The LGPS allows pension credit members to transfer the value of the pension credit to another qualifying pension scheme or arrangement (other than to another LGPS fund) any time up to one year before age 65.
Please note, pension credit benefits cannot be combined with any rights a you may have in the LGPS in your own right – for instance, as a result of being a contributor to the scheme.
If you choose to keep it with us, you can have it with a reduction from age 55 or without a reduction from your normal retirement age. However, if the Pension Sharing Order was implemented before 1 April 2014, the earliest age you would be able to access your benefits would be age 60.
If a pension sharing order is put in place, the pension will be retained by us, until you reach retirement age.
If you receive a share of your partner’s pension, you may have some choices about what you can do with it. These could include:
- becoming a member of your partner’s pension scheme
- transferring a sum of money to your own pension
- transferring a sum of money to a new pension you have set up
What will a pension share mean if I am a Scheme member?
Pension share ordered before retirement
Your pension, lump sum retirement grant and any subsequent spouse’s benefits will reduce by the percentage amount allocated to your former spouse. This is known as your pension debit.
On retirement, the pension debit will be increased in line with the rise in the Consumer Price Index. This will be calculated from the date the amount of your pension debit was first stated and the date your pension becomes payable. This revalued amount of pension debit is then deducted from your total benefits.
If you have remarried, a pension share will reduce the benefit payable to your new spouse in the event of your death. However, if you have dependent children at the time of your death, any child’s pension payable will not be reduced because of a pension share.
You can still transfer your remaining benefits to another pension scheme on ceasing membership of the LGPS. If the transfer is to another LGPS fund, the benefits will be transferred in full and the ‘pension debit’ applied by the new fund when you retire.
If the transfer is to another type of pension scheme or arrangement, the transfer value will just be your benefits minus the debited amount that will be going to your former spouse which will stay in the LGPS scheme.
What will a pension share provide for the former spouse?
Pension share ordered before the member’s retirement
Normally, within four months of a pension-sharing order being received, your former spouse will be granted pension benefits in the Local Government Pension Scheme in their own right. These are equal to the value of the share of the member’s benefits granted by the court and are known as pension credit benefits.
Transferring benefits
A former spouse can decide to transfer the value of the pension credit to another qualifying pension scheme or arrangement (other than to another LGPS fund) any time up to one year before age 65.
Pension credit benefits cannot be combined with any rights a former spouse may have in the LGPS in their own right – for instance, as a result of being a contributor to the scheme.
Buying additional pension benefits
A former spouse will not be able to make Additional Voluntary Contributions (AVCs) to the LGPS, nor can they purchase added years of membership in the LGPS in order to increase the ‘pension credit’ benefits.
Paying the shared pension
Once the pension share is confirmed, we will advise the former spouse on how to apply for pension credit benefits.
The pension will be taxed when paid, (if appropriate).
Because a former spouse’s pension credit benefits are independent from the scheme member’s benefits, a pension-sharing order does not lapse on the death of the scheme member or the remarriage of the former spouse.
However, if a former spouse remarries and that marriage ends in divorce or annulment, the pension credit could be subject to a pension-sharing order.