15. Preserved/deferred scheme members
If you leave your job before retirement and have met the 2 years vesting period you will have built up an entitlement to a pension. You have two options in relation to that pension entitlement:
- You can choose to keep your benefits in the LGPS. These deferred benefits will be adjusted every year in line with the cost of living, or
- You may be able to transfer your deferred benefits to another pension arrangement.
If you leave your job before retirement and have not met the 2 years vesting period you will have three options:
- You can claim a refund of your contributions, less a deduction for tax and the cost, if any, of buying you back into the State Second Pension (S2P). Interest is paid if the refund is not made within one year of leaving. Note: no refund can be made if you rejoin the scheme in England or Wales within a month and a day of leaving, or rejoin before the refund has been paid.
- You may be able to transfer your benefits to a new pension arrangement (providing you have been a member of the LGPS for at least 3 months).
- You can delay your decision until you either re-join the LGPS, transfer your benefits to a new pension arrangement, or want to take a refund of contributions. Where you delay your decision you will have a "deferred refund" pension account. Note: the account can only be held in our Pension Fund for up to 5 years or until age 75, whichever is earlier. If you have not transferred your benefits to a new pension arrangement or rejoined the LGPS by that time a refund of contributions is payable to you.
If you are unsure, please contact us to confirm what type of benefits we hold for you.
If you defer your benefits, the amount in your active pension account up to your date of leaving is transferred to a deferred pension account (deferred benefits). The value of the pension in your deferred pension account is held in our Fund until you decide to transfer the value to another pension scheme, or the deferred benefits are due to be paid.
Your deferred benefits consist of an annual pension, payable throughout your retirement. At retirement you have the option to exchange some pension for a one off tax-free lump sum. It also includes life cover and financial protection for your family.
We calculate your deferred benefits as follows:
In respect of LGPS membership built up after 31 March 2014
Your deferred pension is the value of the pension you have built up in your active pension account by your leaving date. We transfer that pension value from your active pension account to your deferred pension account. When you draw your deferred benefits you can exchange some of your annual pension for a one off tax-free lump sum. You receive £12 lump sum for each £1 of annual pension given up. You can take up to 25% of the capital value of your pension benefits as a lump sum.
In respect of any LGPS membership you have between 1 April 2008 and 31 March 2014
We work out this part of your deferred pension by dividing any period of membership between those dates by 60 and multiplying the resulting figure by your final pay at leaving. When you draw your deferred benefits you can exchange some of your annual pension for a one off tax-free lump sum. You receive £12 lump sum for each £1 of annual pension given up. You can take up to 25% of the capital value of your pension benefits as a lump sum.
In respect of any LGPS membership you have before 1 April 2008
We work out this part of your deferred pension by dividing any period of membership before that date by 80 and multiplying the resulting figure by your final pay at leaving. You will also receive an automatic tax-free lump sum of three times your pension for membership before 1 April 2008. You can exchange part of the pre April 2008 pension for extra lump sum as described above.
Annual benefit statements
We provide you with details of the value of your deferred benefits when you leave. Each year we produce an online annual statement of your deferred benefits so you can see how the value changes each year. Log on to My pension online to check your deferred benefit statement. We no longer send these statements by post.
If you would like to request early payment of your deferred benefits based on your previous employment with us, from 1 April 2020, you must make your application to the HR team at the new Buckinghamshire Council.
Last updated: 23 March 2021