If you leave your job before you are able to take your pension your benefits are put on hold. You can access your benefits from age 55 however they may be reduced as you are receiving them before your normal pension age. After leaving, we will inform you of the options available to you.
Your options will depend on how long you have been a member and when you leave the Scheme:
- Within three months of joining: you are treated as though you have never been a member of the Scheme. You will be paid a refund of your contributions through your employer’s payroll.
- Between three months and two years of joining: you will be able to take a refund of contributions, leave your benefits on hold or transfer them to another pension scheme. If you have other Local Government Pension Scheme (LGPS) membership, or have transferred in any other pension benefits, then this might stop you from having a refund.
- After two years: you can leave your benefits on hold or can transfer them to another pension scheme. We cannot pay your benefits to you as a pension until you have left your job (the employment that you opted out of) and have reached age 55.
You may also be able to opt out of the scheme without leaving your job. Please be aware that your employer usually must re-enrol you into the LGPS every three years by law.
Opting out is when you decide to stop paying in to the pension scheme, although you are continuing in your job.
Please think carefully before deciding to opt out. Your LGPS pension is a valuable benefit.
From the day you join the LGPS, you start to build up a guaranteed income that you could receive from age 55 for the rest of your life. You get valuable life cover, dependant’s pensions and ill health cover. On average your employer pays three times the amount you pay into the Scheme.
Other things to consider include:
- You receive tax relief on your contributions so it may not be costing as much is you think.
- You receive ill health and death in service cover.
- What income will you have in retirement? Will there be enough to provide for your plans when you retire?
Before opting out, you could consider moving to the 50/50 section of the Scheme which offers a lower cost of membership for reduced benefits.
How do I opt out?
You can opt out by completing the opting out form and returning it to your employer. Your membership will stop either on the date you sign the form or on the date you specify as your leaving date.
If you leave within two years of joining, you might be able to choose to take a refund of your contributions. If you take a refund, this means that you will no longer have a pension with us.
What do I need to think about before choosing to take a refund?
There will be a deduction for any tax relief, and a national insurance deduction for any membership before 6 April 2016 to put you back into the State Second Pension Scheme (S2P).
We can refund your contributions once a month and two days have passed since you left. We will add interest if we pay your refund more than 12 months after you have left.
We will not pay a refund if:
- you re-join the LGPS in England or Wales within a month and a day of leaving
- you re-join the LGPS before we pay your refund to you
- you hold another job in which you are a member of the LGPS and that you held at the same time as the job you have left. In this case, you must combine your benefits
- it is more than five years since you left the LGPS.
If you re-join the LGPS after having previously left an LGPS employment without building up pension rights, but you deferred taking a refund of contributions, then this deferred refund must be joined with your new employment.
How do I request a refund of my contributions?
When your employer tells us that you have left your job or opted out of the Scheme, we will contact you to confirm your options. You can then let us know that you want a refund by completing and returning the form provided by us. You will be able to access the form and accompanying information in your My Pension account. If you have elected for paper communications we will also send you a paper copy.
You don’t have to decide straight away. You must tell us before five years have passed or you will lose this option.
You may be able to transfer your benefits to a different pension scheme if you leave the Local Government Pension Scheme (LGPS) as long as you have been paying in for at least three months.
To do this you:
- must no longer be paying into the LGPS with either Greater Manchester Pension Fund (GMPF) or another LGPS fund
- must not be receiving a pension from the LGPS (other than a spouse’s, civil partner or cohabiting partner’s pension, or a pension obtained from a pension credit following a divorce or dissolution of a marriage or civil partnership)
- must not be retiring immediately due to redundancy, business efficiency or ill health reasons
- must be more than 12 months away from normal pension age (the age that you can take your pension and any lump sum in full) or before any guaranteed minimum pension (GMP) you are entitled to is payable (if you have a GMP this is payable at age 60 for women and age 65 for men)
- must be transferring your benefits to an Her Majesty’s Revenue and Customs (HMRC) registered pension scheme
If you have more than one set of benefits on hold in the LGPS in England and Wales (in the same or separate LGPS funds), then you will need to transfer all of them or none of them to your new chosen scheme.
A pension credit awarded following a pension sharing order from a divorce or dissolution of a marriage or partnership can be transferred independently of your main scheme benefits.
We have to complete checks before completing the transfer process. Confirmation that the scheme is approved from HMRC can sometimes take weeks.
If the transfer is to an overseas scheme we will also need a signed statement of benefits, a lifetime allowance (LTA) declaration form, a HMRC declaration form and proof of residency (if necessary). Please be aware that 25 per cent overseas transfer charge applies to some overseas pension transfers. More information can be found in the LGPS Scheme Administrator factsheet.
A cash equivalent transfer value (CETV) is the amount we would transfer to your new scheme in exchange for the pension benefits you have built up with us.
You will need to ask us for a CETV if you are looking to transfer out. We will send you the first one free of charge. If you need another within 12 months, there will be a charge of £180 (inclusive of VAT).
You can request a CETV by:
- using the secure Contact Us from when logging into your My Pension account
- calling us on 0161 301 7047
- writing to us at Guardsman Tony Downes House, 5 Manchester Road, Droylsden, Manchester, M43 6SF.
We can only provide you with an estimated CETV based on your current pay if you are still paying into the Scheme at the time of your request.
Deciding whether or not transferring your pension rights is the best thing for you can be difficult. We recommend that you consider getting help from a financial adviser. For help choosing a financial adviser, visit the Money Advise Service website.
You will need to get financial advice if the transfer value (excluding AVCs) is £30,000 or more. You may still wish to get the help of a financial adviser even if the value of your benefits is below £30,000.
It is especially important to obtain financial advice if you are looking to transfer to one of the following types of pension schemes, due to the investment risks:
- A personal pension plan.
- A stakeholder pension scheme.
- A buy-out insurance policy.
- An employer's money purchase scheme.
Freedom and choice is the term used to describe a set of pension changes that were introduced by the Government in April 2015. These reforms gave members of defined contribution schemes who are age 55 or over more choice about how they take the money from their pension.
The LGPS is a defined benefit scheme, so was not directly affected by these changes. But they allowed LGPS members who have paid additional voluntary contributions (AVCs) to transfer their LGPS benefits and AVC benefits independently of each other.
To take advantage of these reforms, you would need to transfer to a different type of pension scheme. All of the above transfer criteria must apply to you if you want to do this.
For more information and frequently asked questions you should visit the LGPS member website.
Yes. Public sector schemes such as the teachers' or police pension schemes accept transfers although they do provide different benefits to those of the LGPS. If you want to transfer your GMPF benefits to another public sector pension scheme, you must apply to transfer them within 12 months of you joining their scheme.
Yes, additional voluntary contributions (AVCs) can be transferred to another pension scheme.
To do this you:
- must not have a pension or annuity obtained from an AVC in payment
- must not be paying into an AVC arrangement in an LGPS fund
- must be transferring it to an HMRC registered pension scheme.
If you have more than one AVC, then you will need to transfer all of them or none of them to your new chosen scheme, even if they are in several different LGPS funds. AVCs can be transferred separately to main scheme pension benefits.
Although this type of arrangement is defined contribution, it is not a drawdown product. Flexible access drawdown is a pension product that lets you access your pension savings whenever you need to while reinvesting your remaining funds in a way that is specially designed to provide an ongoing retirement income. You will need to transfer your AVCs to an arrangement that provides this if you are looking for this type of product.
So we can ensure you have all the information you need, please contact us before you contact your AVC provider if you wish to transfer your AVCs.
We suggest you get all the information you need to compare the benefits of both schemes properly. You should know what your benefits are worth in the LGPS as well as what you will get in your new pension scheme if you transfer them. You should be clear about which is best for you and why.
Remember that your LGPS benefits will automatically increase in line with the cost of living each year.
You will lose your entitlement to LGPS benefits once we pay a transfer to your chosen scheme. This includes your right to any survivor benefits that might have been payable upon your death.
If a payment is to be made we will request your birth certificate and in some cases your marriage certificate.
All pension schemes have rules about when and how you can draw your pension benefits to keep your money safe for your retirement.
Normally the earliest you can draw your pension is age 55 unless you retire due to ill health. If a company approaches you offering pensions liberation, saying they will help you to get your pension early using a legal loophole or another method, this could be a scam.
If you sign up for one of these schemes, the company running it could take most of your pension in charges, and because you have drawn it before you should, you may have to pay a hefty tax charge to HMRC.
Yes, you should be able to do this if you ask your new fund within 12 months of joining them. You should contact your new fund to find out how.
You will have an opportunity to tell us of any new employments when you receive the leavers declation form. You will be able to access the form and accompanying information in your My Pension account. If you have elected for paper communications we will also send you a paper copy.