As people are living longer, and so drawing a pension for longer, the Government proposed changes to all public service pension schemes, including the LGPS, to ensure that:
- There is a fairer balance between what employees pay and the cost to employers and taxpayers, and
- the cost of providing public sector pensions is affordable, not just now but in the decades to come.
What does it mean for existing scheme members?
The changes to the LGPS took effect from 1 April 2014 and the scheme is now called the LGPS 2014.
The LGPS 2014 remains an excellent scheme which will provide you with a guaranteed income in retirement, as well as other valuable benefits.
Importantly, none of the benefits you have already earned will be lost. You will still receive final salary benefits for all the membership you built up prior to the changes being introduced in 2014.
Good reasons to stay in the scheme
We know that money is tight for many scheme members. This combined with uncertainty about scheme changes and increasing contribution rates may make you think about opting out of the scheme. But here are some of the benefits you will have as a member of the LGPS:
- An indexed-linked pension payable for life
- Option to convert pension for tax-free cash on retirement
- Death in service cover of three times your assumed pensionable pay
- Survivor pensions for spouses, civil partners and co-habiting partners payable for their lifetime
- Children’s pensions payable up to an age of 18 or 23 if they continue in full-time education or vocational training
- Ill-health retirement at any age
We have created a suite of factsheets covering a variety of topics relating to the Local Government Pension Scheme. These are available for download, if you have problems accessing any of the factsheets please contact the Cheshire Pension Fund.
Details of the new scheme can also be found in the latest Annual Benefit Statement Newsletter.