You can request payment of your deferred pension benefits through My Pension Online. You can watch a video showing the process of getting an online estimate then requesting payment for those who are approaching age 55 or over.
You can also transfer your benefits to another pension arrangement. Deciding to transfer your benefits is an important decision. You may wish to take independent financial advice before making this decision, and in some cases may be required to do so before your LGPS benefits can be transferred.
Your deferred pension can be paid from age 55 but will be reduced for early payment. The earliest date your unreduced benefits can be paid is shown on your forecast shown on the My Pension Online service. The only exception is where you opted out and continue to work in the same employment where your pension can only be paid once you leave that employment. If you left the Scheme after 31 March 2015, your Normal Pension Age is linked to the State Pension Age which is set by the UK Government and therefore may change in the future.
You can check your Normal Pension Age by looking up your current State Pension Age at www.gov.uk/calculate-state-pension.
You can request payment of your deferred pension benefits through My Pension Online. You can watch a video showing the process of getting an online estimate then requesting payment for those who are approaching age 55 or over.
I have Additional Voluntary Contributions (AVCs) attached to my deferred pension
If you have paid into an AVC account with Standard Life or Prudential, you have the option to take these at anytime from age 55 separate from your LPF pension. Please visit their websites for more information on these options.
If you wish to take payment of your AVCs at the same time as your LPF pension, you will have the following options:
- Take all or part of your AVCs as part of your tax free lump sum (limited to 25% of your pension value)
- Convert your AVCs to additional annual pension with LPF
- Convert your AVCs to additional final salary membership with LPF (AVC contract must have begun prior to 30 June 2005)
- Transfer your AVCs to purchase an annuity
Under current Government legislation, it is recommended that members take guidance from Pension Wise as part of taking payment of their AVC benefits. We will ask you to confirm if you have taken advice or opted out of this option when you retire. You can contact Pension Wise on 0800 100 166 or book an appointment on their website at www.moneyhelper.org.uk/nudge-public.
Stan is 64 when he decides to retire and take his benefits. His normal pension age is age 65.
His benefits are:
Pension = £4,000 a year
Lump sum = £11,500
As he is retiring 1 year early his benefits are reduced.
Pension = £3,784 a year (a 5.4% reduction)
Lump sum = £11,235 (a 2.3% reduction)
You can choose to take your deferred benefits after your Normal Pension Age but you must take them before you are 75.
If you take your benefits after your Normal Pension Age, your benefits are increased because they are starting later than expected.
When you take your pension, you can choose to swap some of it for a tax-free lump sum. Find out more in the cash lump sum section.
It may be possible to take your deferred benefits at any age on the grounds of ill health. But this must be approved through the Fund, and you will not be awarded any enhancement.
However, before determining whether to agree to a request we must obtain a certificate from an independent registered medical practitioner qualified in occupational health medicine as to whether in their opinion you are permanently incapable of discharging efficiently the duties of your relevant employment because of ill-health or infirmity of mind or body and, if so, whether that condition is likely to prevent you from obtaining gainful employment (whether in local government or otherwise) before reaching your normal retirement age.
If you think payment of deferred benefits on the grounds of ill health could apply to you please contact us.
Your deferred benefits will be reviewed each year and kept in line with the cost of living, until they start to be paid.
Once it starts to be paid your pension will continue to be kept in line with the cost of living and we will also contact you each April with details of any changes. You can see the Pension Increase which is confirmed in March each year.
You can find out more about the Rule of 85 and how it is applied.
You can find details on independent financial advice on Unbiased.co.uk, but make sure they understand the LGPS.