Councillors Pensions

Local Government Pension Scheme for councillors.

Which councillors can join the Local Government Pension Scheme?
A council's scheme of allowances must set out which councillors can join the LGPS (an eligible councillor).

The council can only include those councillors who have been recommended by it's independent remuneration panel.

An eligible councillor can opt into the LGPS at any time prior to age 75 and remain in the scheme whilst they are a councillor until age 75. It is up to individual eligible councillors whether to join the LGPS or not.

How to join the LGPS
To join the LGPS, download and complete the option form at the bottom of the page and send it to the pensions section if you are a councillor for the council or to your council's payroll section if you are a councillor for a District Council. You will be brought into the scheme from the next available payday.

How much do you pay?
You pay six per cent of pensionable allowances - this can be less as you get tax relief on your contributions at the time they are deducted from your allowances and up to State Retirement age, you pay a lower rate of national insurance.

Your council's scheme of allowances says whether contributions are due on your basic allowance or special responsibility allowance, or both.

What are the benefits?

Retirement benefits
These are based on membership of the LGPS and career average pay and are calculated as follows:

Annual Pension = Membership in the LGPS/80 X Career Average Pay
Lump Sum = three X Annual Pension

You can take up to a maximum of 25 percent of the capital value of your pension benefits as a lump sum on your retirement - please see "changes to the scheme".

Death benefits
To be entitled to retirement benefits you need 3 months minimum membership in the scheme or retire at age 75.

Death in Service Lump Sum = two X Career Average Pay
Death on Pension Lump Sum = fives X Annual Pension less pension paid
Widow's or widower's and children's pensions are also payable - see full Guide for details.

Career Average Pay is the pensionable pay for each year ending 31 March increased (other than the final years pay) by the rise in the Retail Prices Index between the end of the relevant year and when the councillor member leaves active membership of the scheme.

The aggregate of each year's revalued pay is then divided by the total number of years to arrive at the career average pay.

When are retirement benefits payable?

At normal retirement age for councillors - age 65.
Voluntarily retirementfrom age 60 but your benefits may be reduced.
Retirement from age 50 with your council's consent but your benefits may be reduced your Council will have a policy on how they apply this discretion.
Immediate unreduced benefits are payable if you cease to be a councillor because of permanent ill-health. For pension purposes ill-health means incapable until age 65 of efficiently discharging the duties of that office.

What happens if I leave before then?
If you have at least three months membership and you leave before becoming entitled to the immediate payment of benefits, your benefits will be deferred for payment under normal circumstances until age 65.

If you have less than three months membership you can claim a return of contributions less tax and an amount for national insurance providing you have no other pension rights in the LGPS.

Do benefits increase?
Under normal circumstances Pensions increase each April, based on the Retail Price Index for the preceding September.

Deferred benefits are increased in the same way from the date membership of the scheme ceases.

What isn't included?
You cannot transfer other pension rights into the scheme, even from another LGPS fund.

You cannot purchase additional membership in the scheme.

There is no entitlement to the redundancy/efficient exercise early retirement provisions that apply to employees.

Can I pay more to improve my pension benefits?
Most councillors are able to increase their benefits by making Additional Voluntary Contributions (AVCs). You can pay up to 100 percent of your taxable earnings to the scheme AVC arrangement and get tax relief. The pension scheme has In-House AVC arrangements with Clerical Medical, Prudential and Standard Life. Contact the Pensions Section if you want details of these.

You may be able to pay contributions into a personal pension plan or stakeholder pension scheme. These options are explained in more detail in the Scheme Guide - see below.

If you have been paying AVCs by the scheme arrangement you may elect to take up to a 100% of the accumulated fund as a tax free lump sum provided it does not exceed 25 percent of the overall value of your LGPS benefits - see "changes to the scheme"

Want to know more?
A Guide to the LGPS for Eligible Councillors can be found on the Local Government Employers website (opens in a new window).

Pensions Section - Here to Help
If you have any questions contact the Pensions Section - they will be pleased to help.

This information is a general guide for councillors who are entitled to join the LGPS and cannot cover every personal circumstance. In the event of any dispute over your pension benefits, the appropriate legislation will prevail as this leaflet does not confer any statutory rights and is provided for information purposes only.