Your Questions Answered

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  • Annual Benefit Statement Queries
  • Divorce and Dissolution
  • Joining and transferring in
  • Leaving options
  • My Pension Online FAQs
  • Taking retirement for members paying in
  • Paying Extra
  • Additional Pension Contributions (APCs)
  • Additional Voluntary Contributions (AVCs)
  • Tax Implications and advice
  • Pensions in payment
  • Annual Allowance FAQs
  • I want to...

Annual Benefit Statement Queries

  • Where can I see my statements?

    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.  

     

  • How can I change my address?

    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not received any communication from us, it could be that we don't hold a current address for you, or that we've an out of date address for you.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.

  • Can I take a lump sum at age 55 without taking the rest of my 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. 

Divorce and Dissolution

  • How do I get a pension value for divorce or dissolution purposes?

    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.

  • How much do I have to pay?

    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 are an active or deferred member with Lothian Pension Fund the fee is £113.00 plus VAT.
    • If you are in receipt of a pension from Lothian Pension Fund the fee is £303.00 plus VAT.

    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:

    • Part 11 of the Matrimonial Causes Act 1973 or Part 111 of the Matrimonial and Family Proceedings Act 1984 (England and Wales powers in relation to domestic and overseas divorce, etc.), or
    • Part 111 of the Matrimonial Causes (Northern Ireland) Order 1978, or Part 1V of the Matrimonial and Family Proceedings (Northern Ireland) Order 1989 (corresponding Northern Ireland powers), or
    • the Family Law (Scotland) Act 1985 or Part 1V of the Matrimonial and Family Proceedings Act 1984 (corresponding Scottish powers).
  • How do I get a form?

    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.

Joining and transferring in

  • What are the benefits of the LGPS?

    The LPGS gives you: 

    • Secure benefits – the Scheme provides you a future income, independent of share prices and stock market fluctuations.
    • At a low cost to you – with tax-efficient savings and options to pay extra.
    • Your employer pays in too – the scheme is provided by your employer who meets the balance of the cost of providing your benefits in the LGPS.
  • What kind of scheme is it?

    • Defined benefit occupational pension scheme where the benefits are worked out on the years you have paid into the pension scheme and the pay you have earned.
    • Eligible employees are automatically enrolled by their employer
    • Once you have met the 2 year membership period, you can be paid an annual pension for life with the option to take up to 25% as a tax free lump sum at retirement.
    • The LGPS is very secure because the benefits are set out in law.
  • Can I join?

    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 :

    • from the automatic enrolment date (unless your employer issues you with a postponement notice to delay bringing you into the scheme for up to a maximum of 3 months)
    • or if your contract is extended to be for 3 months or more
    • or you join by completing an application form.

    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.

Leaving options

  • What are my options if I leave with less than two years’ membership?

    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.

  • What are my options if I leave with more than two years' membership, hold other LGPS pension rights or transferred in membership?

    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.

  • Can I get a refund?

    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.

My Pension Online FAQs

  • How do I register using my email address?

    Step 1: Go to Online Account setup

    Step 2: Enter your details. You’ll need:

    • your National Insurance number – you’ll find this on your payslip
    • your date of birth - it needs to be entered in the following format 01/01/2000
    • your personal email address.

    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.

  • Register using a code in your newsletter or new start pack?

    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:

    • your National Insurance number – you’ll find this on your payslip
    • your date of birth - it needs to be entered in the following format 01/01/2000
    • your activation code from your letter or newsletter.

    Step 3: You will be taken to a registration screen to complete the final step by choosing a username, password and security respons

  • I need help setting up my account?

    Watch the video to guide you through the process of registering.

     

Taking retirement for members paying in

  • When can I take my pension?

    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 lateIf 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.

  • Can I take a lump sum at age 55 without taking the rest of my 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.

  • What are the types of retirement?

    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:

    • age 55 or over - your pension benefits will be paid on leaving without reduction for early payment. You can’t delay the payment until later.
    • under age 55 (or age 50 if in the Scheme on 5 April 2006) and you accept voluntary redundancy, your pension will be deferred. Payment can then be made any time after age 55.

    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 have no reasonable prospect of being capable of gainful employment before State Pension Age, ill-health benefits in the new scheme are based on your membership built up to the date of leaving plus all your prospective membership from leaving to State Pension Age. In other words, your pension will be based on the membership you would have had if you had stayed in the Scheme until your Normal Pension Age.
    • If you have a reasonable prospect of being capable of gainful employment before State Pension Age, ill-health benefits in the new scheme are based on your membership built up to leaving plus 25% of your prospective membership from leaving at Normal Pension Age. Gainful employment means paid employment for not less than 30 hours in each week for a period of not less than 12 months.

    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.

Paying Extra

  • Can I pay more towards my pension?

    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.

  • Does my employer contribute too?

    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.

Additional Pension Contributions (APCs)

  • How do I buy extra pension by paying Additional Pension Contributions (APCs)?

    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.

  • What happens to my APCs if I leave?

    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.

  • How much do APCs it cost?

    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

Additional Voluntary Contributions (AVCs)

  • What are Additional Voluntary Contributions (AVCs)?

    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.

    Your AVCs can be paid from age 55 separately or with your main LGPS benefits. Our AVCs providers invest your extra money in funds your chose.
    AVCs contributions are deducted directly from your pay before your tax is worked out, so, if you pay tax you receive tax relief automatically. The amount of tax relief you receive depends on whether you are a basic, higher or additional rate taxpayer. If you don’t pay tax, you won’t benefit from tax relief.  Read more on the tax benefits and implications for Annual Allowance.
  • How do I start paying extra through AVCs?

    To start an AVCs, follow the links for the two providers to find out more or click on the Prudential link to start your application.
     
    Prudential
    • Prudential website  - information about Prudential AVCs or  apply online
    • Telephone: To start an AVCs call 0800 032 6674. If you holder an AVCs and want to make changes to your investments call 0345 600 0343  
     
    Standard Life
    • Standard Life website - further information only Currently closed to new entrants
    • Standard Life: 0345 279 8831 or 0345 60 60 047
  • How much can I pay in?

    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.

Tax Implications and advice

  • What are the tax implications of paying extra?

    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.

  • If I pay tax, do I get tax relief?

    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.

Pensions in payment

  • How is my pension increased?

    Each year your pension is revalued in line with the cost of living as measured by the Consumer Price Index (CPI) in the previous September.
    The rate of pension increase for April 2022 is 3.1%. If you’ve retired within the last 12 months you’ll receive a part increase.
    You’ll only receive an increase each April if you:
    • are aged 55 or over, or
    • retired on ill health grounds, or
    • are receiving a widow's, widowers, surviving partner or child's pension.
    If you’re not in one of these sections shown above , your pension will be paid without increase until you reach age 55. At age 55 your pension is increase to the amount it would have been if you’d got the pension increases each year since your retirement.

    How your Pension Increase is applied

    • Pension increase at State Pension Age

    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).

    • Members with State Pension Age before 6 April 2016

    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.

    • Members with State Pension Age on or after 6 April 2016 and before 6 April 2021

    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

    • Members with State Pension Age on or after 6 April 2021

    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.

  • What happens if I move overseas?

    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 Western Union 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.

  • Live abroad and receive a letter about Western Union annual pension verification?

    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. The verification process involves visiting a Western Union Agent to collect the equivalent of £10 sent to you via the Western Union Agent network. This payment won’t be deducted from your pension.  Once you’ve received the cash payment, you don’t have to do anything further. Your pension payment will continue to be paid into your bank account. Due to the Covid 19 pandemic, there will be an alternative method of verification for 2020 which will be included in the correspondence sent to affected members.

Annual Allowance FAQs

  • What is the Annual Allowance?

    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.

  • What is carry forward and how does it work?

    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

  • Where can I view my Annual Allowance?

    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.

I want to...

  • Get an estimate

    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.

  • See my annual benefit statement

    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.  

     

  • See my payslip and P60

    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.

My Pension Online