Rejoining the LGPS

This scenario applies when you have left an employment after 31 March 2014 with an entitlement to a deferred refund which is based on post 31 March 2014 membership (or on membership which is treated as post 31 March 2014 membership) only and you have now re-joined the LGPS.

You have re-joined the Local Government Pension Scheme (LGPS) and we note you already have a deferred refund account in the Scheme.

As you have now re-joined the LGPS you are no longer eligible to take a refund of the contributions in your deferred refund account and so the amount of pension in your deferred refund account will automatically be transferred and added into your new active pension account.

If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will need to indicate on the election form we send you which active pension account you wish your deferred refund account to be combined with.

This scenario applies when you have left an employment after 31 March 2014 with an entitlement to a deferred benefit in the LGPS which is based on post 31 March 2014 membership (or on membership which is treated as post 31 March 2014 membership) only, and who have rejoined the Local Government Pension Scheme (LGPS).

You have re-joined the LGPS and we note that you have previous deferred benefits in the LGPS.

If you were awarded those deferred benefits as a result of choosing, on or after 11 April 2015, to opt out of membership of the Scheme, those benefits will remain deferred in the Scheme and you cannot add them to the benefits you are accruing in the Scheme in your current job.

If, however, you were awarded those deferred benefits as a result of ceasing employment, or as a result of choosing, before 11 April 2015, to opt out of membership of the Scheme, you have a decision to make about what should happen to those deferred benefits and this is explained below.

Decision Required

Unless you tell us otherwise, the amount of pension in your deferred pension account will automatically be transferred and added into your new active pension account.

However, you can elect to keep you deferred benefit separate and, if you wish to do so, this must be done within 12 months of re-joining the scheme and while you are still paying into the scheme.

If you make an election to keep your benefits separate you cannot change your decision. If you do not make a decision within 12 months of re-joining the scheme your deferred benefit will automatically be combined with your new active pension account. 

Please note that your employer can extend the 12 month window within which you can elect to keep your benefits separate. However, this is an employer discretion and you would need to speak to your current employer if you wish to seek such an extension.

What do I need to consider before making my decision?

At the moment, you have a separate deferred benefit for your previous employment in the LGPS. If you take no action this will be automatically transferred into your new active pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefits from my previous employment be worked out?
• When will my benefits be payable?
• Are there other key areas to consider?

How will the benefits from my previous employment be worked out?

Your benefits from your previous employment will be worked out in the same way if they are combined or if they are kept separate. 

If you have re-joined the LGPS having had a continuous break in active membership of a public service pension scheme of less than 5 years your deferred pension account will be recalculated by the HM Treasury Revaluation Orders.

If you have re-joined the LGPS having had a continuous break in active membership of a public service pension scheme of more than 5 years your deferred pension account will be revalued by Pension Increase (Review) Orders.

When will my benefits be payable?

The Normal Pension Age applicable to your benefits in the scheme is the same regardless of whether or not you combine your benefits or keep them separate. Your Normal Pension Age is linked to your State Pension Age.

Are there any other key areas to consider?

Death in Service lump sum

As a member of the LGPS if you die in service a lump sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension, and die before it is paid, a lump sum equal to 5 times the deferred pension is paid. However, only one amount for lump sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account, only the greater of the lump sum life cover for your deferred benefit or for your active pension account would be payable.

Paying extra contributions

Have you paid extra contributions towards buying additional pension? This would include Additional Voluntary Contributions (AVCs) and Additional Pension Contributions (APCs). Please read the information paying extra contributions in the Re-joiner Glossary page to find out what your choices in respect of these are.

Transferring the value of your deferred benefit to another pension scheme

Please note that even if you choose not to combine your benefits you will not be able to transfer the value of your deferred benefits to another pension scheme whilst you are contributing to the LGPS or if you have less than one year to go before reaching your Normal Pension Age.

What next?

Please complete the attached option form to tell us whether or not you wish to combine your benefits**. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible. If we do not receive your completed form within 12 months of the date you re-joined the scheme, your previous deferred benefit will automatically be transferred to your new active pension account at the end of the 12 month period. 

**Please note that if you have more than one ongoing employment in which you are continuing to contribute to the LGPS, please indicate which active pension account you wish your deferred benefit to be combined with.

This scenario applies when you have left employment after 31 March 2014 with an entitlement to a deferred refund in the LGPS, and you were in the scheme on both 31 March and 1 April 2014, and re-joined the LGPS again without having a continuous break in active membership of a public service pension scheme of more than five years since ceasing to be an active member of the LGPS in the employment to which the deferred refund relates.

You have re-joined the Local Government Pension Scheme (LGPS) and we note you have a deferred refund account in the Scheme.

As you have now re-joined the LGPS you are no longer eligible to take a refund of the contributions in your deferred refund account and so the amount of pension you have built up after 31 March 2014 in your deferred refund account will automatically be transferred and added into your new active pension account.

If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will need to indicate on the election form we send you which active pension account you wish your deferred refund account to be combined with.

The membership you built up before 1 April 2014 in the final salary scheme will continue to count as final salary membership* and will automatically be linked to your new active pension account.

When you leave your new employment in the future your final pay in that employment will be used to work out your final salary benefits for your pre 1 April 2014 membership. You will also have pension benefits for all the membership you have built up in the career average scheme (i.e. for membership after 31 March 2014). See Working out your benefits in the LGPS in the Re-joiner Glossary page for information on how these benefits are calculated.

For the pension you have built up in the final salary scheme (before 1 April 2014) your Normal Pension Age would be protected at age 65. For the pension you have built up in the career average scheme (on or after 1 April 2014) your Normal Pension Age is now linked to your State Pension Age (minimum age 65).

If you have rule of 85 protections these protections will continue to apply to you. See the Re-joiner Glossary page for more information on the rule of 85. 

*If your membership in the final salary scheme built-up before 1 April 2014 was variable time and your new employment is not variable time then, to ensure you get the appropriate level of membership for that period, your pre 1 April 2014 membership from the former employment is adjusted, using the following formula:

 Period of membership x Your annual rate of pay in the variable time employment  / Your annual rate of pay in the new employment = adjusted period of membership.

This scenario applies when you left an employment after 31 March 2014 with an entitlement to a deferred benefit in the LGPS, were in the scheme on both the 31 March and 1 April 2014, and re-joined the LGPS again without having had a continuous break in active membership of a public service pension scheme of more than five years since ceasing to be an active member of the LGPS in the employment to which the deferred benefit relates.

You have re-joined the Local Government Pension Scheme (LGPS) and we note that you have previous deferred benefits in the LGPS. You therefore have a decision to make about what should happen to those deferred benefits.

Unless you tell us otherwise, the amount of pension you have built up after 31 March 2014 in your deferred pension account will automatically be transferred and added to your new active pension account and the membership you built up before 1 April 2014 in the final salary scheme will continue to count as final salary membership automatically linked to your new active pension account.

Decision Required

You can elect to keep you deferred benefits separate and, if you wish to do so, this must be done within 12 months of re-joining the scheme and while you are still paying into the scheme.

If you make an election to keep your benefits separate you cannot change your decision. If you do not make a decision within the 12 month period of re-joining the scheme then your deferred benefit will automatically be combined with your new active pension account.

Please note that your employer can extend the 12 month window within which you can elect to keep your benefits separate. However, this is an employer discretion and you would need to speak to your current employer if you wish to seek such an extension.

What do I need to consider before making my decision?

At the moment you have a separate deferred benefit for your previous employment in the LGPS. If you take no action this will be automatically combined with your new active pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefits from my previous employment be worked out?
• When will my benefits be payable?
• Are there other key areas to consider?

How will the benefits from my previous employment be worked out?

You have built up benefits in the both the final salary scheme (up to 31 March 2014) and the career average scheme (from 1 April 2014). See Working out your benefits in the LGPS in the Re-joiner Glossary page for information on how these benefits are calculated.

If your previous deferred benefit is combined with your new active pension account then:

• the membership you built up before 1 April 2014 in the final salary scheme will continue to count as final salary membership*. This membership will be linked to your active pension account and when you leave your new employment in the future your final pay in that employment will be used to work out your final salary benefits for your pre 1 April 2014 membership;

• the amount of pension you have built up in the career average scheme from 1 April 2014 would transfer over to your new active pension account.

If you elect to keep separate deferred benefits then these will increase each year in line with inflation, as currently measured by the rise in the Consumer Prices Index (see the Re-joiner Glossary page page for more information).

* If your membership in the final salary scheme built-up before 1 April 2014 was variable time and your ongoing employment is not variable time then, to ensure you get the appropriate level of membership for that period, your pre 1 April 2014 membership from the employment that has ceased is adjusted, using the following formula:

Period of membership x Your annual rate of pay in the variable time employment / Your annual rate of pay in the ongoing employment = adjusted period of membership.

When will my benefits be payable?

For the pension you have built up in the final salary scheme (before 1 April 2014) your Normal Pension Age would be protected at age 65. For the pension you have built up in the career average scheme (on or after 1 April 2014) your Normal Pension Age is now linked to your State Pension Age. For more information on Normal Pension Age see the Re-joiner Glossary page. 

Are there any other key areas to consider?

Death in Service lump sum

As a member of the LGPS if you die in service a lump sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension and die before it is paid, a lump sum equal to five times the deferred pension is paid. However, only one amount for lump sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account, only the greater of the lump sum life cover for your deferred benefit or for your active pension account would be payable.

Annual Allowance Potential Tax Implications

You are advised to be aware of any potential tax implications around combining your deferred benefits with your new active pension account. In the unlikely event that a tax charge would apply your Pension Fund would make you aware of the implications. Please read the Re-joiner Glossary page for more information on annual allowance. 

Paying extra contributions

Have you paid extra contributions towards buying additional pension or membership? These would include Additional Voluntary Contributions (AVCs), Added Years, Additional Regular Contributions (ARCs) or Additional Pension Contributions (APCs). Please read the Re-joiner Glossary page and the entry on paying extra contributions to find out what your choices in respect of these are.

What next?

We would have sent you an option form.  Please complete this form to tell us whether or not you wish to combine your benefits**. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible.

If we do not receive your completed form within 12 months of the date you re-joined the scheme, your previous deferred benefit will automatically be transferred to your new active pension account at the end of the 12 month period.

**If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will also, if you decide to combine your benefits, need to decide which active pension account you wish your deferred benefit to be combined with.

This scenario applies when you left an employment after 31 March 2014 with an entitlement to a deferred benefit in the LGPS, were in the scheme on both the 31 March and 1 April 2014 and who re-joined the LGPS again having had a continuous break in active member of a public service pension scheme of more than 5 years since ceasing to be an active member of the LGPS in the employment to which the deferred benefit relates.

You have re-joined the Local Government Pension Scheme (LGPS). We note that you have previous deferred benefits in the LGPS.

If you were awarded those deferred benefits as a result of choosing, on or after 11 April 2015, to opt out of membership of the Scheme, those benefits will remain deferred in the Scheme and you cannot add them to the benefits you are accruing in the Scheme in your current job.

If, however, you were awarded those deferred benefits as a result of ceasing employment, or as a result of choosing, before 11 April 2015, to opt out of membership of the Scheme, you have a decision to make about what should happen to those deferred benefits and this is explained below.

Decision Required

Unless you tell us otherwise, your deferred benefit will automatically be combined with your new active pension account.

You can elect to keep you deferred benefits separate and, if you wish to do so, this must be done within 12 months of re-joining the scheme and while you are still paying into the scheme.

If you make an election to keep your benefits separate you cannot change your decision. If you do not make a decision within the 12 month period of re-joining the scheme then your deferred benefit will automatically be combined with your new active pension account.

Please note that your employer can extend the 12 month window within which you can elect to keep your benefits separate. However, this is an employer discretion and you would need to speak to your current employer if you wish to seek such an extension.

What do I need to consider before making my decision?

At the moment you have separate deferred benefits for your previous employment in the LGPS. If you take no action these will be automatically combined with your new pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefits from my previous employment be worked out?
• When will my benefits be payable?
• Are there other key areas to consider?

How will the benefits from my previous employment be worked out?

You have built up benefits in the both the final salary scheme (up to 31 March 2014) and the career average scheme (from 1 April 2014). See Working out your benefits in the LGPS the glossary for information on how these benefits are calculated.

If your previous deferred benefit is combined with your new active pension account then:

1. the membership you built up before 1 April 2014 in the final salary scheme will no longer count as final salary membership. Instead the value of benefits built up before 1 April 2014 in the final salary scheme will buy an amount of earned pension in the career average scheme which will be added into your new active pension account.
2. the amount of pension you have built up in the career average scheme from 1 April 2014 would transfer over to your new active pension account.

If you elect to retain separate benefits then your deferred benefit will remain as previously worked out i.e.:

• that part of your deferred benefit which was based on your pre 1 April 2014 final salary membership of the LGPS will have been worked out on your whole-time equivalent final pay in the employment that gave rise to the deferred benefit, and
• you will have an amount of pension built up in the career average scheme after 1 April 2014 and the date you left the LGPS in the employment that gave rise to the deferred benefit.

If you elect to keep separate deferred benefits then your deferred benefits will increase each year in line with inflation, as currently measured by the rise in the Consumer Prices Index (see the glossary for more information).

When will my benefits be payable?

If your previous deferred benefit is combined with your new active pension account then all your combined benefits will be payable at the Normal Pension Age for the scheme from 1 April 2014. Therefore, your Normal Pension Age would be the same as your State Pension Age (minimum age 65). For more information on Normal Pension Age see the glossary.

Rule of 85 protections will continue for some members in relation to some of their membership, see the information below on rule of 85 protections.

If you elect to keep your deferred benefits separate then the date these are payable would remain the same with your Normal Pension Age being age 65 for benefits built up to 31 March 2014 and for benefits built up from 1 April 2014 your Normal Pension Age is linked to your State Pension Age (minimum age 65). For more information on Normal Pension Age see the glossary.

Rule of 85

If your previous benefits are combined with your new employment, the value of those benefits buys an amount of earned pension in the career average scheme and any rule of 85 protection you previously had will be reflected in the amount of earned pension bought. Therefore, to reflect the fact that those earlier benefits would now be payable unreduced at your Normal Pension Age under the career average scheme (i.e. the same as your State Pension Age, with a minimum age of 65) the amount of earned pension bought by the transferred benefits would be higher because you previously had rule of 85 protection. In addition, if your previous benefits are combined with your new employment, there are further protections for rule of 85 if you are close to retirement including.

• If you will be age 60 or over by 31 March 2016 and re-join the scheme before 1 April 2016 then the rule of 85 will continue to apply to the membership you build up between re-joining the scheme and 31 March 2016 (although the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85). However, the rule of 85 will not continue to apply to the amount of earned pension bought when you combined your deferred pension (but the amount of earned pension bought will include an amount to compensate for the loss of rule of 85 protection on that pension).

• If you will be age 60 between 1 April 2016 and 31 March 2020 and re-join the scheme before 1 April 2020 then the rule of 85 will continue to apply to the membership you build up between re-joining the scheme and 31 March 2020 (although the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85). However, therule of 85 will not continue to apply to the amount of earned pension bought when you combined your deferred pension (but the amount of earned pension bought will include an amount to compensate for the loss of rule of 85 protection on that pension).

If you decide not to combine your previous deferred benefits with your new active pension account and you have rule of 85 protections then these would continue to apply, but to your deferred benefits only.

Death in Service lump sum

As a member of the LGPS if you die in service a lump sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension and die before it is paid, a lump sum equal to 5 times the deferred pension is paid. However, only one amount for lump sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account only the greater of the lump sum life cover for your deferred benefit or for your active pension account would be payable.

Annual Allowance Potential Tax Implications

You are advised to be aware of any potential tax implications around combining your deferred benefits with your new active pension account. In the unlikely event that a tax charge would apply your Pension Fund would make you aware of the implications. Please read the glossary for more information on annual allowance.

Paying extra contributions

Have you paid extra contributions towards buying additional pension or membership? These would include Additional Voluntary Contributions (AVCs), Added Years, Additional Regular Contributions (ARCs) or Additional Pension Contributions (APCs). Please read paying extra contributions in the glossary to find out what your choices in respect of these are.

Transferring the value of your deferred benefit to another pension scheme

Please note that even if you choose not to combine your benefits you will not be able to transfer the value of your deferred benefits to another pension scheme whilst you are contributing to the LGPS or if you have less than one year to go before reaching your Normal Pension Age.

What next?

We would have sent you an option form. Please complete this form to tell us whether or not you wish to combine your benefits**. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible.

If we do not receive your completed form within 12 months of the date you re-joined the scheme, your previous deferred benefit will automatically be transferred to your new active pension account at the end of the 12-month period.

**If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will also, if you decide to combine your benefits, need to decide which active pension account you wish your deferred benefit to be combined with.

This scenario applies when you left an employment before 1 April 2014 with an entitlement to a deferred refund in the LGPS, and re-joined the LGPS.

As you have now re-joined the LGPS you are no longer eligible to take the refund of contributions and so the benefits in respect of the deferred refund will automatically be transferred to, and buy a amount of earned pension, in your new active pension account.

If you have more than one active pension action (because you have more than one current employment in which you are contributing to the LGPS) you will need to decide which active pension account you wish the benefits from your deferred refund to be combined with.

The Normal Pension Age for the earned pension transferred over to your new active pension account will be the same as your State Pension Age.  See the Re-joiner Glossary page for more information about Normal Pension Age.

This scenario applies when you left an employment before 1 April 2014 with an entitlement to a deferred benefit in the LGPS, and re-joined the LGPS without having a continuous break in active membership of a public service pension scheme of more than five years since ceasing to be an active member of the LGPS in the employment to which the deferred benefit relates.

You have three options available to you and you need to consider which one you wish to elect for.

What do I need to consider before making my decision?

At the moment you have a separate deferred benefit for your previous employment in the LGPS. If you take no action then your deferred benefit will remain separate from your new active pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefit from my previous employment be worked out?
• When will my benefit be payable?
• Are there other key areas to consider?

Option One: 

You can elect to combine your pre 1 April 2014 final salary membership with your new active pension account so that it continues to count as final salary scheme membership.

To do this you need to elect within 12 months of re-joining the scheme to be treated as if you were an active member of the scheme on both the 31 March and 1 April 2014. If you make this election your pre 1 April 2014 membership will be attached to your new pension account and the benefits in respect of that membership will continue to count as a final salary membership. This means that, when you cease membership of the LGPS at some point in the future in your new employment, the benefits in respect of your pre 1 April 2014 membership would be calculated using your whole-time equivalent final pay in that employment (based on the definition of final pay in the final salary scheme).

You will need to consider this point carefully when deciding whether or not to elect for option one, particularly if your whole-time equivalent pay in the new employment is less than the whole-time equivalent final pay on which your deferred benefit was awarded (as increased in line with the cost of living).

If you decide not to combine your previous benefits with your new active pension account, your deferred benefit (which will have been calculated on your whole-time equivalent final pay in the employment that gave rise to the deferred benefits) will continue to be increased in line with inflation.

There are, also other matters that you will need to consider including:

When will my benefits be payable?

If you choose option one then the date your pre 1 April 2014 benefits are payable from would be age 65 i.e. your Normal Pension Age for those benefits would be age 65. For the benefits you build up in the career average scheme (after 31 March 2014) your Normal Pension Age is linked to your State Pension Age (with a minimum age 65). If your deferred benefits are combined with your new active pension account and any final salary benefits you have previously built up continue to be counted as final salary benefits then they will continue to have a Normal Pension Age of 65.

For more information on Normal Pension Agee see the Re-joiner Glossary.

Rule of 85

If your previous benefits are combined with your new employment and you have rule of 85 protections these protections will transfer to your new active pension account. However, the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85.

If you decide not to combine your previous benefits with your new active pension account and you have rule of 85 protections then these continue to apply to your deferred benefits only.

For more information on the rule of 85 see the Re-joiner Glossary.

Please note: If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will need to decide which active pension account  you wish the benefits from your deferred refund to be combined with.

If your membership in the final salary scheme was variable time and your ongoing employment is not variable time then, to ensure you get the appropriate level of membership for that period, your pre 1 April 2014 membership that has ceased will be adjusted using the following formula:

Period of membership x your annual rate of pay in the variable time employment / your annual rate of pay in the ongoing employment = adjusted period of membership.

If you choose option 1 then you must make that election within 12 months of rejoining the scheme and whilst you are still paying into the scheme.

Option Two

You can elect to combine your deferred benefit with your new pension account to buy an amount of earned pension in the career average scheme which will buy an amount of earned pension in the career average scheme which will be added into your new active pension account.

If you choose option two your previous deferred benefit will be combined with your new active pension account and the membership you built up before 1 April 2014 in the final salary scheme will no longer count as final salary membership. Instead the value of benefits built up before 1 April 2014 in the final salary scheme will buy an amount of earned pension in the career average scheme which will be added into your new active pension account.

When will my benefits be payable?

If you choose option two then your combined benefits will be payable at your Normal Pension Age under the career average scheme which will be the same as your State Pension Age (with a minimum age 65). For more information on Normal Pension Age see the Re-joiner Glossary.

Rule of 85

If you choose option two, any rule of 85 protection you previously had will be reflected in the amount of earned pension bought. Therefore, to reflect the fact that those earlier benefits would now be payable unreduced at your Normal Pension Age under the career average scheme (i.e. the same as your State Pension Age, with a minimum age of 65) the amount of earned pension bought by the transferred benefits would be higher because you previously had rule of 85 protection. 

In addition, if your previous benefits are combined with your new employment under option two,  there are further protections for rule of 85 if you are close to retirement including:

• If you will be age 60 or over by 31 March 2016 and re-join the scheme before 1 April 2016 then the rule of 85 will continue to apply to the membership you build up between re-joining the scheme and 31 March 2016 (although the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85). However, therule of 85 will not continue to apply to the amount of earned pension bought when you combined your deferred pension (but the amount of earned pension bought will include an amount to compensate for the loss of rule of 85 protection on that pension).

• If you will be age 60 between 1 April 2016 and 31 March 2020 and re-join the scheme before 1 April 2020 then the rule of 85 will continue to apply to the membership you build up between re-joining the scheme and 31 March 2020 (although the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85). However, therule of 85 will not continue to apply to the amount of earned pension bought when you combined your deferred pension (but the amount of earned pension bought will include an amount to compensate for the loss of rule of 85 protection on that pension). 

If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will need to decide which active pension account  you wish the benefits from your deferred refund to be combined with.

If your membership in the final salary scheme was variable time and your ongoing employment is not variable time then, to ensure you get the appropriate level of membership for that period, your pre 1 April 2014 membership that has ceased will be adjusted using the following formula:

Period of membership x your annual rate of pay in the variable time employment / your annual rate of pay in the ongoing employment = adjusted period of membership.

Option Three

You can elect to keep your deferred benefit separate from your new active pension account.

If you decide not to combine your deferred benefits or you do not make an election within 12 months of re-joining the scheme then your deferred benefits will remain separate.

How will the benefits from my previous employment be worked out?

If you choose option three your deferred benefit will remain as previously calculated and held with your previous Pension Fund (if not the West Midlands Pension Fund). See Working out your benefits in the LGPS the Re-joiner Glossary for information on how these benefits are calculated.

The deferred benefit will increase each year in line with inflation, as currently measured by the rise in the Consumer Prices Index.

When will my deferred benefits be payable?

The date your deferred benefits are payable would remain the same, with your Normal Pension Age being age 65 if the deferred benefits relate to a period of membership that ended after 30 September 2006, or a date somewhere between 60 and 65 if the deferred benefits relate to a period of membership that ended before 1 October 2006. For more information on Normal Pension Age see the Re-joiner Glossary.

Rule of 85

If you chose option three (i.e. decide not to combine your previous benefits with your new active pension account) and you have rule of 85 protections, then these continue to apply to your deferred benefits only.

For more information on the rule of 85 see the Re-joiner Glossary.

Death in Service lump sum

As a member of the LGPS if you die in service a lump sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension and die before it is paid, a lump sum equal to five times the deferred pension is paid if the deferred benefits relate to a period of membership that ended after 31 March 2008, or a lump sum equal to three times the deferred pension is paid if the deferred benefits relate to a period of membership that ended before 1 April 2008. However, only one amount for lump sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account only the greater of the lump sum life cover for your deferred benefit or for your active pension account would be payable.

Annual Allowance Potential Tax Implications

You are advised to be aware of any potential tax implications around combining your deferred benefits under option one and option two with your new active pension account. In the unlikely event that a tax charge would apply the West Midlands Pension Fund would make you aware of the implications. Please see the Re-joiner Glossary for more information on annual allowance. 

Paying extra contributions

Have you paid extra contributions towards buying additional pension or membership? These would include Additional Voluntary Contributions (AVCs), Added Years or Additional Regular Contributions (ARCs). Please read paying extra contributions in the Re-joiner Glossary to find out what your choices in respect of these are.

Transferring the value of your deferred benefit to another pension scheme

Please note that even if you choose not to combine your benefits you will not be able to transfer the value of your deferred benefits to another pension scheme whilst you are contributing to the LGPS or if you have less than one year to go before reaching your Normal Pension Age. 

What next?

Please complete the attached option form we've provided you to tell us whether or not you wish to combine your benefits and, if you do, whether you wish to elect for option one or option two. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible. If we do not receive your completed form within 12 months of the date you re-joined the scheme, your previous deferred benefit will remain separate and/or held in your previous Pension Fund (where applicable).

Once you have chosen which option you wish to proceed with you cannot change your decision.  If you do not elect for option one or option two then your deferred benefit will remain separate from your new active pension account.

This scenario applies when you left an employment before 1 April 2014 with an entitlement to a deferred benefit in the LGPS, and re-joined the LGPS having had a continuous break in active membership of a public service pension scheme of more than five years since ceasing to be an active member of the LGPS in the employment to which the deferred benefit relates.

You have two options available to you and you need to consider which one you wish to elect for.

What do I need to consider before making my decision?

At the moment you have a separate deferred benefit for your previous employment in the LGPS. If you take no action then your deferred benefit will remain separate from your new active pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefit from my previous employment be worked out?
• When will my benefit be payable?
• Are there other key areas to consider?

Option One

You can elect to combine your deferred benefit with your new pension account to buy an amount of earned pension in the career average scheme which will be added into your new active pension account.

If you choose this option your previous deferred benefit will be combined with your new active pension account and the membership you built up before 1 April 2014 in the final salary scheme will no longer count as final salary membership. Instead the value of benefits built up before 1 April 2014 in the final salary scheme will buy an amount of earned pension in the career average scheme which will be added into your new active pension account.

When will my benefits be payable?

If you choose this option then your combined benefits will be payable at your Normal Pension Age under the career average scheme which will be the same as your State Pension Age (with a minimum age 65). For more information on Normal Pension Age see the Re-joiner Glossary.

Rule of 85

If you choose option one, any rule of 85 protection you previously had will be reflected in the amount of earned pension bought. Therefore, to reflect the fact that those earlier benefits would now be payable unreduced at your Normal Pension Age under the career average scheme (i.e. the same as your State Pension Age, with a minimum age of 65) the amount or earned pension bought by the transferred benefits would be higher because you previously had rule of 85 protection.

In addition, if your previous benefits are combined with your new employment under option one, there are further protections for rule of 85 if you are close to retirement including:

• If you will be age 60 or over by 31 March 2016 and re-join the scheme before 1 April 2016 then the rule of 85 will continue to apply to the membership you build up between re-joining the scheme and 31 March 2016 (although the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85). However, the rule of 85 will not continue to apply to the amount of earned pension bought when you combined your deferred pension (but the amount of earned pension bought will include an amount to compensate for the loss of rule of 85 protection on that pension).

• If you will be age 60 between 1 April 2016 and 31 March 2020 and re-join the scheme before 1 April 2020 then the rule of 85 will continue to apply to the membership you build up between re-joining the scheme and 31 March 2020 (although the date you meet the rule of 85 may move closer to your Normal Pension Age because the break in service between your previous period of membership and your new period of membership will not count towards the rule of 85). However, the rule of 85 will not continue to apply to the amount of earned pension bought when you combined your deferred pension (but the amount of earned pension bought will include an amount to compensate for the loss of rule of 85 protection on that pension). 

Please note: If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will need to decide which active pension account  you wish the benefits from your deferred refund to be combined with.

If you choose option one then you must make that election within 12 months of rejoining the scheme and whilst you are still paying into the scheme.

Option Two

You can elect to keep your deferred benefit separate from your new active pension account.

If you decide not to combine your deferred benefits or you do not make an election within 12 months of re-joining the scheme then your deferred benefits will remain separate.

How will the benefits from my previous employment be worked out?

If you choose option two your deferred benefit will remain as previously calculated and held with your previous Pension Fund (if not the West Midlands Pension Fund). See Working out your benefits in the LGPS the Re-joiner Glossary for information on how these benefits are calculated.

The deferred benefit will increase each year in line with inflation, as currently measured by the rise in the Consumer Prices Index.

When will my deferred benefits be payable?

The date your deferred benefits are payable would remain the same, with your Normal Pension Age being age 65 if the deferred benefits relate to a period of membership that ended after 30 September 2006, or a date somewhere between 60 and 65 if the deferred benefits relate to a period of membership that ended before 1 October 2006. For more information on Normal Pension Age see the Re-joiner Glossary.

Rule of 85

If you chose option two (i.e. decide not to combine your previous benefits with your new active pension account) and you have rule of 85 protections, then these continue to apply to your deferred benefits only.

For more information on the rule of 85 see the Re-joiner Glossary.

Death in Service lump sum

As a member of the LGPS if you die in service a lump sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension and die before it is paid, a lump sum equal to five times the deferred pension is paid if the deferred benefits relate to a period of membership that ended after 31 March 2008, or a lump sum equal to three times the deferred pension is paid if the deferred benefits relate to a period of membership that ended before 1 April 2008. However, only one amount for lump sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account only the greater of the lump sum life cover for your deferred benefit or for your active pension account would be payable.

Annual Allowance Potential Tax Implications

You are advised to be aware of any potential tax implications around combining your deferred benefits under option one and option two with your new active pension account. In the unlikely event that a tax charge would apply the West Midlands Pension Fund would make you aware of the implications. Please see the Re-joiner Glossary for more information on annual allowance. 

Paying extra contributions

Have you paid extra contributions towards buying additional pension or membership? These would include Additional Voluntary Contributions (AVCs), Added Years or Additional Regular Contributions (ARCs). Please read paying extra contributions in the Re-joiner Glossary to find out what your choices in respect of these are.

Transferring the value of your deferred benefit to another pension scheme

Please note that even if you choose not to combine your benefits you will not be able to transfer the value of your deferred benefits to another pension scheme whilst you are contributing to the LGPS or if you have less than one year to go before reaching your Normal Pension Age.

What next?

Please complete the attached option form we've provided you to tell us whether or not you wish to combine your benefits and, if you do, whether you wish to elect for option one. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible. If we do not receive your completed form within 12 months of the date you re-joined the scheme, your previous deferred benefit will remain separate and/or held in your previous Pension Fund (where applicable).

Once you have chosen which option you wish to proceed with you cannot change your decision.  If you do not elect for option one then your deferred benefit will remain separate from your new active pension account.

This scenario applies when you have left an employment after 31 March 2014 with an entitlement to a deferred refund which is based on post-31 March 2014 membership (or on membership which is treated as post-31 March 2014 membership) only and you continue to be an active member in an ongoing employment.

As you are continuing in the LGPS in your other employment(s), you are not eligible to take a refund of the contributions in your deferred refund account, and so the amount of pension in your deferred refund account will automatically be transferred and added into your ongoing active account.

If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS), you will need to indicate on the election form we send you which active pension account you wish your deferred refund account to be combined with.

This scenario applies when you have left an employment after 31 March 2014 with an entitlement to a deferred benefit in the LGPS which is based on post-31 March 2014 membership (or on membership which is treated as post-31 March 2014 membership) only, and continue to be an active member in an ongoing employment.

As you are continuing in the LGPS in your other employment(s), you need to decide what should happen to the deferred benefits you have built up in respect of the ceased employment.

Decision Required

Unless you tell us otherwise, the amount of pension in your deferred pension account will automatically be transferred and added into your new active pension account.

However, you can elect to keep you deferred benefit separate and, if you wish to do so, this must be done within 12 months from the date you left the scheme in the employment which gave rise to the deferred benefit, and while you are still paying into the scheme.

If you make an election to keep your benefits separate you cannot change your decision. If you do not make a decision within 12 months of the date you left the scheme, your deferred benefit will automatically be combined with your ongoing active pension account. 

Please note that your employer can extend the 12-month window within which you can elect to keep your benefits separate. However, this is an employer discretion and you would need to speak to your current employer if you wish to seek such an extension.

What do I need to consider before making my decision?

At the moment, you have a separate deferred benefit for the employment which has ceased. If you take no action this will be automatically transferred into your ongoing active pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefits from my employment which has ceased be worked out?
• When will my benefits be payable?
• Are there other key areas to consider?

How will the benefits from my previous employment be worked out?

Your benefits from your employment which has ceased will be worked out in the same way if they are combined or if they are kept separate. 

When will my benefits be payable?

The normal pension age applicable to your benefits in the scheme is the same regardless of whether or not you combine your benefits or keep them separate. Your normal pension age is linked to your state pension age. For more information on normal pension age, see the Re-joiner Glossary page. 

Are there any other key areas to consider?

Death-in-service lump-sum

As a member of the LGPS, if you die in service a lump-sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension, and die before it is paid, a lump-sum equal to five times the deferred pension is paid. However, only one amount for lump-sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account, only the greater of the lump-sum life cover for your deferred benefit or for your active pension account would be payable.

Paying extra contributions

Have you paid extra contributions towards buying additional pension? This would include additional voluntary contributions (AVCs) and additional pension contributions (APCs). Please read the information paying extra contributions in the Re-joiner Glossary page to find out what your choices in respect of these are.

Transferring the value of your deferred benefit to another pension scheme

Please note that even if you choose not to combine your benefits, you will not be able to transfer the value of your deferred benefits to another pension scheme whilst you are contributing to the LGPS or if you have less than one year to go before reaching your normal pension age.

What next?

Please complete the attached option form to tell us whether or not you wish to combine your benefits**. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible. If we do not receive your completed form within 12 months of the date you left the scheme in the employment in respect of which the deferred benefit entitlement arose, your deferred benefit will automatically be transferred to your ongoing active pension account at the end of the 12-month period. 

**Please note that if you have more than one ongoing employment in which you are continuing to contribute to the LGPS, please indicate which active pension account you wish your deferred benefit to be combined with.

This scenario applies when you have left employment after 31 March 2014 with an entitlement to a deferred refund in the LGPS, and you were in the scheme on both 31 March and 1 April 2014, and continue to be an active member in an ongoing employment.

As you are continuing in the LGPS in your other employment(s), you are not eligible to take a refund of the contributions in your deferred refund account, and so the amount of pension you have built up after 31 March 2014 in your deferred refund account will automatically be transferred and added into your ongoing active pension account.

If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will need to indicate on the election form we send you which active pension account you wish your deferred refund account to be combined with.

The membership you built up before 1 April 2014 in the final salary scheme will continue to count as final salary membership and will automatically be linked to your ongoing active pension account. In order to ensure you get the appropriate level of membership for that period, your pre-1 April 2014 membership from the employment that has ceased is adjusted, using the following formula, if your final pay on the day you ceased being a member in the employment that has ceased is different to the pay on that day in your ongoing employment.

When you leave your ongoing employment in the future your final pay in that employment will be used to work out your final salary benefits for your pre-1 April 2014 membership. You will also have pension benefits for all the membership you have built up in the career average scheme (i.e. for membership after 31 March 2014). See Working out your benefits in the LGPS in the Re-joiner Glossary page for information on how these benefits are calculated.

For the pension you have built up in the final salary scheme (before 1 April 2014) your normal pension age would be protected at age 65. For the pension you have built up in the career average scheme (on or after 1 April 2014) your normal pension age is now linked to your State Pension Age (minimum age 65).

If you have rule of 85 protections these protections will continue to apply to you. See the Re-joiner Glossary page for more information on the rule of 85. 

This scenario applies when you left an employment after 31 March 2014 with an entitlement to a deferred benefit in the LGPS, were in the scheme on both the 31 March and 1 April 2014, and continue to be an active member in an ongoing employment.

As you are continuing in the Local Government Pension Scheme (LGPS) in your other employment(s), you need to decide what should happen to the deferred benefits you have built up in respect of your ceased employment.

Unless you tell us otherwise, the amount of pension you have built up after 31 March 2014 in your deferred pension account will automatically be transferred and added to your ongoing active pension account and the membership you built up before 1 April 2014 in the final salary scheme will continue to count as final salary membership automatically linked to your new active pension account.

Decision required

You can elect to keep your deferred benefits separate and, if you wish to do so, this must be done within 12 months from the date you left the scheme in the employment which gave rise to the deferred benefit and while you are still paying into the scheme.

If you make an election to keep your benefits separate you cannot change your decision. If you do not make a decision within 12 months of the date you left the scheme then your deferred benefit will automatically be combined with your new active pension account.

Please note that your employer can extend the 12 month window within which you can elect to keep your benefits separate. However, this is an employer discretion and you would need to speak to your current employer if you wish to seek such an extension.

What do I need to consider before making my decision?

At the moment you have a separate deferred benefit for your previous employment in the LGPS. If you take no action this will be automatically transferred into your ongoing active pension account.

You need to think about the following things when considering whether or not you should keep your benefits separate:

• How will the benefits from my previous employment be worked out?
• When will my benefits be payable?
• Are there other key areas to consider?

How will the benefits from my employment which has ceased be worked out?

You have built up benefits in the both the final salary scheme (up to 31 March 2014) and the career average scheme (from 1 April 2014). See Working out your benefits in the LGPS in the Re-joiner Glossary page for information on how these benefits are calculated.

If your deferred benefit from the employment which has ceased is combined with your new active pension account from the ongoing employment then:

• the membership you built up before 1 April 2014 in the final salary scheme will continue to count as final salary membership. This membership will be linked to your active pension account and when you leave your ongoing employment in the future your final pay in that employment will be used to work out your final salary benefits for your pre 1 April 2014 membership;

• the amount of pension you have built up in the career average scheme from 1 April 2014 would transfer over to your ongoing active pension account.

• in order to ensure you get the appropriate level of membership in respect of your pre-1 April 2014 service, your pre-1 April 2014 membership from the employment that has ceased is adjusted, using the following formula, if your final pay on the day you ceased being a member in the employment that has ceased is different to the pay on that day in your ongoing employment.

If you elect to keep separate deferred benefits then these will increase each year in line with inflation, as currently measured by the rise in the consumer prices index (see the Re-joiner Glossary page page for more information).

When will my benefits be payable?

For the pension you have built up in the final salary scheme (before 1 April 2014) your normal pension age would be protected at age 65. For the pension you have built up in the career average scheme (on or after 1 April 2014), your normal pension age is now linked to your state pension age. For more information on normal pension age see the Re-joiner Glossary page. 

Are there any other key areas to consider?

Death in service lump-sum

As a member of the LGPS, if you die in service a lump-sum of three times your annual pensionable pay would normally be payable. If you have a deferred pension and die before it is paid, a lump-sum equal to five times the deferred pension is paid. However, only one amount for lump-sum life cover is payable from the LGPS so, even if you keep your deferred benefits separate from your active pension account, only the greater of the lump-sum life cover for your deferred benefit or for your active pension account would be payable.

Paying extra contributions

Have you paid extra contributions towards buying additional pension or membership? These would include additional voluntary contributions (AVCs), added years, additional regular contributions (ARCs) or additional pension contributions (APCs). Please read the Re-joiner Glossary page and the entry on paying extra contributions to find out what your choices in respect of these are.

Transferring the value of your deferred benefit to another pension scheme

Please note that even if you choose not to combine your benefits, you will not be able to transfer the value of your deferred benefits to another scheme whilst you are contributing to the LGPS or if you have less than one year to go before reaching your normal pension age.

What next?

We would have sent you an option form.  Please complete this form to tell us whether or not you wish to combine your benefits**. This will enable us to take the appropriate action in respect of your pension rights as quickly as possible.

If we do not receive your completed form within 12 months of the date you re-joined the scheme, your previous deferred benefit will automatically be transferred to your new active pension account at the end of the 12 month period.

**If you have more than one active pension account (because you have more than one current employment in which you are contributing to the LGPS) you will also, if you decide to combine your benefits, need to decide which active pension account you wish your deferred benefit to be combined with.

Combining previous benefits in the LGPS with your new (or ongoing) active pension account requires you to consider your options and make a decision. The information set out in the Rejoining the LGPS page is set out in scenarios specific to your circumstances. Our correspondence will detail what your scenario is.

This glossary is provided to help further explain some of the terms used in the Rejoining the LGPS page and give more detail about how your benefits are calculated in the LGPS, when they become payable and other important information about protections and paying extra contributions in the LGPS. 

Working out your benefits in the LGPS

Working out your LGPS benefits depends on when you built up your service in the scheme.

Career Average Scheme

For membership built up from 1 April 2014: every year you will build up a pension at a rate of 1/49^th of the amount of pensionable pay you received in that scheme year if you are in the main section of the scheme (or half this rate of build up for any period you have elected to be in the 50/50 section of the scheme). This pension is then added to your pension account and revalued at the end of each scheme year so your pension keeps up with the cost of living.

Pensionable Pay: For benefits built up from 1 April 2014your pensionable pay is the amount of pay on which you pay your normal pension contributions.  However if during the scheme year you had been on leave on reduced contractual pay or no pay due to sickness or injury, or had been on relevant child related leave or reserve forces service leave then, for the period of that leave, your pension is worked out based on your assumed pensionable pay.

Final Salary Scheme

For membership built up from 1 April 2008 to 31 March 2014: you receive a pension of 1/60^th of your final pay. There is no automatic lump sum for membership built up after March 2008, but you do have the option to exchange some of your pension for a tax-free lump sum.

For membership built up to 31 March 2008: you receive a pension of 1/80th of your final pay plus an automatic tax-free lump sum of 3 times your pension.

Final Pay

The definition of final salary pay for benefits built up before 1 April 2014 remains the same as before the scheme changed from a final salary to a career average scheme on 1 April 2014 .

Final salary pay is usually the pay in respect of (i.e. due for) the final year of scheme membership on which you paid contributions, or one of the previous 2 years if this is higher. The main differences to the pay used for career average benefits include:

• If you are working part-time when you leave the LGPS, or worked part-time at some point during your last year of membership, your final salary pay is the whole-time pay that you would have received if you had worked whole-time.
• It does not include non-contractual overtime.

There are further protections for final salary pay if your pay is reduced due to a period of sickness, if you are on maternity, paternity or adoption leave or if you pay is reduced or increases to your pay are restricted.

Remember, if your benefits are combined with your new active pension account and they buy an amount of earned pension in the career average scheme, any final salary benefits you had built up will no longer be worked out using the final salary calculations. Instead they will be treated as career average benefits.

Normal Pension Age

The Normal Pension Age for benefits built up to 31 March 2014 (i.e. the final salary scheme) is age 65.

The Normal Pension Age for benefits built up from 1 April 2014 (i.e. the career average scheme) is linked to your State Pension Age (but with a minimum of age 65).

If your deferred benefits are combined with your new active pension account and any final salary benefits you have previously built up continue to be counted as final salary benefits then they will continue to have a Normal Pension Age of 65.

If your benefits are combined with your new active pension account and any final salary benefits you have previously built up are now counted as career average benefits then they will have a new Normal Pension Age which is linked to your State Pension Age (but with a minimum of age 65).

If your benefits are combined with your new active pension account, any existing career average benefits will continue to have a Normal Pension Age linked to your State Pension Age (but with a minimum of age 65).

If you choose to take your pension before your Normal Pension Age the pension you have built up in the scheme will normally be reduced, as it's being paid earlier. If you take it later than your Normal Pension Age it will be increased because it's being paid later. The amount of any reduction or increase will be based on how many years earlier or later than your Normal Pension Age you draw the pension you have built up in the scheme. If your Normal Pension Age for benefits in the final salary scheme is different from your Normal Pension Age in the career average scheme then the level of the reductions or increases applied to each set of benefits will be different. Please note that you cannot take your benefits built up in the final salary scheme separately from the benefits you build up in the career average scheme if they have been combined. All of your pension would have to be drawn at the same time (except in the case of Flexible Retirement).

If you have rule of 85 protections these will still apply. For more information see the explanation of rule of 85 below.

Paying extra contributions?

In the LGPS there are a number of ways members can pay more contributions to increase their benefits. You may have one of the following arrangements. If so, you need to understand what happens to any payments you have already made and whether you can continue to pay these extra contributions in your new employment.

1.    Buying Added Year (extra membership)

These are existing contracts to purchase extra membership and the contract must have commenced before 1 April 2008.

If you combine your deferred benefits with your new active pension account and your final salary benefits continue to be treated as pre 1 April 2014 benefits then your existing contract can continue only if:

• The break between leaving your old employment and starting your new employment is less than 12 months, and

• Within 3 months of re-joining the LGPS in your new employment you make an election to continue paying your extra contributions to buy added years, and

• In those 3 months you pay any extra contributions towards your added years contract that would have been due during the break (if any) between employments.

These added years count towards your benefits in the final salary scheme.

If you combine your deferred benefits with your new active pension account and your final salary benefits are treated as career average pension (i.e. they have bought an amount of earned pension in the career average scheme) then your existing contract cannot continue. Any extra membership you have already bought and that has been credited is used to work out the extra earned pension to be added to your new active pension account, i.e. it would count as career average pension. You cannot make a new election to buy extra membership; you can however consider buying extra pension (known as Additional Pension Contributions). You can contact us for more information.

If you choose not to combine your deferred benefits any existing added years contract cannot continue and any extra membership you have already bought will be included in your deferred benefits. You cannot continue to pay for your added years' contract if you elect to keep separate deferred benefits.

2.    Paying Additional Regular Contributions (ARCs)

These are contracts to purchase extra pension taken out between 1 April 2008 and 31 March 2014

Whether or not you elect to combine your benefits with your new active pension account, there are no circumstances where an existing ARC contract can continue.

If you do combine your benefits with your new active pension account and your final salary benefits continue to be treated as pre 1 April 2014 benefits then the amount of ARCs which you have already bought will be added to the value of your final salary pension.

If you combine your benefits with your new active pension account and your final salary benefits are treated as career average pension (i.e. they have bought an amount of earned pension in the career average scheme) any extra pension you have already bought and been credited with is taken account of when calculating the extra earned pension to be added to your new active pension account.

If you do wish to pay more contributions in your new employment you can consider buying extra pension (known as Additional Pension Contributions). You can contact us for more information.

If you choose not to combine your benefits, any extra pension you have already bought will be included in your deferred benefits. You cannot continue to pay for your ARCs contract if you elect to keep separate deferred benefits.

3.    Paying Additional Pension Contributions (APCs)

These are contracts to purchase extra pension taken out on or after 1 April 2014.

Any existing APC arrangements which you have entered into, to buy lost or extra pension, cease once you leave the employment they are linked to.

Any extra pension built up via an APC will be added to your new active pension account if your benefits are combined.  

If you choose not to combine your benefits any existing any extra pension you have already bought will be payable with your deferred benefits. You cannot continue to pay towards your previous APC arrangement if you elect to keep separate deferred benefits.

You can elect to take out another APC arrangement in your new employment.  You can contact us for more information.

4.    Additional Voluntary Contributions (AVCs)

If you have paid AVCs, the accrued value of your AVCs must be transferred to an AVC arrangement offered by your new administering authority if you transfer your main scheme benefits. 

However, there is an exception to this rule. If you were previously a member of the LGPS on 31 March 2014 and 1 April 2014 (or you were not a member on those dates but elect within 12 months of returning to the LGPS to be treated as if you had been a member on those dates) and you do not have a continuous break in active membership of a public service pension scheme of more than 5 years, you can choose not to transfer the accrued value of your AVCs to an AVC arrangement offered by your new administering authority. If you do transfer your accrued AVC value then once it's transferred to the new arrangement it is considered a contract under the scheme rules in force at the time of the transfer. That means under current rules you can pay up to 100% of your pay as AVC contributions, the amount of tax free cash you can receive from the AVCs is capped at 25% of the value of your AVC account, and the Normal Pension Age for the benefits from the AVCs is linked to your State Pension Age (with a minimum of age 65). If, however, you choose not to transfer the accrued value of your AVCs and your election to pay those AVCs had been made prior to 1 April 2014, the amount of tax free cash you can receive from the AVCs is up to a maximum of 100% of the value of that AVC account.

Public service pension scheme

A public service pension scheme includes a pension scheme covering civil servants, the judiciary, the armed forces, any scheme in England, Wales or Scotland covering local government workers, or teachers, or health service workers, or fire and rescue workers or members of the police forces; or membership of a new public body pension scheme. 

Rule of 85

What is the Rule of 85?

The rule of 85 is satisfied if your age at the date you draw your benefits and your scheme membership (each in whole years) add up to 85 or more.

If you work part-time, your membership counts towards the rule of 85 at its full calendar length.

Not all membership may count towards working out whether you meet the 85 year rule.

Who does it apply to?

If you were a member of the LGPS on 30 September 2006, some or all of your benefits paid early could be protected from an early payment reduction.

Working out how you are affected by the 85 year rule can be quite complex, but this should help you work out your general position. 

• If you would not satisfy the 85 year rule by the time you are 65, then all your benefits are reduced if you choose to draw your pension before your Normal Pension Age. The reduction will be based on how many years before your Normal Pension Age (protected Normal Pension Age of, usually, age 65 for pension built up before 1 April 2014 and new Normal Pension Age (linked to State Pension Age) for pension built up from 1 April 2014) you draw your benefits. 

• If you will be age 60 or over by 31 March 2016 and choose to draw your pension before your Normal Pension Age, then, provided you satisfy the 85 year rule when you start to draw your pension, the benefits you build up to 31 March 2016 will not be reduced.

• If you will be under age 60 by 31 March 2016 and choose to draw your pension before your protected Normal Pension Age of, usually, age 65, then, provided you satisfy the 85 year rule when you start to draw your pension, the benefits you've built up to 31 March 2008 will not be reduced. Also, if you will be aged 60 between 1 April 2016 and 31 March 2020 and meet the 85 year rule by 31 March 2020, some or all of the benefits you build up between 1 April 2008 and 31 March 2020 will not have a full reduction.

The only occasion where rule of 85 protection does not automatically apply is if you choose to voluntarily draw your pension on or after age 55 and before age 60. 

If I decide to aggregate my benefits will that impact on the rule of 85 protections I have?

If you are deciding whether or not to aggregate your benefits in the LGPS you need to be aware of the potential impact on any rule of 85 protections.

Please note that if the rule of 85 applies to part of all of your previous benefits in the LGPS and there is a long gap between the day you previously left the scheme and the day you re-joined the scheme then combining your benefits could impact on your rule of 85 protection as it could make your rule of 85 date later. If this is the case, keeping your deferred benefits separate could protect your earlier rule of 85 date on that deferred benefit but you would not have rule of 85 protection on your benefits accruing in your new employment. The reason the earlier rule of 85 date on that deferred benefit would be protected is because when working our your rule of 85 date the period after you left the LGPS is also included (known as notional service) in the calculation even though you were not a member of the LGPS. If you re-join and combine your previous benefits then the notional service would no longer be used and any gap in membership of the LGPS membership would not be used when calculating when you would meet the rule of 85 in the new employment.

Annual Allowance

The annual allowance is the amount your pension savings can increase by in any one year without paying extra tax. For the LGPS the pension savings year runs from 1 April to 31 March. As of the tax year 2023/24, the annual allowance is currently £60,000.

You would only be subject to an annual allowance tax charge if the value of your pension savings for a tax year increases by more than £60,000. Combining your previous deferred benefits where your final salary benefits are now linked to your new ongoing final pay would increase your pension savings in the year you transfer. However, a three year carry forward rule allows you to carry forward unused annual allowance from the last three tax years. This means that even if the value of your pension savings increase by more than £60,000 in a year (£40,000 prior to the tax year 2023/24), you may not be liable to the annual allowance tax charge.

Most people will not be affected by the annual allowance tax charge because the value of their pension saving will not increase in a tax year by more than £60,000 or, if it does, they are likely to have unused allowance from previous tax years that can be carried forward.

Consumer Prices Index (CPI) (i.e. the Cost of Living Adjustment)

The Consumer Price Index (CPI) is the official measure of inflation of consumer prices in the United Kingdom. This is currently the measure used to adjust your pension account at the end of every scheme year when you are an active member of the scheme and, after you have ceased to be an active member, it is used to increase (each April) the value of your deferred pension in the scheme and any pension in payment from the scheme. The adjustment ensures your pension keeps up with the cost of living.