Points to Consider Before Opting Out
You might be thinking of opting out of the LGPS for a variety of reasons. Whatever the reason, opting out won’t save you as much in take home pay as you may think. In most cases, you will pay more tax if you opt out of the LGPS.
If you are thinking of opting out you really need to consider that the LGPS is one of the best and most highly valued of occupational pension schemes. Being a member means you can enjoy the benefit of a complete range of secure benefits.
- Index linked pension payable for life
- Tax free lump sum option
- Death in service cover
- Survivors benefits for spouses, civil partners and co-habiting partner
- Children’s’ Benefits
- Ill Health Pension payable at any age
- Early retirement options
- Redundancy benefits paid early if over age 55
What About Going 50/50 Instead?
If you are considering opting out because you feel that the contributions are too expensive, you may wish to consider joining the 50/50 Section of the scheme.
The 50/50 section allows you to pay HALF your normal contributions in return for HALF your normal pension build up.
HOWEVER, the following benefits remain at 100%
- Ill-health benefits
- Death benefits
- Survivors’ benefits
You can choose to opt back in to the 100% section at any time. There is no limit on the number times you can opt between the 50/50 section and main 100% section
Further details of the 50/50 section can be found here – 50/50 Scheme
If you opt-out, you can, provided you are still eligible to join the scheme, opt back into the scheme at any time before age 75.
Cancelling Your Membership
If you decide that you no longer wish to be a member of the LGPS and want to opt out, you can download the opt out form here. When you have completed it you must send it straight to your employer who will arrange to cancel your membership.