What do I do if an employee wants to join the pension scheme?
If an employee wishes to start pension contributions and therefore join the Local Government Pension Scheme (LGPS), they must contact the employer's Payroll or Human Resources Officer in writing by sending a letter, which has to be signed by the employee. Or, if sending it electronically, their e-mail has to contain the phrase “I confirm I personally submitted this notice to join the Local Government Pension Scheme”.
The employee will then be sent further information on the scheme by the employer, including a Pension Membership form to complete, and will be enrolled into the LGPS from the next available pay date. The form that they are given should, once completed, be returned to the Pension Section.
Where can teachers find out about their pension?
Teachers pay into a different pension scheme. More information is available on the teacher’s pensions website
Are there age limits to being in the pension scheme?
An employee can remain in and can join the scheme up to age 75. They will receive pension benefits once they have finished their employment, or at age 74 and 364 days, whichever is the earlier.
What is the effect of going part time on a member’s pension?
Any decision to begin working a lesser number of hours will mean a reduction in pension benefits as compared to those which would have been payable had the change not happened. The member is earning less, and therefore is potentially paying less, and benefits are directly linked to pensionable pay.
The important aspect to remember, in the case of a member who reduces their hours, the benefits accrued up to that point will not be affected. Only the pension built up following the date of change will be going up at a slower rate. This ensures a fair way of working out pension benefits for all.
How much does a member pay?
The contribution rate is decided by reference to a pay band. These bandings have been designed to make paying towards the scheme much fairer for all.
However in real terms it will be less than the percentage rate allocated, because pension contributions attract tax relief. This means that pension contributions are paid before tax is paid.
What is the employer’s contribution rate?
The rate of employer’s contributions is assessed every 3 years as part of the regular valuation of the Pension Fund and takes effect from the following year. Individual Employer rates are sent to Finance Directors when they become known, but are available from the Pension Section upon request.
What happens if a member wants to opt out?
The Pension Scheme is not compulsory, although because of the excellent benefits available, an employee may wish to take financial advice before opting out. Our page on leaving the scheme contains all of the information a member will need.
Can a previous pension be transferred into the LG scheme?
If that pension is with another Local Authority or a scheme which is a member of the Public Sector Transfer Club, then a member can request a transfer, as long as it takes place within the first 12 months of joining. To find out which schemes are members of the please check the Civil Service Public Sector Transfer Club list
Periods of reduced or nil pay due to sickness absence and periods when the member is on reduced pay due to child related leave
If a member moves to a period of reduced contractual pay or nil pay as a result of sickness or injury; or reduced pensionable pay during relevant child related leave (i.e. ordinary maternity, paternity or adoption leave and any paid additional maternity, paternity or adoption leave) payroll should be notified of the date of the reduction and the requirement to apply Assumed Pensionable Pay (APP) for pension purposes.
Note this does not include the unpaid additional maternity, paternity or adoption leave available at the end of relevant child related leave; this is to be treated as unpaid leave of absence and no APP accrues during that period.
If the member was in the 50/50 section before dropping to nil contractual pay because of sickness, they should be returned to the main section from the beginning of the next pay period (provided they are still on no pay at that time due to sickness).
The idea of APP is that the benefits calculated that year for the member are not adversely affected because they have been absent from work.
For Reserve Forces Leave contact the Pensions Section for advice.
Periods of nil pay during maternity absence and child related leave and approved leave of absence
Employees in the scheme may choose to buy extra pension using Additional Pension Contributions (APCs) (with or without a contribution from the employer) in the following circumstances:
- Approved unpaid leave of absence
- Any period of unpaid maternity leave or child related leave
NB. This does not apply to reduced nor nil pay due to sickness, or reduced pay due to unpaid maternity leave or child related leave. Other protections are in place for these situations.
Where an employee elects to pay an APC to purchase any or the full lost amount of pension within 30 days of returning to work the employer shall pay 2/3rds of the cost of the APC (a shared cost APC). The amount of lost pension shall be calculated as 1/49th of the APP for the period of unpaid leave if they were in the main section during that period, or 1/98th of the APP for the period of unpaid leave if they were in the 50/50 section during that period. Note that an employee can commence a shared cost APC in this circumstance even if they are in the 50/50 section.
A member should print, complete and return this form to the Pension Section if they wish to make an enquiry:
Additional Pension Contributions (APCs) quote request form Opens new window
KIT DAYS - If the scheme member does have any paid KIT days in an unpaid period of additional maternity leave, these will need to be discounted when calculating the pay lost in order to count this as pensionable service.
Industrial action
A member can always pay contributions to make up for pay lost following industrial action. In all cases the member pays the full cost, there are no additional employer contributions due.
Where an employee takes strike action, employers will be asked to inform members that they may choose to buy extra pension to replace the amount lost. Employers will be asked to provide Pension Section with a list of those members and the amount of pay lost so that Pension Section can make the calculations and provide payroll sections with the amount of buyback to be deducted. This is called an APC, and Additional Pension Contribution.
Employers will also need to provide Pension Section with a list of those members who have chosen not to repay.
Please note that an employee can commence an APC in this circumstance even if they are in the 50/50 scheme.
It is strongly recommended that the pension repayment issue not be addressed until the dispute is settled, and all missing days are dealt with in one single process and assessment. All elections should be made within 30 days of the close of the dispute.