Scheme members

16. Preserved/deferred benefit statement

The statement shows the current value of your annual pension and lump sum (if any), including any pensions increase. You can check your statement, and view our newsletter, by logging on to our secure 'My pension online' portal. 'My pension online' gives secure access to your LGPS pension account. You can view your benefit statement, check your pension record and produce your own pension quotes. You can also view and change who you have nominated to receive your lump sum death grant.

Online access is fast, secure and convenient. Because of this your LGPS deferred benefit statement is now only available online. As part of the registration process, we will ask you for your email address. By the end of August each year we will send you an email reminder to let you know that your statement is available. We will not use your email address for any reason other than LGPS benefit administration.

Remember to login and check that your deferred benefit statement is correct. If you believe any of the details on your statement are incorrect, please contact us

 

 

Deferred benefits explained

Deferred benefits are pension benefits calculated when you leave the LGPS before you retire. We hold them in the pension fund for you until:

  • you decide to transfer them to another pension scheme
  • they are due to be paid at your normal pension age (NPA)
  • your pension is paid to you, earlier than your NPA, if you retire early or due to ill health

Your NPA depends on when you left the LGPS.

 

Leaving the LGPS scheme

If you left the scheme before 1 April 2014, your benefits have an NPA of 65. But if you left the scheme after this date, your NPA is linked to your own State Pension age. 

Leaving the scheme before 1 April 2014

For all service up to 31 March 2014, this includes your:

  • membership - the length of time you paid into the scheme. This is adjusted for any periods when you worked part time, had child related absence, trade dispute absence or an absence with permission
  • final pay figure - an average of your pensionable salary in the year before you left work and the cumulative effect of any pensions increase

Leaving the scheme after 1 April 2014

Every year you build up a pension at a rate of 1/49th of the amount of pensionable pay (and any assumed pensionable pay) you received in that scheme year, if you are in the main section of the scheme It builds up at half this rate for any period you have elected to be in the 50/50 section of the scheme (1/98th).

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 based on your assumed pensionable pay.

The amount of pension built up during the scheme year is added to your pension account. It is revalued at the end of each scheme year so your pension keeps up with the cost of living.

The scheme year runs from 1 April to 31 March. f you hold separate pensionable employments you will have a separate pension account for each job

 

Working out your pension and lump sum

For service built up before 1 April 2008

We multiply your membership by your final pay figure and divide this amount by 80 to calculate your pension. Your tax free lump sum is exactly three times your pension. For example, if you were a full time member for 16 years and your final pay was £16,000, your pension benefits will be:

  • Annual Pension: (16 x £16,000) ÷ 80 = £3,200
  • >Retirement Grant/Lump Sum: (16 x 16,000) x 3 ÷ 80 = £9,600

For service after built up between 1 April 2008 and 31 March 2014

We multiply your membership by your final pay figure and divide this amount by 60 to calculate your pension. There is no automatic lump sum for post 31 March 2008 service. For example, if you were a full time member for 2 years after 31 March 2008 and your final pay was £16,000, your pension will be:
  • Annual Pension: (2 x £16,000) ÷ 60 = £533.33

For service built up after 31 March 2014

From 1 April 2014 your pension builds up on a Career Average Revalued Earnings (CARE) basis. Every year from 1 April 2014 your pension builds up at a rate of 1/49th of the amount of pensionable pay (and any assumed pensionable pay) you received in that scheme year, if you are in the main section of the scheme. It builds up at half this rate for any period you have elected to be in the 50/50 section of the scheme (1/98th). 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 based on your assumed pensionable pay. The amount of pension built up during the scheme year is added to your pension account. It is revalued at the end of each scheme year, in line with HM Treasury Orders. The scheme year runs from 1 April to 31 March. 
 
For example, if you were a full time member for 1 year from 1 April 2014 to 31 March 2015, and your pensionable pay was £20,000, your CARE pension will be CARE Pension: £20,000 ÷ 49 = £408.16
 
If you hold separate pensionable employments you will have a separate pension account for each job. Your Normal Pension Age is linked to your State Pension Age for benefits built up from 1 April 2014.
Your total pension will be the sum of 80ths, 60ths and CARE pension, where applicable.

 

Taking your deferred benefits

Changes to the scheme regulations mean you can now take your deferred benefits before your NPA, from the age of 55, as long as you’ve left the employment the benefits relate to. This has always been the case if you left on or after 1 April 2014, but now also applies if  you left before 1 April 2014. 
 
You can draw your deferred benefits in the following ways:
If you are unable to work again because of ill health, you may be able to receive your pension benefits in full, without a reduction, whatever your age was when you left the LGPS. Please contact your former employer if you feel this applies to you. 
 
Your statement shows the date from which your benefits are payable in full. This is normally the earliest possible date you could receive deferred benefits without any penalty for drawing them earlyIf you are considering retiring and would like to know more about the process, please visit our understanding your LGPS retirement webpage.

Pension reduction if you take your benefits early

The reduction is based on how early you retire (in years and days). For example, if your normal retirement age is 65 and you ask for payment from age 60, the reduction to your pension is applied for taking benefits 5 years early. The early payment reductions apply to both your pension and lump sum. The reduction depends how long before your normal retirement age you want the payment to start. The earlier you retire, the greater the reduction. Visit the Early Retirement reduction percentages page for more information.
 
You can apply to your former employer for release of your deferred benefits on ill health grounds at any age. You will be assessed by your former employer’s independent registered medical practitioner on whether you are permanently unfit to carry out gainful employment, or in some cases, your former role. If ill health retirement is granted, your benefits will not be reduced.

 

How deferred benefits are adjusted against inflation

Your deferred benefits are adjusted each April in line with inflation to make sure they keep up with the cost of livingThe pension increase to be applied to your benefits is measured by the Consumer Price Index (CPI) as at the previous September. For April 2020, this increase was 1.7%.

 

Contingent spouse's/partner's pension

This is the estimated annual pension we would pay to a husband / wife / civil partner or eligible cohabiting partner if you die before your benefits are put into payment. If you married or entered into a civil partnership after your date of leaving the LGPS, the amount of spouse’s / partner’s pension may be subject to change.

 

Deferred benefit death grant

If you left the LGPS before 1 April 2008, the death grant is the deferred lump sum retirement grant. If you left the LGPS after 31 March 2008 the death grant is 5 times the annual deferred pension. In either case the value is adjusted in line with inflation to the date of your death.
 
If you are still paying in to the LGPS in another employment, or if you are an LGPS pensioner member, any death grant due is the greater of either the death in service grant, or the deferred pension death grant, or the pensioner death grant. If no nomination is shown on your statement, or you wish to change it, you can update this online. Update your personal details by logging into your pension account online. Or you can download a copy of the LGPS Expression of Wish Form from our Guides, forms and booklets page.
 
Please note that if you have other LGPS benefits the amount of the death grant may be subject to change.

How your pension benefits affect your children if you die

Pensions will be paid to eligible children. Eligible children can include your own children, adopted children and certain other children who depend on you financially. They must normally be under 18, but can be as old as 23 if they carry on in full time education or in training for a trade, profession or vocation. It will also include some adult children who cannot work, because of a disability which arose while they were a child (i.e. they are disabled within the meaning of the Equalities Act 2010.)

 

Transferring your pension to another local government fund

If you have deferred benefits from a previous LGPS employment, and any of these rights relate to membership that you built up in the scheme before 31 March 2014, then you will be provided with information by your new scheme to help you decide whether to move those benefits across from the Buckinghamshire Pension Fund, or to keep them in our Fund. There are a number of factors that you will need to consider. You will be provided with full details to help you to make your decision.
 
If you have deferred benefits from a previous LGPS employment and all of those benefits relate to a period of employment that took place after 1 April 2014, then those benefits will automatically be joined with your new LGPS pension. This is because all post April 2014 rights are equal across the different LGPS funds, and so the Regulations state that a transfer should automatically take place. Your CARE pension rights are exactly the same whichever LGPS fund they are held in, and there is no advantage or disadvantage to your pension being moved.

 

Transfer your pension into another non-local government scheme

Deferred members can choose to transfer their pension benefits to an alternative provider.

If you wish to investigate a transfer, contact us with the name of your new pension provider. We will then provide you with an estimated transfer value which you can take to them along with a set of forms for completion if you wish to proceed with the transfer.  

Your pension benefits can be transferred to any pension scheme you choose, as long as the scheme is approved by Her Majesty’s Revenue & Customs (HMRC) for this purpose. However, if your pension pot value is £30,000 or over,  you will be required to take independent financial advice before you can transfer your benefits. We will ask for evidence of this.

If we are concerned that the new scheme does not meet HMRC requirements, we may choose to delay or reduce transfers out. Members transferring LGPS pension benefits out will also be asked to confirm that they are aware that they are giving up a valuable retirement income for themselves and their dependants. You should also consider any potential tax implications, as well as any additional charges that may be payable to your new provider.

Before you proceed with a transfer out of the LGPS, you should consider your options carefully and ensure that you have fully understood the implications. We recommend that you get financial advice regardless of the size of your pension pot. You should also ensure that you have read the information below on ‘How to avoid pension scams.’ If you suspect a scam, you should report it to Action Fraud immediately.

 

How to avoid a pension scam

It’s really important that you know what to look for to avoid a pension scam, especially if you are considering transferring your LGPS pension benefits to another provider.

Don’t let a scammer enjoy your hard-earned retirement savings, remember:

  • scammers target pension pots of all sizes
  • the average victim loses £91,000
  • anyone can be scammed at any time in their lives, not just when they are close to retirement

Scams are hard to spot and are often disguised with a credible website, testimonials and materials which make them look like legitimate pension schemes.

To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and the Pensions Regulator suggest following these four simple steps:

Step 1 - reject unexpected offers

If you’re contacted out of the blue about a pension opportunity, chances are it’s a scam. Pension cold calling is illegal, and you should be very wary. An offer of a free pension review from a firm you’ve not dealt with before, is probably a scam.

Step 2 - check who you're dealing with

Search ScamSmart and check the FCA’s register to make sure anyone offering you advice is authorised. If they are, check they’re permitted to give pension advice by calling the FCA Consumer Helpline on 0800 111 6768.

If you don’t use a firm authorised by the FCA, you risk not having access to compensation schemes.

Step 3 - don't be rushed or pressured

Take your time to make all the checks you need – even if this means turning down what seems to be an ‘amazing deal’.

Step 4 - get impartial information or advice

You should seriously consider seeking financial advice before changing your pension arrangements. In some cases, for example where you are wanting to transfer more than £30,000 from a Defined Benefit scheme, you must obtain this advice.

Consider using The Pensions Advisory Service which provides free independent and impartial information and guidance.  

If you suspect a scam, report it

Report an unauthorised firm or scam to the FCA using the online reporting form or by calling 0800 111 6768.

If you suspect a scam, report it to Action Fraud on 0300 123 2040 or at www.actionfraud.police.uk.

Be ScamSmart with your pension benefits. To find out more about ScamSmart.

 

Tax payments on your pension and lump sum

Under current legislation your lump sum is tax free. Your pension counts towards your taxable income though, so you may pay tax on it. HMRC will notify us of the tax code to apply to your pension.

 

General Data Protection Regulation

The General Data Protection Regulation (GDPR) is a set of regulations which came into force on 25 May 2018. Within the UK these regulations make up part of the Data Protection Act 2018. GDPR changed how businesses and organisations, including pension funds, process and handle data (information). The main aim is to simplify data privacy laws, while giving greater protection and rights to individuals. Visit our GDPR page to find out more about GDPR and how we use your information.

 

Receiving your benefits when they are due

As long as you keep your address details up-to-date we will contact you automatically with regard to the payment of your deferred benefits, when they are duePlease inform us in writing or by updating your pension account online with any change(s) of address. If you write to us, please remember to sign your letter.
 
Pensions and Investments Team
Buckinghamshire Council
Walton Street Offices
Walton Street
Aylesbury
HP20 1UD

 

Downloads

The deferred benefit statement cannot cover every personal circumstance and does not cover rights that apply to a limited number of members e.g. those to whom protected rights apply, or those whose rights are subject to a pension sharing order following divorce or dissolution of a civil partnership. In the event of any dispute over your pension benefits the appropriate legislation will prevail. The statement does not confer any contractual or statutory rights and is provided for information purposes only. 

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Last updated: 23 March 2021

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