Statements are prepared by the end of August each year.Annual Benefit Statements for members paying into the Scheme on 31 March each year are an estimate of your benefits earned to date, based on the information provided by your employer.
The annual newsletters to members are sent out over the summer period. Your annual benefit statement will be available by logging into My Pension Online, choosing documents and forecasts, by 31 August each year.
If you've not received any communication from us, it could be that we don't hold a current address for you, or that we've an out of date address for you.
Please register and log in to My Pension Online to update your address. If you're paying into the Scheme, make sure you also let your employer know your new details as they may overwrite any updates made on our system.
Please ensure you include both your previous address we may hold and new address to allow us to update your record.
The Local Government Pension Scheme (LGPS) is a Defined Benefit pension scheme, which guarantees to provide you with an income for life. While other pension schemes such as Defined Contribution schemes offers flexible access to your pension through drawdown allowing members to take 25% of their pension pot tax-free from the age 55, there is no provision in the LGPS to take a lump sum without taking the rest of your benefits.
If you get divorced, or your civil partnership is dissolved, you may have to consider what happens to your LGPS benefits. You may wish to get legal advice from your solicitor on how to deal with your LGPS benefits as part of any divorce/dissolution settlement. You may require information such as an estimate of the cash equivalent value (CEV) of your pension rights if you are going through a divorce or dissolution. You can request one current CEV of your pension rights per year free of charge. A current CEV will cover your total benefits and won’t be proportioned over your period of marriage. If you are a deferred member you can obtain a CEV from the My Pension Online service which you can save and print. A current CEV can’t be used for pension sharing purposes. If you are a pensioner, we can’t give you a current CEV.
If you require the CEV (Cash Equivalent Value) proportioned over the period of marriage a fee is charged. A proportioned CEV is required if you are entering into a Pension Sharing Agreement. The fee is as follows:
If you require a proportioned CEV, an invoice will be sent to you on receipt of this form by the Fund. No information can be provided until the fee has been paid.
Divorce or annulment proceedings must have begun under one of the following:
Download the divorce and dissolution form and return the form to us. The quickest way to do this is to use the document upload facility using the My Pension Online.
The LPGS gives you:
The LGPS covers employees working in local government and for other organisations that have chosen to participate in it. To be able to join the LGPS you need to be under age 75 and work for an employer that offers membership of the scheme. If you are employed by a non-local government organisation which participates in the LGPS you can only join if your employer nominates you for membership of the scheme. Police officers, operational firefighters and, in general, teachers and employees eligible to join another statutory pension scheme (such as the NHS Pension Scheme) are not allowed to join the LGPS.
If you start a job and are eligible for membership of the LGPS, you’ll be brought into the Scheme by your employer automatically if you have a contract of employment for 3 months or more.
If it is for less than 3 months and you are, or become eligible, you’ll be brought into the scheme from the next pay period :
If you are brought into the scheme you have the right to opt out. You can’t complete an opt out form until you have started your employment.
You can:
• take a refund of the contributions you have paid less tax
• transfer your pension to a new pension arrangement, you may need independent financial advice before you can do this if the transfer is over £30,000.
If you have more than 2 years’ membership, you won't be able to get a refund. Instead, when you leave the Scheme, you have two options:
• You can choose to keep your pension in the Scheme until your pension is due for payment - this is known as deferred pension
• You can transfer your pension to a new pension arrangement, you may need independent financial advice before you can do this if the transfer is over £30,000.
If you leave the scheme with less than two years' membership, don't hold LGPS pension rights in any other Scottish Fund and didn't transfer membership into the Scheme, you can be refunded your contributions or can transfer them to another pension scheme. If you opt for a refund, this is the contributions you paid only and will be less tax.
Your employer will provide details of the contributions paid to for us to refund or defer your benefits. If you choose a refund, we'll send a form to complete and provide us with your bank details.
Step 1: Go to Online Account setup
Step 2: Enter your details. You’ll need:
Once you’ve entered all your details, click ‘Next’ and we’ll send you an activation email if we hold the same email address you've used. If you've used a new or different email to the one we hold we'll be in touch to verify your details are correct the next working day. We'll then send you an activation email.
Step 3: Click on the link in the email we send you to complete the final step by choosing a username, password and security response.
I've been sent an activation code, how do I register?
Step 1: Go to Online Account setup
Step 2: Enter your details. You’ll need:
Step 3: You will be taken to a registration screen to complete the final step by choosing a username, password and security respons
Watch the video to guide you through the process of registering.
If you are paying into the Scheme you can choose to leave your job and retire to take your pension from age 55 to 75, provided you have 2 years scheme membership.
Leave your job and take pension early
If you are age 55 or over, you can choose to take your pension before your Normal Pension Age (linked to State Pension Age with minimum of age 65). Your benefits will normally be reduced for early payment. If you were paying in to the LGPS at any time between 1 April 1998 and 30 November 2006, some or all of your benefits paid early could be protected from the reduction if you have rule of 85 protection. Please remember, if you have any Rule of 85 protection, this will only apply if you take your benefits after age 60.
Take your pension without reduction
Your pension can be paid in full when you reach your Normal Pension Age (linked to State Pension Age with minimum of age 65).
Keep working and take it late
If you take it later, it’ll be increased because it’s being paid later. You must take your LGPS benefits before your 75th birthday but can keep working and paying. It will also be enhanced for late payment. The factors for late payment are set by the Government’s Actuary Department and can change.
Deferred members
If you hold a deferred pension, you can also take payment of this at any time from age 55, though a reduction may apply if you take payment before your Normal Pension Age. Please note that, if you had opted out, your deferred benefits can only be paid if you have left the employment in which your pension was built up. We will confirm this with your former employer before paying your pension.
The Local Government Pension Scheme (LGPS) is a Defined Benefit pension scheme, which guarantees to provide you with an income for life. While other pension schemes such as Defined Contribution schemes offers flexible access to your pension through drawdown allowing members to take 25% of their pension pot tax-free from the age 55, there is no provision in the LGPS to take a lump sum without taking the rest of your benefits.
If you are a Member paying in or still employed in the job you paid into the scheme.
Voluntary retirement
You choose to take your benefits and don’t need your employer’s permission. To take your benefits, you must leave the job you are paying into the pension scheme for before your pension can be paid.
Flexible
From age 55 your employer can agree to you reducing your hours or pay and take all or some of your pension benefits. If you take flexible retirement before your Normal Pension Age your benefits may be reduced for early payment unless your employer agrees to waive the reduction in whole or in part. You can work in your job on reduced hours or grade and continue to pay into the LGPS to build up further benefits in the scheme. To see what benefits you would get, use the My Pension Online calculator to the date you would start flexible retirement. You will also find a video to show you how to use the calculator. The figures would include any reduction for early payment. Contact your employer to find out their policy on flexible retirement and to appy. You can view an estimate of your benefits from age 55 using the My Pension Online service.
Redundancy
If you are made redundant or leave under business efficiency and are:
A reduction may apply if you take your pension before your normal pension age (the date your benefits are paid in full). You can estimate your benefits using the calculator within the My Pension Online service and choose the Redundancy calculator.
Ill health
If you have to leave work due to illness you may be able to receive immediate payment of your benefits. To qualify for ill-health benefits, you have to have at least 2 years in the pension scheme or have transferred in other pension rights and your employer, based on an opinion from an independent specially qualified doctor, must be satisfied that you will be permanently unable to do your own job.
Ill-health benefits can be paid at any age and are not reduced on account of early payment - in fact, your benefits could be increased to make up for your early retirement. There are graded levels of benefit based on how likely you are to be capable of obtaining gainful employment after you leave. The different levels of benefit are:
If you are part-time, any extra membership awarded due to ill-health retirement will be reduced to reflect your part-time hours at leaving. If you were in the LGPS before 1 April 2009 there is protection to ensure that the extra membership you receive is no less than under the Scheme as it applied before 1 April 2009.
If you have to leave work because of ill-health but you do not qualify for ill-health retirement benefits because you are not permanently incapable of carrying out your job, then your employer may be able to make to make a one-off lump sum payment to you. If you wish to be considered for ill health retirement, contact your employer.
To increase your pension when you retire, you can pay extra to purchase additional benefits or pension with either Additional Pension Contributions (APCs) or Additional Voluntary Contributions (AVCs). These extra contributions are normally taken from your pay by your employer, just like your normal contributions and are deducted before your tax is worked out. So, if you pay tax, you receive tax relief (at your highest rate) automatically through the payroll or if you're paying into your APC as a lump sum we'll issue a tax certificate to give to HMRC to claim back your tax.
If you're choosing to make extra contributions voluntarily, your employer doesn’t pay into these. If you are absent from work with your employer permission (other than sickness or injury) you can read more about how to buy back lost pension.
You can buy extra pension by paying APCs regularly, over a period of time, or as a one-off lump sum. APCs allow you to buy extra pension for you only and not for additional dependants’ benefits. You'll have to submit a medical certificate, obtained at your own expense, to apply. APCs are based on working to your Normal Pension Age which is linked to your State Pension Age. Your normal pension age is the age from which you can retire and receive your pension in full. You can check your normal pension age by looking up your current State Pension Age. If you take your benefits before this age, your Additional Pension Contributions will be reduced. You also can’t start an Additional Pension Contributions contract whilst in the 50/50 section of the scheme.
If you leave employment before you have finished paying for your APCs then a pro rata calculation is made to work out how much of the original pension contract has been bought. It’s not possible for you to pay the unpaid additional contributions on leaving early. If you retire on Tier 1 or Tier 2 ill-health grounds then all contributions will be deemed to have been paid and full pension being bought will be added to your pension account.
The amount it costs depends on how much extra pension you want to buy, the age you start paying the extra contributions and the length of time you want to pay them for. The APCs calculator will show you the costs of buying pension and help you decide. The maximum amount of additional annual pension you can add to your pension is £6,923 for 2020/21
AVCs allow you to pay more to build up extra savings for your retirement. When you save AVCs you pay money into a separate AVCs plan to provide additional benefits to your main Local Government Pension Scheme (LGPS) benefits. You choose how the money in your AVC plan is invested. As with all investments, the value may go up or down and you should review your AVCs regularly.
You can pay up to 100% of your pensionable pay (subject to other deductions made by your employer) into an AVCs. You can choose to pay a fixed amount or a percentage of your pay, or both, into an AVCs – as long as it doesn’t exceed 100% of your pay. AVCs are deducted from your pay, just like your normal pension contributions. You can only pay into your AVC from your regular pay.
Deductions start from the next available pay period after you’ve set up the AVC. You may vary your contributions or cease payment at any time while you are paying into the LGPS. You can pay an AVC if you are in either the Main or 50/50 section of the LGPS. When you retire you must stop your AVCs at least one month before your retirement date.
Though pension saving is often tax-efficient, you should always consult an independent financial adviser as Annual and Lifetime Allowance limits apply to the amount of pension you can build up before you may have to pay tax.
Your LGPS, AVCs and APCs contributions are deducted before your tax is worked out, so, if you pay tax, you receive tax relief automatically through the payroll. Although most people will be able to save as much as they wish into these, the amount of pension tax relief you can receive is limited. AVCs and APCs contributions are taken from your pay before tax. Any money you would normally pay as income tax automatically goes into your APCs or AVCs pot instead as you can see below. If you pay tax at a higher rate, your tax savings will be higher. If you don't pay tax, you won't benefit from tax savings. If you are paying into your APCs as a lump sum we issue a tax certificate which they can give to HMRC to claim back tax.
How your Pension Increase is applied
If your pension includes Local Government Pension Scheme membership between 6 April 1978 and 5 April 1997, your pension will include an element known as a Contracted-out Pension Equivalent (COPE), previously known as Guaranteed Minimum Pension (GMP).
If your pension includes COPE/GMP earned up to 5 April 1988 then the increase on this part of your pension will be paid with your State Pension. If your pension includes a COPE/GMP element earned on or after 5 April 1988, this will be paid by the Fund.
Following the recent Government consultation on who will pay the increases on COPE/GMP payments, it has been announced that if your pension includes COPE/GMP payable on or after 6 April 2016 and before 6 April 2021, the increase will be paid by the Fund and includes any pre-1988 COPE/GMP
Following the UK Government consultation, it has been announced that a decision is still to be made regarding members who have a State Pension Age on or after 6 April 2021. We’ll let you know via our website and in a future issue of Penfriend when the decision has been made.
If you already live out with the UK or are moving abroad, your Fund pension can be paid directly into your overseas bank. Payments can normally be made in the currency of residence but in certain circumstances can be paid in another currency (eg sterling) as long as your bank account can accept payments in that currency. Your pension payments will be made through Crown Agents Bank international electronic payment systems directly to the bank account you give us and in the agreed currency. There’s no charge for this as the Fund meets the costs. Download an overseas payment form and return it using the My Pension Online service document upload facility. If you choose to have your payment made into an overseas bank account, it’s important you know that the exchange rate applied is not fixed and will vary according to the market rate valid at the time of conversion. This means that although your sterling pension payment won’t change, the local currency value will go up or down depending on the exchange rate, which happens at present with cheque payments. Payment will be made around the 15th of each month and should normally reach your account in three to five working days after this. Alternatively, you can provide a UK bank account and we can pay your pension into a UK account in your name.
Each year we need to ensure pension payments are being made to the correct person and check our records are correct and up to date for those members living abroad. This is part of our anti-fraud measures and safeguards the pension fund’s assets.
We have partnered with Crown Agents Bank to carry out this verification on our behalf. You can find out more about the process here.
Your pension Annual Allowance is the maximum that you can build up in your pension in a tax year, the maximum amount for the 2020/21 tax year is £40,000 although it may be lower if you are affected by Tapering or have triggered the Money Purchase Annual Allowance (MPAA).
As Lothian Pension Fund is a Defined Benefit Scheme, this is calculated based on the increase in your benefits each year instead of the amount you or your employer have paid in.
You can find out more information regarding Annual Allowance on the Government website and by reading these factsheets which include information on both the Annual and Lifetime Allowances.
If you've exceeded your Annual Allowance in a given year, you can carry forward any leftover allowance from the previous three years to cover the excess e.g. if you exceeded the 2020/21 Annual Allowance, you can carry forward unused allowance from 2017/18, 2018/19 and 2019/20.
This means that while you may have exceeded your Annual Allowance, the taxable amount exceeding the Annual Allowance limit may be lower. If you look at your Annual Allowance information on the My Pension Online service, you'll see that we automatically apply any carry forward based on the information held for you in previous years. This is based on the assumption that you've a standard Annual Allowance of £40,000 for each year and have only contributed to Lothian Pension Fund during the input period.
You can see further information on unused Annual Allowance and carry forward here and also check your Annual Allowance using the calculator.
You can view details of your Annual Allowance through the My Pension Online service, just log in and go to “Employment Detail” then choose “Financial Details and Annual Allowance” and you can see the information that we hold.
Please note that Annual Allowance was implemented in 2008 so you won't find any data prior to that year.
You can get an estimate using the benefit projector/calculator on My Pension Online to estimate your pension.
You can see how much pension you may be paid if you use our online service. You can choose any date from age 55 onwards.
Step 1: Sign in or register for My Pension Online. You will also find a video to show you how to use the calculator.
Step 2: Go to Pension Benefit and choose Benefit Projectors then Voluntary Retirement from age 55.
Step 3: Change the date to when you want to receive your pension and amend the pay if necessary. Click calculate.
Step 4: Your figures for that date will be shown and along with any reduction that may have been applied for early payment.
For more information, please refer to the Retirement Process page.
Statements are prepared by the end of August each year. Annual Benefit Statements for members paying into the Scheme on 31 March each year are an estimate of your benefits earned to date, based on the information provided by your employer.
The annual newsletters to members are sent out over the summer period. Your annual benefit statement will be available by logging into My Pension Online, choosing documents and forecasts, by 31 August each year.
Log in to My Pension Online and click on the Dashboard move down to the section called ‘payroll’and choose the option Payslip or P60 end of year certificate. Click on one and now you get to the page where can see your current pay period information or P60 depending on the option you chosen. You can swap between the current period and older documents by clicking on the dates on the left. You are able to print the payslips and P60 from March 2020 onwards.