Are you saving enough for your future?
Can you afford to live on your state pension? The maximum rate of the new state pension is £159.55 per week (2017/18).
You could start saving for your future now with the LGPS.
The LGPS is an important part of your employment package and provides an excellent range of benefits.
You pay your contributions and your employer pays too.
The scheme is flexible. You can choose to pay less or more, and you can draw your benefits anytime from age 55 to 75.
The benefits you get include a pension when you retire as well as immediate life cover and ill-health protection.
There are also benefits for your loved ones with pensions for dependants if you die.
The amount you pay depends on how much you are paid in your job. The rates vary from 5.5% to 12.5%, and your contribution rate depends on the band you fall into.
You get tax relief on your pension contributions, as your contributions are deducted from your pay before you pay tax.
You have flexibility to pay more. You can boost your pension by paying more contributions which you would get tax relief on. Options include Additional Pension Contributions (APCs) and Additional Voluntary Contributions (AVCs).
You also have flexibility to pay less, with the option to pay half your normal contributions in return for half your normal pension, known as 50/50. This is designed to help members stay in the scheme when times are financially tough.
Benefits at retirement
The LGPS is a great way to save for your future. You build up a pension from the day you join the scheme and once you've been paying in for two years you will get the following.
A secure pension
The LGPS provides you with a secure future income, independent of share prices and stock market fluctuations.
You have the option, when you draw your pension, to exchange part of it for some tax-free cash.
The freedom to choose when to take your pension
Your Normal Pension Age is linked to your State Pension Age but you do not need to have reached your Normal Pension Age in order to take your pension. You can choose to retire and draw your pension at any time between age 55 and 75. Your Normal Pension Age is simply the age you can retire and take the pension you've built up in full. Find out your State Pension Age
A tiered ill-health retirement package
If you have to leave work at any age due to permanent ill health the scheme provides you with a pension, paid straight away, which could be paid at an increased rate if you are unlikely to be capable of gainful employment within three years of leaving.
Early payment of your benefits
Your benefits may be paid early if you are made redundant or retired on business efficiency grounds and you are aged 55 or over.
Flexible retirement is available from age 55 if you reduce your hours, or move to a less senior position. Provided your employer agrees, you can draw some or all of your benefits, helping you ease into your retirement.
Protection against inflation when you've drawn your pension
You can look forward to a pension for life that increases with the cost of living.
Life cover from the moment you join the scheme, with a lump sum of three years pay being paid if you die in service.
Cover for your family
A pension for your spouse, registered civil partner or eligible cohabiting partner and for eligible children if you die in service or die after leaving with a pension entitlement.
Transferring into the LGPS
You can also transfer previous pension rights into the scheme. Deferred benefits held in the LGPS in England and Wales are normally automatically transferred, unless you decide within 12 months of joining the LGPS to keep them separate. For transfers from other pension schemes you may be able to transfer and you normally have 12 months from joining to opt to make a transfer.
You can leave the LGPS at any time once you are a member by giving your employer notice in writing. You might, however, want to take independent financial advice before making the final decision to opt out. And don’t forget you can, as an alternative, opt for 50/50 which allows you to remain in the scheme, building up valuable pension rights, but pay half your normal contributions for half your normal pension.
If you opt out before completing three months membership you will be treated as never having been a member and your employer will refund to you, through your pay, any contributions you have paid during that time. If you opt out with three or more months’ membership but less than two years you can take a refund of your contributions (less any statutory deductions) or transfer out your pension to another scheme. If you opt out after two years you will have deferred benefits in the scheme which can, if you want, be transferred out to another scheme. If you opt-out you can opt back into the scheme at any time before the age of 75, provided you are still eligible to join the scheme. However, if you opt out with the right to a deferred benefit you will not be able to aggregate your benefits should you re-join the LGPS at a later date.
If you opt out of the LGPS and your employer is required to comply with the automatic enrolment provisions under the Pensions Act 2008, your employer may automatically enrol you into the LGPS at certain times. Your employer must notify you if this happens. You would then have the right to opt out of the LGPS.
You can look forward to the future with confidence with the LGPS because the benefits you build up in the scheme are secure and set out in law.
How to join the LGPS
If you work for an employer offering LGPS and are under 75, you automatically join the scheme.
If you are employed by a designating body, such as a town or parish council, or an admission body, you can only join if your employer nominates you for membership of the scheme. An admission body is an employer that chooses to participate in the scheme under an admission agreement. These tend to be employers such as charities and contractors. If your LGPS employment is contracted out to a new employer, you have the right to remain in the scheme.
If you start a job in which you are eligible for membership of the LGPS you will be brought into the scheme if your contract of employment is for three months or more. If it is for less than three months and you are, or during that period become, an Eligible Jobholder you will be brought into the scheme from the automatic enrolment date (unless your employer issues you with a postponement notice to delay bringing you into the scheme for a maximum of three months) or if your contract is extended to be for three months or more or you opt to join by completing an application form, you will be brought into the scheme from the beginning of the pay period after the one in which your contract is extended or you opt to join.
Check your payslip deductions to make sure you are in the scheme.
Contact us for more information.