You can leave the Local Government Pension Scheme (LGPS) at any time by completing an opt out form (PDF) .
The first time you opt out of the LGPS, you can re-join at any time as long as you are still an eligible Councillor.
If you opt out of the LGPS more than once, you will only be allowed to re-join at the discretion of your Council. However, if you become a Councillor for a new Council, you have 3 months to re-join the pension Scheme.
If you opt out of the pension Scheme before retirement, there are several options available to you.
If you have less than 3 months total membership of the scheme, you may qualify to receive a refund of your contributions less any deductions for tax.
You don’t have to decide what to do with your pension contributions immediately, you can wait until you re-join the Local Government Pension Fund as a Councillor member again or at any point when you decide you want to take a refund of your contributions.
If you have 3 months or more membership of the Local Government Pension Scheme (LGPS), your pension benefits will be calculated and held within the Fund. This is known as a Deferred Benefit.
Your pension will become payable at age 65 or later if you choose, or you can decide to transfer your deferred pension to another pension scheme. If you become too ill to carry on working your pension can be paid at any age without reduction for early payment.
You can apply for early retirement from age 50 and before age 55 with your Council’s consent, however, there will be a tax charge payable. You can retire from age 55 without your Council’s consent.
When you retire early your pension will be reduced for every year your pension is paid before age 65. However, if you joined LGPS before 1 October 2006 and you are a protected member, some or all of your benefits could be protected from the reduction. Your former Council does have discretion to waive any reductions on compassionate grounds.
You also have the option to transfer your pension to an overseas pension scheme or arrangement that meets HM Revenue & Customs conditions.
Transferring your Benefits
If you leave the Scheme more than 1 year before age 65 you may transfer the cash equivalent value of your pension benefits to another occupational pension scheme, provided they are willing and able to accept it, into a personal pension plan, into a buy-out insurance policy or stakeholder pension scheme (but not the LGPS England or Wales unless you again participate in the same LGPS as a Councillor Member)
Within the rules introduced by the Pensions Act 1995, any value quoted is guaranteed for 3 months from the date on which it was calculated. You must confirm in writing if you want to proceed with transferring your pension benefits within the 3 month guaranteed period.
When the paying Scheme receives your written instructions you want to proceed with the transfer, they need to pay the transfer value within 6 months of the Guarantee Date. If the Scheme does not make payment within this period, the transfer value will need to be recalculated at the date of payment. They will need to pay the higher of the recalculated value or original value plus interest.
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Find out if you are eligible to a State Pension, what you’ll get and how its calculated, plus lots more information.
Things to think about when thinking about opting out of the scheme.
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