Saving it for later You’re a deferred member if you left the scheme or office before the age you can take your pension. Your deferred pension is safe with us until it’s time to take it, or you transfer it to another pension scheme. Find out how your deferred pension goes up over time, when you can take it, and more. When will my deferred benefits be paid? You can claim your deferred pension benefits at any time between age 60 and 75. We pay your deferred benefits from your normal pension age unless you decide to take them earlier at a reduced rate, or later at an enhanced rate. We will send you a retirement pack just before your normal pension age. The pack will include a form that you need to fill in and return so we can pay your deferred benefits. Your normal pension age is the age you can retire and take the pension benefits you have built up in full. Are deferred benefits inflation proofed? Deferred benefits keep their value while they’re with us because we adjust them every year in line with the Consumer Prices Index. You’ll be able to see how your deferred benefits are changing on your statement each year. Your statement will show you the value of your benefits at the time you left the scheme, and the current value of your benefits, including cost-of-living increases that we add each April. Normal pension age What is my normal pension age? Your normal pension age is the age you can retire and take the pension you have built up in full. This is generally your 65th birthday. What is my state pension age? Use the government’s state pension age calculator to find out your state pension age. Note that the calculator doesn’t include proposed changes to state pension age. Ill health What happens if I become ill before I start getting my pension? If you become permanently too ill to work at any age we may be able to pay your benefits on health grounds. You need to apply in writing to your former council. Pensions increase Deferred pensions go up by 3% in 2018 The 3% increase on deferred benefits is due from 9 April 2018. This increase is based on the value of the Consumer Prices Index on 30 September 2017. If you left your office or the scheme part way through the year you won’t get the full increase straightaway. Increases on your deferred benefits usually start building up from the day after the date you left the pension scheme. You’ll start to get the full increase from next year. Will my pension increase in the future? Your deferred benefits will increase each April in line with the rise in the Consumer Prices Index for the previous September. When you start getting your pension, it will go up each year in this way too. How your deferred pension is worked out The membership you have built up from the date you joined the scheme to the date you left the pension scheme is used to work out your pension benefits. It’s all treated as full-time membership. What’s career-average pay? It’s the pay we use to work your pension benefits out, and is the pay for each year of your membership (or part year) in the scheme up to the date you left the scheme, which is increased to take into account cost of living increases (except for your final year or part year). The total of all the revalued pay is then divided by your total membership to give your average pensionable pay over the time you were a member of the scheme. Example Let’s say you were in the pension scheme for three years starting on 1 April 2013. This is how we would work out your career-average pay. Step 1 We increase each year’s pensionable allowances by the cost of living increases and add them together. Year-end Year-end pay (£) Revalued amount 31/03/2014 11500.00 12512.00 31/03/2015 12500.00 12975.00 31/03/2016 14000.00 14000.00 Total £39487.00 Step 2 We work out how long you were a member. So that’s 1 April 2013 to 31 March 2016, or 3 years 0 days. Step 3 We divide the total adjusted allowances by the time you were in the scheme. That’s £39487.00 divided by 3 years. Your career-average pay in this example would be £13162.33. If your allowances vary over the years because you hold different positions, we take this into account in your career-average pay calculation. How do we calculate your pension We work out your annual pension using the following calculation. Pension = membership x career-average pay ÷ by 80 You get an automatic lump sum (a one-off tax-free payment) too, which is simply three times your pension. Transfers Can I transfer my pension rights to another pension scheme? A transfer can be paid to either: a UK HM Revenue & Customs registered pension scheme, or a Qualifying Recognised Overseas Pension Scheme (QROPS) You can ask your new pension scheme/provider to request transfer details from us. Or you can contact us directly. But – to be entitled to a transfer – you must: Have at least 3 months membership Not be retiring from the scheme on grounds of redundancy, business efficiency or ill-health Leave the scheme and elect for a transfer at least 1 year before your NPA Not already be in receipt of a LGPS pension (England & Wales only) or have previously retired on Tier 3 ill health grounds Not be an active member of the LGPS in any job (England & Wales only) You should think carefully before deciding to go ahead with a transfer Your deferred benefits are valuable benefits that keep pace with the cost of living both before and after you start drawing your pension. And they include generous death benefits for your dependants. You should compare these benefits to the benefits a transfer would provide for you before making any decision to transfer. The Money Advice Service gives clear unbiased advice and information about all sorts of financial matters. You may find some useful information about transferring pension rights at www.moneyadviceservice.org.uk (external link) Before a transfer can be paid, you may be required to take appropriate independent advice (at your own cost) from an adviser authorised by the Financial Conduct Authority (FCA) – see ‘Freedom & Choice’ below for details. You should consider taking this advice, even if you are not required to do so. Freedom & choice Changes to Defined Contribution Schemes In the 2014 budget the Government announced reforms to defined contribution schemes, like personal pensions. These reforms are effective from 6 April 2015 and give members of such schemes, aged 55 or over, greater flexibility over how they can access their pension savings. However, even under the new flexibilities, HMRC rules require that anything above 25% of pension savings will be taxable as pension income at a member’s marginal rate. To help people understand their retirement choices from schemes offering the new flexibilities, the government has introduced a free and impartial service called Pension Wise Transfers from the LGPS to Defined Contribution Schemes The LGPS isn’t a Defined Contribution Scheme so the new flexibilities don’t apply to it. But there are indirect changes for LGPS members considering transferring to such a scheme. For details – refer to this Q & A for LGPS members. Additional Voluntary Contributions (AVCs) The Department for Communities and Local Government (DCLG) are currently considering how the changes will impact on LGPS in-house AVC plans. Pension Scams – Don’t let a scammer enjoy your retirement! The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) are part of Project Bloom – a multi-agency taskforce which is working to combat pension scams. The taskforce includes the Department for Work and Pensions, HM Treasury, the Serious Fraud Office, City of London Police, the National Fraud Intelligence Bureau, The Pensions Advisory Service and the National Crime Agency. In August 2018 the FCA and TPR joined forces to launch a new joint ScamSmart pension scams campaign. Find out how pension scams work, how to avoid them and what to do if you suspect a scam Pension scams can be hard to spot. Scammers can be articulate and financially knowledgeable, with credible websites, testimonials and materials that are hard to distinguish from the real thing. How pension scams work Scammers usually contact people out of the blue via phone, email or text, or even advertise online. Scammers will make false claims to gain your trust. For example: Claiming they are authorised by the Financial Conduct Authority (FCA) or that they don’t have to be FCA authorised because they aren’t providing the advice themselves. Claiming to be acting on the behalf of the FCA, TPA or the government service Pension Wise. Legislation to ban pensions cold-calling came into force on 09/01/2019, meaning that companies making unsolicited phone calls to people about their pensions face enforcement action, including fines of up to £500,000. The regulations prohibit cold-calling in relation to pensions, save for circumstances in which the caller is authorised by the FCA, or is the trustee or manager of an occupational or personal pension scheme, and when the individual being contacted consents to the calls, or has an existing relationship with the caller. Scammers design attractive offers to persuade you to transfer your pension pot to them (or to release funds from it). It is often then invested in unusual and high-risk investments like overseas property, renewable energy bonds, forestry, storage units, or simply stolen outright. Scam offers often include: Free pension reviews Higher returns - guarantees they can get you better returns on your pension savings Help to release cash from your pension, even though you’re under 55 (an offer to release funds before age 55 is highly likely to be a scam, as it’s normally only in rare circumstances, such as serious ill health, that this is allowed). The option to take more than 25% of your pension savings as ‘tax free’ cash. HMRC rules require that all pension savings above 25% are taxable as pension income at a member’s marginal rate, even if they are taken as a lump sum. High pressure sales tactics - the scammers may try to pressure you with ‘time limited offers’ or even send a courier to your door to wait while you sign documents. Unusual investments - which tend to be unregulated and high risk, and may be difficult to sell if you need access to your money. Complicated structures where it isn’t clear where your money will end up Long-term pension investments – which mean it could be several years before you realise something is wrong. 4 simple steps to protect yourself from pension scams Step 1 - Reject unexpected offers If you’re contacted out of the blue about a pension opportunity, chances are it’s high risk or a scam. If you get a cold call about your pension, the safest thing to do is to hang up. If you get unsolicited offers via email or text you should simply ignore them. Fortunately, most people do reject unsolicited offers – FCA research suggests that 95% of unexpected pension offers are rejected. Be wary of offers of free pension reviews. Professional advice on pensions is not free – a free offer out of the blue from a company you have not dealt with before is probably a scam. And don’t be talked into something by someone you know. They could be getting scammed, so check everything yourself. Step 2 - Check who you’re dealing with Check the FCA Register - Make sure that anyone offering you advice or other financial services is FCA authorised. If you don’t use an FCA-authorised firm, you also won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) so you’re unlikely to get your money back if things go wrong. If the firm is the Register, call the FCA Consumer Helpline on 0800 111 6768 to check the firm is permitted to give pension advice. Check they are not a clone - A common scam is to pretend to be a genuine FCA authorised firm (called a ‘clone firm’). Always use the contact details on the Register, not the details the firm gives you. Step 3 - Don’t be rushed or pressured Take your time to make all the checks you need – even if this means turning down an ‘amazing deal’. Be wary of promised returns that sound too good to be true and don’t be rushed or pressured into making a decision. Step 4 - Get impartial information or advice You should seriously consider seeking financial guidance or advice before changing your pension arrangements. Pensions Advisory Service - provide free independent and impartial information and guidance. Pension Wise - If you’re over 50 and have a defined contribution pension, Pension Wise offers pre-booked appointments to talk through your retirement options. Financial advisers - It’s important you make the best decision for your own personal circumstances so you should seriously consider using the services of a financial adviser. If you do opt for an adviser, be sure to use an adviser that is regulated by the FCA and never take advice from the company that contacted you or from someone they recommend, as this may be part of the scam. If you suspect a scam, report it Report to the FCA - You can report an unauthorised firm or scam to us by contacting our Consumer Helpline on 0800 111 6768 or using our reporting form. Report to Action Fraud - If you suspect a scam you should report it to Action Fraud on 0300 123 2040 or at www.actionfraud.police.uk. If you've agreed to transfer your pension and now suspect a scam, contact your pension provider straight away. They may be able to stop a transfer that hasn't taken place yet. If you are unsure of what to do contact The Pensions Advisory Service for help on 0800 011 3797. If you are taken in by a pension scam and agree to transfer, you will probably lose most, if not all, of your pension savings. You could also receive tax charges of up to 55% of the value of your pension for taking what is classed as an ‘unauthorised payment’ for tax purposes. If you do receive an ‘unauthorised payment’, you must declare it to HM Revenue & Customs (HMRC). If you fail to declare an unauthorised payment to HMRC, you may be charged penalties in addition to the tax. Be ScamSmart with your pension To find out more, visit www.fca.org.uk/scamsmart where you can view pension scam resources including an infographic and TV and radio ads. Linking LGPS membership Can I link my previous CLLR LGPS membership to my current membership? No, you can’t link your councillor LGPS membership to any LGPS membership you have because you have a job within LGPS. Death benefits Death grants For deferred members, the death grant if they die whilst still a deferred member is their deferred lump sum, including cost of living increases from the date of leaving to date of death. However the death grant that is payable may be affected if you have active membership elsewhere in the Local Government Pension Scheme. Please contact us for further information about this. Choosing who receives the death grant You can choose who should receive any death grant by filling in death grant 'expression of wish' form. If you have not filled in a death grant nomination form and would like to do so, please download a form from our website or contact us. If you do this, we can pay any money due quickly, and inheritance tax will not be taken from the death grant. What will my dependants get if I die? We automatically pay pensions for a surviving husband, wife or civil partner on your death. Children's pension Quotes How do I get a quote Contact us for a quote when you decide to claim your benefits. We will send you some forms to fill in and a booklet explaining your benefits. Can I get my deferred benefits early? From 14th May 2018, if you are age 55 or over you can ask the Fund to pay your deferred benefits early. If you want to do this, please ask us for a quote three months before the date you want to take your benefits. We may not be able to pay your benefits if you are working for a local government employer.