Councillors LGPS pensions

An update on the position for councillor members of the LGPS in England following changes introduced on 1 April 2014.


It includes:

  • background to the changes to councillors' pensions in England
  • impact on councillors' access to the LGPS
  • options available on leaving the scheme
  • further information.

Background

On 19 December 2012, nine years after the introduction of LGPS Councillors' Pensions a written ministerial statement by local government minister Brandon Lewis MP (opens in a new window) announced that the Government's intention was to remove access to the LGPS for councillors in England and that a consultation would follow.

That consultation entitled 'Taxpayer-funded pensions for councillors and other elected local office holders' ran from April 2013 to July 2013 and provided three options, including an option to remove access to the LGPS from April 2014, a two-tier membership option depending on a councillor's position or level of responsibility and an option not to change and to continue providing councillors with ongoing access to the LGPS. The consultation is attached to this page.

The Government's final position on the treatment of elected councillors (and elected mayors) was made known in March 2014 when the LGPS (Transitional Provisions, Savings and Amendment) Regulations 2014 (opens in a new window) were made and laid. These regulations remove access to the LGPS from 1 April 2014 for councillors and elected mayors in England and for the Mayor of London and members of the London Assembly, with the following exceptions:

  • councillors, elected mayors, the Mayor of London and members of the London Assembly who were members of the LGPS on 31 March 2014 will retain access to the LGPS up to the end of their current term of office only (or to age 75 if earlier).

The changes do not affect councillors in Wales and they retain ongoing access to membership of the LGPS.

This information is for councillors in England and should be used as addendum to the 'Guide to the LGPS for Eligible Councillors'.

Access to the LGPS

If you are a councillor or elected mayor in England who was a member of the LGPS on the 31 March 2014 you will continue to pay pension contributions and build up pension benefits in the LGPS. You will cease to be a member of the scheme at the end of your current term of office (the term you were serving on 31 March 2014) unless you elect to opt-out of the scheme or reach age 75 before the end of that term of office. You will not be permitted re-entry to the scheme if you are re-elected (either immediately or subsequently) in the future.

If you were not a member of the scheme on the 31 March 2014 then you will not be permitted to join the scheme for the remainder of your term of office.

If you do choose to opt-out of the LGPS before the end of your current term of office and you were a member of the scheme on the 31 March 2014 then you can elect to opt back into the scheme for the remainder of your current term of office.

A term of office ends on the fourth day after the ordinary day of election of councillors, with a new term of office commencing on the same day as the old term ends.

Options available on leaving the scheme

If you are a councillor or elected mayor who ceases to be a member of the scheme at the end of your current term of office, or you opt out of membership of the scheme before then, you will be able to elect to draw your pension benefits at the end of the term of office provided you are 60 or over by then. Pension benefits paid before age 65 may be subject to an actuarial reduction and pension benefits paid after age 65 are paid at an actuarially increased rate - please see the early and late retirement sections of the 'Guide to the LGPS for Eligible Councillors' for more information. 

If, when your term of office comes to an end, you are under age 60 you will be awarded deferred benefits in the scheme. These would become payable at age 65 unless:

a) you choose to defer payment beyond that age, up to your 75th birthday at the latest, or

b) you elect to have them paid on or after age 60 and before age 65 (without the need to obtain your council's consent), or

c) depending on your council's published discretions policy, you request payment on or after age 50 and before age 60 (but you would need your council's consent for the benefits to be paid), or

d) you become, because of ill health or infirmity of mind or body, permanently incapable of discharging efficiently the duties of the office you had held in which case the deferred benefits can immediately be paid, regardless of age.

Benefits under (a) would be paid at an actuarially increased rate, because the benefits would be paid after the scheme's normal pension age.

Benefits under (b) and (c) would be subject to an actuarial reduction, because the benefits would be paid earlier than the scheme's normal pension age (although some or all of your benefits could be protected from the reduction if you were contributing to the scheme on 30 September 2006 and you are a protected member as defined in the 'Guide to the LGPS for Eligible Councillors'). Your council can agree not to make any reduction on compassionate grounds.

If your benefits are paid under (c) on or after age 50 and before age 55 they would be subject to a tax charge under the Finance Act 2004. This would be in addition to the normal PAYE tax on your monthly pension.

Benefits under (d) would not be subject to any actuarial reduction for early payment.

As an alternative to a deferred benefit you may be able to transfer the value of your accrued pension rights to another pension scheme. Please see the 'ceasing to be a councillor before retirement' section of the 'Guide to the LGPS for Eligible Councillors' for more information.

Additional information

Police and Crime Commissioners (PCCs) retain access to the LGPS in England - see paragraph 1.17 of the consultation document 'Taxpayer-funded pensions for councillors and other elected local office holders' for details.

This information covers the changes introduced from 1 April 2014 to the LGPS for councillors in England. It should be read in conjunction with the Guide to the LGPS for Eligible Councillors.

Any queries regarding your pension benefits should be directed to your administering authority (opens in a new window) directly.

This information is for councillors (and elected mayors) in England and reflects the provisions of the LGPS at the time of publication (May 2015). This update is a brief guide to the changes introduced to the LGPS for councillors in England and cannot cover every personal circumstance. This update should be read in conjunction with the Guide to the LGPS for eligible councillors. In the event of a dispute over your pension benefits, the appropriate legislation will prevail. This information does not confer any contractual or statutory rights and is provided for information purposes only.

Related documents

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

The following document is in Word format. You can download software to view Word documents for free from the Word viewer page (opens in a new window) of the Microsoft website.