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
Annual Pension: (2 x £16,000) ÷ 60 = £533.33
For service built up after 31 March 2014
Taking your deferred benefits
At NPA without reduction
Before normal pension age, but early retirement reductions may apply
Pension reduction if you take your benefits early
How deferred benefits are adjusted against inflation
Contingent spouse's/partner's pension
Deferred benefit death grant
How your pension benefits affect your children if you die
Transferring your pension to another local government fund
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
General Data Protection Regulation
Receiving your benefits when they are due
Walton Street Offices
- Example LGPS deferred benefit statement
- Deferred Members' Newsletter 2020 - important annual update for deferred members of our pension fund
- Deferred Members' Newsletter 2019 - important annual update for deferred members of our pension fund
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.
Last updated: 23 March 2021