Employers must enrol or re-enrol their employees into a workplace pension to help them save more for retirement. The UK government’s aim is for more people to have another income, on top of the state pension, when they retire.
You can see the scheme benefits in the How your pension works section
You've the right to opt out of the scheme during the ‘opt out period’ which is 3 months from the date you're enrolled into the scheme. If you make a valid opt out in that period, you'll be treated for all purposes as not having become an active member of the LGPS on this occasion. Your employer will refund to you the contributions paid by you in the next payroll run.
If you opt out after more than 3 months in the scheme, you will be treated as a leaver, and we will contact you regarding your options. As you will still be working in your post, you will not be entitled to take payment of the pension you have accrued in your post until you leave the job it relates to.
If you have been enrolled or re-enrolled into the scheme by your employer and wish to opt out, download the form at the end of this page and, once complete, return it to your payroll department.
To help people save for their retirement the Government requires all employers in the UK to automatically enrol their workers into a workplace pension if they meet certain requirements. This is known as automatic- enrolment and already happens in the LGPS, with most new employees automatically joining the Scheme when they commence employment. Scheme members are able to opt-out of the LGPS at any time if they want to.
Under automatic enrolment if you are not already a member of the LGPS, you will automatically join the Scheme at the point in the future that you:
If you are automatically enrolled, you can choose to leave the LGPS by opting-out at any time. You can also view details of the different categories of worker and how they are impacted by automatic-enrolment below.
In the following table you can find out about the different categories of worker and how you may be affected under the automatic-enrolment rules.
|
What type of worker are you? |
How will automatic enrolment impact you? |
|---|---|
|
Age 22 or over; and You earn over £10,000* a year (or pro-rata in any pay period); Are under State Pension Age. |
Eligible jobholderYou will be automatically enrolled in the LGPS. |
|
You are 22 or over; but You earn between £6,240* and £10,000* a year (or pro rata in any period). |
Non eligible jobholderYou will not be automatically enrolled in the LGPS, but you can still join by contacting your employer. If you do not join, you will be automatically enrolled in the LGPS if you become an 'eligible jobholder' in the future. |
|
You do not meet any of the requirements above. |
Entitled workerYou will not be automatically enrolled in the LGPS, but you can still join by contacting your employer. If you do not join, you will be automatically enrolled in the LGPS if you become an 'eligible jobholder' in the future. |
* These are the pay limits in April 2021, they are subject to change each April. If you are unsure of the pay limits, then you should contact your employer.
Yes you can opt-out of the scheme but if you are thinking of opting out you might want to first consider an alternative option which is to elect to move to the 50/50 section of the scheme. The 50/50 section allows you to pay half your normal contributions in return for half your normal pension build up. To find out more, see the section on 50/50. Complete a form to apply or leave the 50/50 section.
If having considered the 50/50 option you still decide the LGPS is not for you, you can leave the LGPS at any time on or after your first day of eligible employment by giving your employer notice in writing by completing an opt out form. You might, however, want to take independent financial advice before making the final decision to opt out.
If you opt-out before completing 3 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 of the LGPS with 3 or more months membership and before completing the 2 years vesting period you may be able to take a refund of your contributions (less any statutory deductions) or transfer out your pension to another scheme.
To opt out, complete an opt out form and return it to your employer
If you opt out of the LGPS after meeting the 2 years vesting period you will have deferred benefits in the scheme and have options when you leave.
If you opt-out, you can, provided you are otherwise eligible to join the scheme, opt back into the scheme at any time before age 75.
If you opt out of the LGPS then:
Your employer must notify you if this happens. You would then have the right to again opt out of the LGPS. However your employer will normally automatically enrol you back into the LGPS approximately every 3 years from the date they have to comply with the automatic enrolment provisions provided, you are eligible.
However, in any of the above cases, your employer can choose not to automatically enrol you if:
On joining the LGPS relevant records and a pension account (for each employment in the scheme if you have more than one) will be set up and an official notification of your membership of the LGPS will be sent to you. You should check your payslip to make sure that pension contributions are being deducted.