Benefits of the LGPS
What are the benefits of the LGPS?
* A guaranteed pension for life
* A tax-free lump sum at retirement
* Death benefits for your family
* Ill-health retirement benefits
* Redundancy retirement benefits from age 55 (age 50 for members as at 6 April 2006)
* Optional retirement from age 55
* Cost of living based pension increases
What kind of scheme is Strathclyde Pension Fund?
Strathclyde Pension Fund is a defined benefit occupational pension scheme.
Employers automatically enrol employees eligible to pay into the scheme.
Once you have met the 2 year membership period, you can be paid an annual pension for life with the option to take up to 25% as a tax free lump sum at retirement.
The LGPS is very secure because the benefits are set out in law.
What is my reference/policy number?
We use your National Insurance number as the unique identifier for each member and you should give this to your new provider if asked for a reference or policy number.
Retirement
When can I retire?
From state pension age (You can check your SPA here) you can retire and receive your benefits with no reductions.
You can take your benefits from age 55.
Your benefits for membership after 31 March 2015 have a normal pension age of your State Pension age.
If you take your benefits before normal pension age, some or all of your benefits will be reduced.
If you meet the Rule of 85 and are over 60 when you retire, reductions will not apply to benefits that have Rule of 85 protection. Check your Rule of 85 status.
If you are interested in flexible retirement, you will need to obtain your employer's permission.
How are my retirement benefits calculated?
From 1 April 2015 you build up a pension of 1/49th of your pay in your Pension Account each year.
Your Pension Account is revalued each year by the Consumer Prices Index up to your date of retirement.
The total pension in your Pension Account is adjusted at your date of retirement if you do not retire at your state pension age (min 65).
Up to 31 March 2015 the LGPS was a final salary pension scheme. This means the payment you get for service up to that date is based on your final year's pensionable pay and your total length of membership.
Up to 31 March 2009 the annual pension payment is worked out by dividing your final pay by 80 and multiplying this by your total membership.
To work out your lump sum for service up to 31 March 2009 divide your final salary by 80, multiply this by your total membership, and then multiply the final figure by 3.
For any service after 31 March 2009 to 31 March 2015, your annual pension will be worked out by dividing your final pay by 60, and you will have the option to take part of this as a lump sum.
What is my Normal Pension Age?
Your benefits are paid in full if you choose to take them from your Normal Pension Age. For benefits built up from April 2015, your Normal Pension Age is linked to your State Pension Age, but is at least age 65.
The Normal Pension Age for benefits built up in the LGPS before 1 April 2015 is protected. For most people, the protected Normal Pension Age for these benefits is 65.
If you were a member of the LGPS at any time between 1 April 1998 and 30 November 2006, some or all of your benefits could be paid in full before age 65 if you are protected by the 85-year rule.
Types of retirement?
The only grounds under which you can retire without your Employer's consent is an age retiral. You must meet the minimum retiral age of 55 years. There is a requirement to also give your Employer at least 3 month's notice of your intention to retire.
However there is many grounds that you can retire under, which are at the discretion of your Employer ie:-
- Redundancy/Efficiency Retirement
- Ill Health Retirement
- Flexible Retirement
A request to retire under the Employer consent retirals, would need to be made directly to your Employer. After which they should contact SPFO for an estimate of benefits, before making a final decision on whether to allow this to proceed.
What happens to my pension if I must retire due to ill health?
Your pension (provided you have 2 years in the LGPS) can be paid early if your employer decides you are permanently unable to perform the duties of your job due to ill health and you are not immediately capable of undertaking other work.
The pension can take account of some or all of your prospective service to your state pension age (min 65) depending on whether you are likely to be capable of working again.
Any enquiries regarding this type of retirement should be directed to your employer in the first instance.
Can I convert pension to lump sum?
Yes, you can elect to take up to 25% of your overall pension pot as a tax free lump sum.
Can I take a lump sum at 55 without taking the rest of my pension?
You cannot release any part of your benefits before retirement, however upon retirement you can elect to take up to 25% of the capital value of your benefits as a tax-free lump sum. The remainder must be paid as an annual pension.
How does Freedom and Choice in pensions affect LGPS members?
Reforms offering greater flexibility, 'Freedom and Choice', in the way that individuals aged 55 and over can access their defined contribution (DC) pensions became effective on 6 April 2015.
As the Local Government Pension Scheme (LGPS) is a public sector defined benefit (DB) scheme, 'Freedom and Choice' does not apply to it.
However, before retiring, members do have the right to transfer their pension rights out of the LGPS to a DC arrangement offering 'flexible benefits'.
As a transfer out of the LGPS is a major financial decision requiring careful consideration and can only be done after taking advice, we suggest that any members contemplating this course of action first read our Freedom and Choice Q&A (PDF, 60 KB) for LGPS members.
I wish to request an estimate of pension benefits
Our online member service, SPFOnline, has a Benefit Projector area which allows you to estimate to a date of your choosing
The Benefit Projector area allows you to estimate:
- Retirement benefits
- Death benefits
- Each projector also shows how much of your pension you can convert to a lump sum at retirement.
- To access your account, just login here.
To sign up to SPFOnline click here and follow the instructions.
Increasing My Benefits
Can I buy more pension?
Additional Pension Contributions (APC's).
APC'S are used to purchase additional pension and the contract can be paid as a regular payment or a one-off lump sum, however there is no option to pay extra to provide dependants benefits. The cost to purchase APC's is determined by how much extra pension you want to buy, the age that you begin paying and the length of time you want to pay them for.
You can calculate and apply for your APC contract here.
Can I pay less into my pension?
As an alternative to opting out, you can opt to join the 50/50 section of the scheme. If you elect to join the 50/50 section, your contribution rate will half and whilst you are in this section 1/98th of your actual pay will be entered into your pension account.
You can elect to join the 50/50 section at any time; an application should be made in writing to your employer with the election form.
However, the 50/50 section is designed to be a short-term option and your employer is required to re-enrol you back into the main section of the scheme every three years. This will be carried out in line with your employer's automatic re-enrolment date, and they will inform you when this date is.
Can I opt out of the pension scheme?
You can opt out of the LGPS at any time by providing your employer with the opt out form that is available from the Publications > Members > Forms area of our website.
It is important to read the For your future leaflet and to seek advice before opting out of the LGPS.
If you do opt out of the LGPS and are entitled to a refund, your employer will usually pay this to you if you have been in the LGPS for less than 3 months.
If you do opt out of the LGPS with more than 3 months pensionable service but less than 2 years pensionable service and are entitled to a refund, your employer will pass us your request for a refund. Your refund will take account of any tax and national insurance (up to tax year 2015 / 2016) relief you have received. By law we cannot pay a refund within one month of you opting out.
Can I pay Additional Voluntary Contributions?
Additional Voluntary Contributions (AVCs)
These are the more flexible option as you can start and stop the contract at any time. They are provided by Prudential, our In-House AVC provider and you can elect how much you wish to contribute and how you want these contributions to be invested.
AVC's are deducted from Gross pay so the same tax relief is applied. A portion of these can be used to purchase tax free lump sum, up to the relevant allowances, which makes them a tax efficient means of saving for retirement.
Further information, and how to apply for an AVC is detailed on Prudential's website here.
Transfers
Am I able to transfer in service from a previous employer?
If you have previous LGPS rights, it is very important that you contact us, as there are LGPS rules that we have to apply if you do not provide us with any instructions and applying these rules may not be to your advantage (PDF, 121 KB).
You will be able to transfer pension rights into the LGPS from any other public sector scheme provided you make an application within 12 months of joining.
If you have more than 12 months but less than 24 months of scheme membership you will require your employer's consent for a transfer to be accepted.
Transfer applications made outwith 24 months of joining will not be accepted.
Can I transfer my pension to another provider?
You can transfer your pension to any other pension scheme if the new scheme is one approved by HMRC and willing to accept the transfer. If you want to transfer your pension you should tell your new scheme that you hold benefits with us. They will approach us for a transfer value and let you know what the benefits are worth in their scheme. Your new employer or pension scheme will then work with you regarding whether or not you wish to go ahead with the transfer. If you decide that you want to go ahead with the transfer they will ask us to pay the transfer payment over to your new pension scheme. We'll make payment when you return the forms from you and other scheme have been completed and returned along with any certificates requested.
Deciding to transfer your benefits is an important decision. You may wish to take independent financial advice. For transfers over £30,000 you will need to obtain independent, impartial financial advice before being able to transfer to certain types of pension scheme. You can find details on independent financial advice on Unbiased.co.uk, but make sure they understand the LGPS.
Amending Personal Details
Change of address
Login to SPFOnline, when in your dashboard address details can be updated on the section 'Your Personal Details' by selecting edit.
If you are an active member of the scheme, please notify your employer of any changes to personal details as they provide details on a monthly basis which can overwrite changes you make.
Marital Status
Login to SPFOnline,, where you can upload a copy of the relevant certificate by navigating to your dashboard > Your documents > Document Upload.
Once your certificate has been uploaded to our system, your details will be amended accordingly.
Nomination
Login to SPFOnline and select 'Your Nominations' from your dashboard area. You can then select edit to update your nomination details.
Alternatively, you can complete a Nomination Form that can be found here.
Pension Updates
Where can I find my pension update?
Your annual update will be available by logging into SPFOnline, go to 'Your Documents' section of your dashboard.
My pension update does not show a lump sum amount?
Only members who joined the scheme prior to 01/04/2009 receive an automatic lump sum.
Are pension debits deducted on my statement?
Pension debits are not shown in the yearly pension quoted on your statement. The current value of any debits are calculated in the 'How we have calculated your benefits' area of your statement.
Are my Additional Voluntary Contributions (AVCs) shown on my statement?
No, your pension update does not show your Additional Voluntary Contributions (AVCs).
Why is my pension earned not the same as the pension contribution I pay?
You and your employer's contributions do not determine your pension entitlement. Your pension benefits are calculated on a Career Average basis, at the end of each scheme year, 1/49th of your actual pay is entered into your pension account. This amount is then increased with inflation and added to the next year's amount.
If you require a breakdown of employee/employer contributions, please contact your employing authority directly.
State Pension
What is my State Pension Age?
You can check your SPA age Here.
Who pays my State Pension?
The Government pays your State Pension. Details of your state pension can be found here.
Fundnews
Where can I find Fundnews?
Fundnews can be found in the publications area of our website here.
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