Leaving the scheme

The LGPS has a minimum 'vesting period' of two years. This means that if you have less than two years of membership, you don't qualify to receive a pension or deferred benefits and will get a refund of your contributions instead.

You meet the two-year vesting period if

• you've been a member of the LGPS (in England or Wales - this doesn't apply in Scotland) for two years, or
• you transferred pension into the LGPS from another occupational pension scheme or from a European pensions institution, and
  • you had two or more years membership in that scheme or institution, or
  • your membership in that scheme or institution when added to your LGPS membership totals two or more years, or
• you already have deferred benefits or are getting an LGPS pension in England or Wales (other than a survivor pension or pension credit member pension).

Those who meet the vesting period can find out more about deferred benefits here and claiming a pension or retiring here. 

If you leave (or opt out of) the pension scheme with less than two years’ membership, and don't meet the 'vesting' rules described above, you will be due a refund of your pension contributions less deductions for tax relief.

Your employer will tell us if you leave or opt out of the scheme so we can contact you about the refund.

You'll also have the option to transfer the pension you've built up, however small, into another pension scheme.  

Ill-health pension benefits* can be paid at any age but you must meet the minimum 'vesting period' (see above) of two years' membership to qualify.

*Not all types of ill health qualify for an ill health retirement. Find out more about ill-health retirements here.

As long as you've been in the scheme for two years when you leave it, you'll qualify for a pension or deferred benefits

The minimum pension age for the scheme is 55 (except for ill-health retirements). If you leave under age 55 you will get deferred benefits.

Find out more about deferred benefits here and claiming a pension or retiring here.

Ill-health benefits* can be paid at any age and are not reduced because of early payment, as long as you have been a member of the scheme for two years (the 'vesting period'). There are tiers, or levels, of benefits based on how likely you are to be capable of working after you leave.

*Not all types of ill health qualify for an ill-health retirement.

Find out more about ill health retirements here.

It's your right to opt-out of the LGPS if you choose to. Depending how long you were in the scheme, you will get either a refund or  deferred benefits.

But remember that the LGPS is one of the best occupational pension schemes in the UK. Your employer meets a large part of the cost of providing the excellent range of secure benefits, so it’s an extremely valuable and important part of your employment package. If you’re thinking of opting out of the LGPS, you should carefully consider the benefits you would be giving up. 

1. You get a guaranteed pension for life that goes up every year in line with the cost of living
2. You can give up part of your pension for a tax-free lump sum
3. You get a pension at any age if you become too ill to work*
4. You can retire from age 55 if you’re made redundant or your employer consents*
5. You can retire from age 55 on reduced benefits*
6. If you die there’s a lump-sum death grant of three times your pay – and you can choose who it goes to
7. If you die, there’s a pension for your spouse, civil partner or eligible cohabiting partner
8. If you die, there are pensions for your (eligible) children if you die
9. You can pay extra to increase your pension benefits
10. You get tax relief on your pension contributions **
11. There are no hidden fees or charges
12. For every £1 you pay into the scheme your employer pays an average of £2
13. Your pension benefits are guaranteed in law and not affected by share prices or the stock market
    
    *a minimum membership requirement applies
    ** a basic rate taxpayer paying £100 pension contributions would pay £20 more tax every month by opting out.

If you opt out of the pension scheme, what you are entitled to  depends on your membership of the scheme as follows.

You have less than three months' membership
You’ll be treated as never having been a member and you’ll get a refund of your contributions through your pay.

You have between three months' and two years' membership
You'll be entitled to a refund of contributions from the pension scheme.

You have more than two years' membership (or you have other LGPS benefits)
You’ll be awarded deferred benefits in the scheme. Read more about deferred benefits here

You have transferred your other pension rights into this scheme
This might affect your entitlement to a refund of contributions.

You might also be able to transfer your pension rights to another scheme. Read more about transferring your pension here.

If you decide to opt out of the scheme download a form here or phone us for one on 01274 434999.

Could I pay less instead of opting out?

If you opt out you're giving up quite a lot. To stay in the pension scheme for less and keep most of the benefits, one option is 'going 50/50', which means paying half contributions for a while. Find out more about 50/50 here. Remember that if you pay half contributions you will get half the pension for those contributions.