The LGPS is one of the best occupational pension schemes in the UK. Whatever your reasons for considering opting-out of the scheme, we ask that you give this matter careful consideration or take independent financial advice before making any final decisions.
You might want to consider an alternative option before electing to opt out of the LGPS. This option involves moving to the 50/50 section of the scheme.
The 50/50 section allows you to pay half your normal contributions in return for half your normal pension build up. Although you pay half, you will still retain full life and ill health cover. To find out more, take a look at the 50/50 section page.
Opting out form
If you still wish to continue with opting out, you can leave the LGPS from your first day of eligible employment. You can do this by giving your employer notice in writing and you will need to complete the opt out form.
Re-enrolment and re-joining the scheme
If you opt out you should be aware that your employer is legally required to re-enrol you back into the LGPS, approximately every 3 years, if you are an eligible job holder.
Once you have left the scheme, you can re-join at any time before the age of 75, provided you are still eligible. Please speak to your employer for further information on re-joining the LGPS.
Opting out benefits breakdown
Opting out before 3 months
If you opt-out of the LGPS and have been a member for less than 3 months, you will be treated as never having been a member. Your employer will refund any contributions you have paid during that time through your pay.
Opting out with 3 or more months membership and before the 2 year vesting period
If you opt-out of the LGPS having been a member for 3 months or more but have not completed the 2 year vesting period, you can have a refund of your contributions (less any statutory deductions) or transfer your pension to another qualifying pension scheme.
Opting out after meeting the 2 year vesting period
If you opt out after meeting the 2 years vesting period, you will have deferred benefits in the scheme. You will generally have the same options as anyone leaving their job before retirement, with the exception that you cannot draw your deferred benefits unless you have left your job.
You can re-join the scheme, however you will not be permitted to join the two periods of membership together. Instead, you will have acquired two separate sets of pension benefits. For more information on this, please visit the LGPS website.
Remember, this should be your choice!
If you are asked or forced to opt out of the LGPS pension scheme, you can tell The Pensions Regulator. Equally, no one can force you to remain a member of the scheme.
This should be your choice and you must let The Pensions Regulator know if your employer or pension scheme aren’t doing what they need to.