You can leave the LGPS at any time by giving your employer notice in writing. An election to opt-out becomes effective from the end of the payment period during which you gave notification, unless your notification specifies a date later than the date the notification was made. We would recommend that you discuss your options with the Pensions Helpline before opting-out of the LGPS.
Here are some points you should consider:
- The cost of being a member of the LGPS is less than you might think. If you pay tax you get tax relief on your contributions.
- Your scheme provides you with a secure future retirement income, independent of share prices and stock market fluctuations.
- You have the option to exchange part of your pension for some tax-free cash on retirement.
- If you opt out, you lose the benefit of the substantial contributions made by your employer.
The scheme provides an excellent package of benefits not just for you but for your family as well:
- Free life assurance from the moment you join the LGPS, there’s a lump sum of 3 years pay if you die in service.
- Pensions for your husband, wife, registered civil partner or co-habiting partner and for eligible children if you die in service or die after leaving with a pension entitlement.
- There’s also cover in the event of your early retirement on the grounds of permanent ill-health, redundancy or business efficiency.
If you opt-out within three months of joining:
You will be treated as not having been a member of the LGPS during that period, but will be treated as having opted-out of the LGPS. The contributions that you have paid will be refunded by your employer.
If you opt-out after being in the scheme for more than three months but less than two years - you will receive a refund of your contributions less tax which will be processed by the Pension Fund.
If you opt out after two years service you have the same options as detailed in the section on Leaving before retirement. However, please note that, in most cases, you will not be able to bring our pension benefits into payment until you leave employment.
Access an Opting Out Form. You should NOT complete an opting out declaration before the commencement of your employment.
Can I re-join the LGPS at a later date?
If you opt-out once, you can re-join the LGPS at any time.
You may wish to obtain independent financial advice before you make a decision to opt-out of the LGPS. Remember, independent financial advisers recommend that the value offered by Public Sector schemes, such as the LGPS, is hard to beat.