Leaving the scheme early

Local Government Pension Scheme - leaving the scheme early.
If you are leaving the scheme before retirement there are several options you can choose from. The options depend on how long you have been a member and whether or not you transferred membership from another scheme when you first joined. 

Refund of contributions

If you have less than three months membership and you have:

  • not transferred in any other pension rights

  • no other LGPS benefits elsewhere (e.g. frozen refunds, deferred LGPS benefit, pension credit awarded as a result of divorce, LGPS pension, hold an ongoing concurrent employment in the LGPS).

then you can claim a refund of your contributions. Only your contributions are refundable, not those paid by your employer.

Your refund payment will amount to less than your gross pension contributions because we have to make  deductions for tax and National Insurance.

If you wish to delay your claim for a refund − say you anticipate further pension scheme membership and may wish to transfer out in future − your contributions will be frozen.  If you then claim your refund more than 12 months after your date of leaving interest will be added for the period of the delay.

If you wish to claim a refund you must wait for one month and a day after your date of leaving.  You are then required to complete and return a declaration form.

Preserved Benefits

If you have:

  • at least three months membership

  • transferred in any other pension rights

  • other LGPS benefits elsewhere (e.g. frozen refunds, deferred LGPS benefit, pension credit awarded as a result of divorce, LGPS pension, hold an ongoing concurrent employment in the LGPS).

you will be awarded a preserved benefit which will be paid when you reach normal retirement age. 

Transfer of Benefits

As an alternative to a refund or preserved benefits you may wish to transfer the value of your LGPS benefits to another pension arrangement. It may even be possible to transfer to an overseas pension scheme.

A transfer payment represents the cash equivalent value of your LGPS benefits at the time of the transfer. Any cash equivalent transfer value quotation is valid for 3 months from the date of calculation.

You may wish to take independent financial advice before making this decision. If a transfer payment is made, you will not be entitled to any further benefits from the LGPS for yourself, your spouse, civil partner or dependants.   

You cannot transfer your benefits if you leave less than one year before your normal retirement date .

Choice

Whichever choice you make, you may want to ask an independent financial advisor before you finally make a decision.

This information is provided to assist and inform employees. It should not be treated as a definitive statement of law and nothing in it can override the regulations.

Download the a Leavers Option Form below or Call Derbyshire on 08 456 058 058.

Related documents

The following document is in Portable Document Format (PDF). You can download the PDF software for free from the Adobe website (opens in a new window)

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