Who can join?

If you have a contract of employment which is for 3 months or more you are eligible to join the Local Government Pension Scheme (LGPS), if you are under the age of 75 and are employed by a Local Authority or any other employer that has chosen to participate in the LGPS.  There are no restrictions on the minimum number of hours you must work to be eligible to join. 

All Local Government employees are* automatically entered into Scheme membership.

If your contract of employment is for less than 3 months or you are age 75 or over you cannot join the Scheme.  However if your contract is extended beyond 3 months you will join the Scheme automatically and you will have the option to pay pension contributions back to the date when you originally started.

*Please note that automatic entry or the option to back date contributions will not take place if you work for an employer which is classed as a designated or admitted body.

How much does it cost?

Your contribution band will be determined on your full time equivalent pay on 1 April each year.  The bands are shown below.

Annual Rate of Pay	Rate of Contributions
More than £75,000	7.5%
More than £40,000	7.2%
More than £30,000	6.8%
More than £18,000	6.5%
More than £14,000	5.9%
More than £12,000	5.8%
Up to £12,000	5.5%

This is the banding rate applicable at 1st April 2008, and these rates will go up in line with the Retail Price Index each April starting from 2009.

How much does it cost to join?

If you are a part-time employee then your contribution band will be worked out using the 'whole time' equivalent pay of a full time employee in the same post.

If you are a 'term-time' only employee then your contribution band will be calculated on your actual pay.

If you are a 'part-time, term-time' employee then the contribution band will be worked out using the actual pay as if you were a 'full-time, term-time' employee.

However manual staff use to pay a protected rate of 5% will have have their new contribution rates phased in gradually.  Equalisation of contribution rate will take place over three years until April 2011 as shown below:

Year 1	2008/09	5.25%
Year 2	2009/10	5.5%
Year 3	2010/11	6.5%*

*Or lower, in accordance with the corresponding pay band for the table shown previously.

Your employer pays the balance of the cost of providing your benefits after taking into account your contributions and investment returns.  Every three years an independent actuary calculates how much your employer must contribute to the Scheme and the amount will vary.

What happens to my pension contributions if I am off work?

Sick Leave

If you are absent due to sickness and you are receiving sick pay, your employer will deduct contributions from your pay so that you keep up your membership of the Scheme.  If you are off sick with reduced pay or without pay, your employer must treat this time as a period of membership in the Scheme with entitlement to membership benefits.

Unpaid Leave

If you take authorised unpaid leave of less than 31 days, you will have to pay your normal contributions on the pay you would have received.  If your leave is for 31 days or more, your must pay contributions for the first 30 days.  You can opt to pay contributions from the 31st day onwards to avoid a break in Scheme membership, provided you do so within 30 days of your return to work.

Industrial Dispute

If you are not paid for a period of unauthorised absence, this period will not count towards your pension.  If the unauthorised absence was because of an industrial dispute, you can count it as a period of membership if you pay 16% of the pay you would have received during the period of absence.  The amount you pay is set in the Regulations and is higher than normal because you have to pay the contributions that your employer normally pays.  You must write to your employer within 30 days of the end of the dispute if you want to pay these contributions.

Maternity Leave

If you take maternity leave you will normally be entitled to count the first 39 weeks of your maternity leave towards your Scheme membership.  This applies whether you are in receipt of Occupational or Statutory Maternity Pay.  If you are in receipt of Occupational or Statutory Maternity Pay, contributions will be taken from your pay.

If you continue your maternity leave for more than 39 weeks (unpaid) you can opt to pay contributions (as if you were receiving maternity pay) to cover the unpaid period.  You will have 30 days from the date you return to work to decide whether you want to pay the extra contributions.  If you do not pay the contributions the unpaid period will not count as membership of the scheme.

Parental Leave

You can, with your employer's agreement, take unpaid parental leave.  If you want this period to count as a period of membership you will have to pay contributions as for unpaid leave.

I am going on holiday and would like some extra spending money. Can I withdraw some of my pension contributions?

If you have been a Scheme member for less than 3 months and have not transferred pension in from elsewhere, you can leave the Scheme and receive a refund of contributions (less an adjustment for tax and national insurance).  You should think very carefully before doing this.

What can I do to boost my pension?

To increase the value of the benefits that you and your dependants receive, you may:

Make Additional Regular Contributions (ARCs)

You can pay ARCs to buy additional annual pension in proportions of £250 per annum, up to a maximum of £5,000 per annum.  The additional contributions attract tax relief and the cost depends on your age and the length of your payment period.  This period must not go beyond your normal retirement age.

If you would like further information on ARC's and wish to enquire how much this will cost for your own personal circumstances then please see the link below.

ARC Calculator

You can pay Additional Voluntary Contributions into one of the fund's nominated AVC providers (Standard Life or Clerical Medical).  Her Majesty's Revenue and Customs (HMRC) now allow you to take the AVC as a tax free lump sum subject to overall cash from the Scheme not exceeding 25% of your LGPS Lifetime Allowance.

The maximum contribution per year you can pay into a LGPS AVC Fund is 50% of your pensionable earnings.

The contributions are invested separately from the Scheme and you will have your own personal investment account.  There are restrictions as to when you can receive your investment.  You can opt to invest in an AVC of your choosing (known as a Free Standing AVC) or through one of the funds nominated AVC providers (Clerical Medical and Standard Life).

At retirement the accumulated fund in your in-house AVC account can be used to buy an annuity from an insurance company, bank or building society (but you can defer purchasing an annuity until the day before your 75th birthday at the latest) or to purchase membership in the LGPS (subject to certain eligibility criteria).

If you carry on contributing to the LGPS beyond age 65 you will not be able to purchase an annuity until:

You retire, or

You reach the eve of your 75th birthday

Concurrent  Pension

Contribute to a concurrent personal pension plan or stakeholder pension scheme. You may if you wish, be a member of the LGPS and make your own arrangements to pay into a personal pension plan or stakeholder pension scheme, whilst also contributing to the LGPS.  This is known as a concurrent pension.

Cheshire County Council as Administering Authority for the Scheme is not permitted to offer nominated concurrent pension arrangements as it does with AVCs.  Scheme members must make their own arrangements.  Your employer is not required to make any contributions to concurrent pensions.

Contributions to concurrent pensions are invested outside of the main scheme, generally in stock and shares.  There are restrictions on when you can drawdown your investment but you can use these funds to generate additional lump sum and annual pension benefit (subject to HMRC maximum limits).  The pension benefits derived from concurrent are in addition to your LGPS benefits.

What will I get when I retire?

Please use the attached link for an example on how your benefits are calculated http://www.cheshire.gov.uk/Pensions/Members+With+Pre-2008+Membership.htm

Can I give up some of my pension to increase my lump sum?

Yes, you will be able to exchange some of your pension for a bigger lump sum.  If you take this option, you will receive £12 extra lump sum for every £1 of your annual pension that you give up.  Certain tax limitations apply and you will be given further information on this prior to your retirement.

Ready Reckoner

The following table shows you how to estimate your annual pension.  The numbers across the top represent years of membership and the amounts down the side represent your final year's pensionable pay.

Pens Pay (£)	Pensions Ready Reckoner
	Years of Membership
	5	10	15	20	25	30	35	40
10000	833	1666	2500	3333	4166	5000	5833	6666
11000	916	1833	2750	3666	4583	5500	6416	7333
12000	1000	2000	3000	4000	5000	6000	7000	8000
13000	1083	2166	3250	4333	5416	6500	7583	8666
14000	1166	2333	3500	4666	5833	7000	8166	9333
15000	1250	2500	3750	5000	6250	7500	8750	10000
16000	1333	2666	4000	5333	6666	8000	9333	10666
17000	1416	2833	4250	5666	7083	8500	9916	11333
18000	1500	3000	4500	6000	7500	9000	10500	12000
19000	1583	3166	4750	6333	7916	9500	11083	12666
20000	1666	3333	5000	6666	8333	10000	11666	13333
25000	2083	4166	6250	8333	10416	12500	14583	16666
30000	2500	5000	7500	10000	12500	15000	17500	20000
35000	2916	5833	8750	11666	14583	17500	20416	23333
40000	3333	6666	10000	13333	16666	20000	23333	26666

When can I retire?

Normal retirement age in the LGPS is age 65 for both men and women.  You have the option to retire at age 60, but if you don’t have 25 year’s Scheme membership your benefits will be reduced.

Retirement before age 60 can only be with the consent of your employer and you must contact them for details of any early retirement schemes they may operate.

I am getting divorced and my ex wants part of my pension.  Is this right?

New legislation means that following divorce a proportion of your pension could be allocated to your ex-spouse / civil partner.  This can only be ordered by a court and will normally be discussed by your solicitor as part of the asset sharing discussions.
Any pension share awarded to a former spouse / civil partner will be retained in the LGPS until they reach age 65. It may be possible to transfer this to another pension scheme depending on whether that scheme will accept the transfer.

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