This section provides information on current pensions related news stories and is updated regularly with up-to-date news and developments within the Local Government Pension Scheme.
DWP launches midlife MOT website.
The DWP, working in partnership with Public Health England, the Money Advice Service (MAS) and the National Careers Service, has launched a mid-life MOT web portal to provide workers with advice on their pensions, working options and health. The website allows workers to check their state pension entitlement and provides links to financial advice services and guidance produced by TPAS, MAS and Pension Wise. In addition to the mid-life MOT website for individuals, DWP, in association with Business in the Community, has also produced a guide for smaller companies on how they can provide mid-life MOTs for their staff.
Early payment of deferred benefits for leavers before 1 April 1998
Last year we wrote to you to inform you of a change to scheme rules if you left with a deferred benefit before 1 April 1998. We informed you that the scheme rules had been changed to allow you take your benefit at age 55 (rather than 60), or the date your deferred benefit will be payable without a reduction for early payment – this is called your Normal Pension Age (NPA). Your NPA will be between age 60 and 65 depending on when you joined the scheme – you can find this information on your deferred benefit statement.
We are writing to you again to let you know that a further change to the scheme rules has been made which now allows you to take your benefit from age 55 (rather than only at age 55 or NPA) – your former employer does not need to provide consent for you take your benefits between the age of 55 and your NPA. You must take payment of your deferred benefit at NPA (if you have not taken payment before).
In addition, you no longer have to leave all local government employment to take payment of your deferred benefit. This means that if you are working in another local government employment (ie a different employment to the one you were in when you built up your deferred benefit) you can now choose to take payment of your deferred benefit and continue in your local government employment.
The above changes are backdated to 17 April 2018.
An application for early payment of your deferred benefit should be made to the Rhondda Cynon Taf Pensions Department.
Reductions to your benefits for early payment
If you choose to take your deferred benefits earlier than your Normal Pension Age (NPA) they will normally be reduced to take account of the fact that your pension will be paid for longer. How much your deferred benefits are reduced by will depend on how early you take them. The reduction is based on the length of time (in years and days) between the date you take them and the date your deferred benefit is payable without a reduction for early payment. If you are unsure when your NPA is you should check your deferred benefit statement.
The early retirement reduction factors are set by the government and can vary from time to time. The current factors can be found on the national LGPS member website www.lgpsmember.org/more/reductions.php
More information about taking your deferred is available on the national LGPS website www.lgpsmember.org/arl/already-left-when.php
Changes to Survivor Benefits for Same Sex Spouses and Civil Partners
A change to the scheme rules has been made to provide that survivor benefits payable to a same sex spouse or a civil partner are equal those paid to the widow of a male member.
Why has the change been made?
The change has been made as a result of a Supreme Court judgment (Walker v Innopsec) which found that Mr Walker’s male spouse was entitled to the same benefits that would have been paid if Mr Walker had left a widow in an opposite sex marriage.
Why does this apply to the LGPS?
The government believes that the implication of this judgment for all public service pensions schemes, including the LGPS, is that surviving civil partners or surviving same sex spouses should be provided with benefits equal to those that would be left to the widow of a male member.
When does the change take effect from?
The change is backdated to the date the civil partnerships and same sex marriages were introduced – this is 5 December 2005 for civil partnerships and 13 March 2014 for same sex marriages.
This means that where a member of the LGPS has died leaving a surviving civil partner or a same sex spouse, the survivor’s pension in payment will need to be reviewed and any additional amounts paid, where applicable. We are in the process of reviewing the impact of this change and will be contacting affected civil partners and same sex spouses in due course.
The change will automatically be taken into account in survivor benefits paid to civil partners and same sex spouses in the future.
Prudential Exit Charges - Update December 2018
We have been notified that Prudential are changing their policy on exit changes with effect from 3rd December 2018, from that date -
The existing 1% exit charge for members accessing their AVC within 3 years of their first contribution being received will end from 3rd December 2018. Exit charges will therefore be discontinued in all instances.
All Wales Investment Pool
The All Wales Investment Pool proposal was submitted to the Department for Communities and Local Government in July 2016. Subsequently, a delegation from the Wales LGPS funds met the Minister on 16 November 2016 where the proposal and progress of the pool to date was discussed.
The Minister formally approved the All Wales Investment Pool on 23 November 2016. Marcus Jones MP wrote:
"the Welsh funds have a long history of cooperation, and are working together successfully to develop the all Wales pool. I congratulate you on the exceptionally low fee for the passive equities portfolio of all Welsh funds which you have already secured. I was also glad to note your ambition to increase infrastructure investment. Given your strong partnership, and the special position of Wales...... I am therefore pleased to confirm that I am content for you to proceed as set out in your final proposal."
Officers and pension fund chairs are working towards establishing a Collective Investment Vehicle by the target date of 1 April 2018.
To see the most recent letter from the Minister click here.
Salary Sacrifice Schemes
Some employers are introducing a number of staff benefits which can affect your Local Government Pension Scheme Benefits- a Factsheet outlining the impact of these schemes can be viewed by clicking here.
Changes to the State Pension System
UPDATE: Please view our latest newsletter regarding the State Pension Changes by clicking here.
The State Pension system is changing from April 2016, please click here to go to the State Pension section of the website to read more.
You may also find the DWP guide to your state pension statement useful, it can be accessed by clicking here.
April 2015 Changes to LGPS Regulations
Amendments were made to LGPS 2013 Regulations with effect from April 2015. These are explained by clicking here to view the LGA factsheet.
Local Pension Board
In accordance with the Public Sector Pensions Act 2013 the Fund has established a Local Pension Board who will assist with the governance and compliance of the fund. Their first meeting was held on 15 July 2015. Further details of the Local Board and Minutes of Meetings can be found in the Governance section.
Freedom and Choice
New legislation came into force on 6th April 2015 which allows more flexibility around how defined contribution (DC) pension savings e.g. personal pensions, can be brought into payment once the minimum pension age of 55 has been reached. Previously most pension savers had to use the fund they have built up to buy an annuity to provide them with an income, however the new legislation allows members to take the whole of their fund as a lump sum (part tax free and part taxable). The Local Government Pension Scheme (LGPS) is a Defined Benefits scheme and therefore the new legislation does not apply to your pension benefits.
The Local Government Association have provided an employee guide to the LGPS which can be accessed here.
Members who have an AVC fund do have Defined Contributions pension savings however the LGPS does not allow the new legislation to be used so if a member did want to use the new legislation to access their pension rights they need to transfer their fund to another DC arrangement offering flexible benefits.
Due to the changes the Government has developed a free and impartial guidance service called Pension Wise - which can be accessed here. https://www.pensionwise.gov.uk/
The Money Advice Service has also produced a guide which can be accessed here https://www.moneyadviceservice.org.uk/en/articles/free-printed-guides#pensions
Provided certain criteria are met you maybe able to transfer your benefits out of the LGPS to a scheme to which the new legislation does apply however, in most cases, you must seek independent financial advice and will be asked by the scheme to provide evidence that you have done this. If there is a cost for advice then the member is liable for this cost.
If you are considering transferring out of the LGPS please make sure that you are dealing with a reputable company as the introduction of this legislation is expected to lead to an increase in the number of pension scams. Information on how to spot if you are at risk of being scammed please read the information on The Pensions Regulator Website http://www.thepensionsregulator.gov.uk/individuals/dangers-of-pension-scams.aspx.
All legitimate financial advisers must be authorised by the Financial Conduct Authority and they keep a register of all firms, individuals and other bodies that they regulate. You can check the Financial Services Register online
Are you thinking of transferring your benefits to another pension provider?
Some companies are approaching pension scheme members and claiming that they can help you cash in your pension early – this could be by text, adverts on the internet or by post. In most cases the earliest age that you can bring your pension into payment is 55, any earlier and you may be liable to high tax charges. These companies also tend to charge high fees for dealing with the transfer. Most of the time the people transferring are not made aware of these tax charges or fees.
Warning signs of possible fraudulent companies are:
- being approached about transferring your pension benefits by text or phone
- being told that you can access your pension benefits before age 55
- being told that your money will be held overseas
- being encouraged to get forms completed quickly or being asked to contact your existing pension provider to speed the transfer process up
- not being provided with documents when you ask for them
If you have been approached and have any doubts about who you are dealing with please contact the pensions helpdesk, www.thepensionsregulator.gov.uk or the Action Fraud Help-line on 0300 123 2040.
For more information click here.
The Government is introdued compulsory pension provision for UK employees starting with larger employers from October 2012. This compulsory pension provision is called Auto Enrolment (AE) and the rollout period is expected to take 4 years. For full details see the auto enrolment section.