 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 normal contributions for 50% of the normal 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,
annual adjustment of active pension accounts, deferred pensions and pensions in payment each April, in line with the cost of living,
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.

Note: The government sets the earliest age at which you can access your pension savings under normal circumstances. This is currently age 55 as indicated above - however it is rising to age 57 from 6 April 2028.

Tax and your pension

Contributions to a pension scheme are eligible for tax relief. The LGPS is a "net pay" pension scheme so your employer will deduct your pension contribution from your gross pay before calculating your tax. This reduces the amount of tax that you pay.

However, if you are a low earner who does not pay tax then:

you will not get tax relief from a "net pay" pension scheme
you cannot claim money back from HM Revenue and Customs in respect of your pension contributions.

Low earners may wish to seek advice from Money Helper or an Independent Financial Adviser as there are other methods of pension saving which do provide tax relief.

Member Portal

Our Member Portal allows members to access their pension information securely at any time.

Our primary method of communication with members is electronic so we really encourage you to register for the Portal to stay up to date.

To register or learn more about our Portal

Annual Benefit Statement

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 have more than one deferred pension in the LGPS in England or Wales, then each deferred pension will be treated as above and joined to your new pension, unless you elect to keep that particular deferred pension separate.

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.

Multiple employments

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.

New member information

You can find the following documents on our Forms page:

LGPS Starter information booklet
Pension transfer booklet (you can transfer in a previous pension within the first 12 months of joining the LGPS)
Death grant 'expression of wish' form

Forms

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 in accordance with for the cost of living.
This cost of living increase takes place on 6 April. (Note, before 2023, the increase occurred on 1 April.)
The increase in CPI to September 2023 was 6.7%, so the increase in CARE pension at 6 April 2024 is also 6.7%.

Example

Chris is in the main section of the scheme from 1 April 2022 to 31 March 2023 and earns £24,500 in that year.

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.

To ensure that the pension keeps its value, the total pension account is adjusted in line with the cost of living (currently based on the Consumer Price Index). The cost of living adjustment was 10.1% for the scheme year ending 31 March 2023, so Chris's total pension account is increased to £550.50 on 6 April 2023 (cost of living increase date).

If Chris had been in the 50/50 scheme section for the year ending 31 March 2023, 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:

Annual pension

Your final pay ÷ 60 x the number of years/days you have been in the scheme.

Example:

Final pay = £30,000

No of years and days in scheme = 2 years 11 days

2 years 11 days = 2 + 11/365 = 2.03 years

Pension = 30,000/60 x 2.03 = £1,015.00

Lump sum

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

Annual pension

Your final pay ÷ 80 x the number of years/days you have been in the scheme.

Lump sum

An automatic lump sum of:

Your final pay ÷ 80 x the number of years you have been in the scheme x 3.

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.

Death grant

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:

You can complete, update and view your expression of wish on the Member Portal. If you need the form in an alternative format, please see our resources page.

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.

Partner's pension

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 which can found on the forms page.

Children's pensions

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 the member at the date of the member's 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.

Councillors

The LGPS scheme for councillors in England became a closed scheme on 1 April 2014. No new councillors can join the scheme. For details of the scheme, see Leaflets and guides.