Notice to opt out of pension saving
Opting out of the Local Government Pension Scheme in England or Wales
Before You Start
- Please ensure you read through the information on the following pages thoroughly.
- Are you actually enrolled in the LGPS ?
- If you are a teacher for example you may be enrolled in a different scheme
- If you are a recent starter you may not be fully set-up in the system yet and will be unable to opt-out
- There are several things you need to know in order to opt-out of the LGPS:
- Your employer's name. This may sound obvious but you need to ensure you select the correct employer on the form.
- Your National Insurance number.
- Your assignment number for each post that you wish to opt-out of the LGPS. This can normally be found on your pay slip.
- When you are ready to continue please press the Next button below.
The Local Government Pension Scheme (LGPS) allows you to save while you are working in order to enjoy a pension once you retire. It is one of the best occupational pension schemes in the UK. What’s more, the LGPS is provided by your employer who meets a large part of the cost of providing the excellent range of secure benefits, so it’s an extremely valuable and important part of your employment package.
You might be thinking of opting out of the LGPS for a variety of reasons. Whatever the reason, it’s worth taking some time to look at the benefits you could be giving up. A brief summary of these is included in the “Declaration” section of this form.
Opting out won’t save you as much in take home pay as you may think. In most cases, you will pay more tax if you opt out of the LGPS. A basic rate tax payer paying pension contributions of £100 a month will pay £20 more tax if they opt out.
If you want to know more about the costs and benefits of being a member of the Local Government Pension Scheme please contact our office or visit our website, details overleaf.
Although changes to the LGPS are planned for 2014 (for details see the national LGPS web site at www.lgps.org.uk) please remember that the LGPS is, and will continue to be, one of the best occupational pension schemes in the UK.
Whatever your reasons for considering opting out of the scheme, we ask that you give this matter careful consideration before making a final decision. You may wish to take financial advice before making a decision to opt out. If you are opting out of the LGPS due to advice you have received you should ask for this advice in writing.
Your employer cannot ask you or force you to opt out. If you are asked or forced to opt out you can tell The Pensions Regulator - see www.thepensionsregulator.gov.uk.
Equally, no one can force you to remain a member of the scheme but, if you elect not to be a member, you should understand the implications both for you and your dependants.
- You can only sign and date this opt out form once you have commenced employment in the post from which you wish to opt out of membership of the LGPS. You cannot sign and date the form before then as it will be treated as an invalid opt out.
- The completed opt out form should be returned to your employer’s Human Resource department.
- If you have previous pension rights in the LGPS, either deferred or a frozen refund, or hold a concurrent local government employment on which you are a scheme member, or have been awarded a LGPS pension credit, or you are in receipt of a LGPS pension, payment of a refund of pension contributions will wipe out these benefits.
- If you have another job with another employer, that employer might also put you into pension saving, now or in the future. This opt out notice only opts you out of LGPS pension saving in relation to the employer and jobs you have named on this form. A separate opt out notice must be filled out and given to any other employer you work for if you wish to opt out of pension saving with that employer as well. You will need to obtain the opt out form for employment with that employer from the pension administrators for the scheme provided by that employer.
- If you opt out of the LGPS before completing three months membership you will be treated as never having been a member and will receive a refund of any contributions deducted from your pay minus any deductions for tax. If you opt out after three months you will be entitled to a deferred pension benefit in the LGPS which, unless you transfer the benefits to another pension scheme, would normally be payable from age 65 (or from age 60 at your choice).
- If you decide to opt out of membership of the LGPS and subsequently change your mind you will be able to rejoin the scheme provided you are under age 75 and you remain in an employment that qualifies you for membership of the scheme. You will need to write to your employer if you want to opt back into the scheme.
- If you stay opted out your employer will normally automatically put you back into the LGPS approximately three years from the date they have to comply with the automatic enrolment provisions of the Pensions Act 2008. You will, however, again be entitled at that time to opt out of membership of the scheme.
- If you change employer your new employer will normally put you back into pension saving straight away.