What if I change my mind?
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 scheme. The 50/50 scheme allows you to pay half your normal contributions in return for half your normal pension build up and, the following benefits remain at 100%:
- Ill-health benefits
- Death benefits
- Survivors’ benefits
You can choose to opt back in to the main scheme at any time. There is no limit on the number of times you can opt between the 50/50 scheme and main scheme. Further details of the 50/50 scheme can be found here.
If you no longer wish to contribute to the LGPS, you can opt out but will be automatically re-enrolled as and when required under your employers’ auto enrolment responsibilities, although you can then choose to opt out again.
You can opt out of the LGPS at any time but you must have already started that job to do so.
If you opt out you can, provided you are still eligible to join, opt back into the scheme at any time before age 75.
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 a complete range of secure benefits including:
- 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
If you do wish to opt out please complete the following form I wish to opt out and return to your employer.
Opting out before 3 months
If you opt out of the LGPS before completing 3 months’ membership you will be treated as never having been a member and your employer will refund to you, through your pay, any contributions you have paid during that time.
Opting out with three or more months' membership and before the 2 year vesting period
If you opt out of the LGPS when you have been a member for 3 months or more but you have not completed the 2 year qualifying period (known as the vesting period) – you can take a refund of your contributions (less any statutory deductions) or transfer your pension to another qualifying pension scheme. If you were in the scheme before 1 April 2014 and opt out on or after that date with 3 or more months’ membership and before completing the 2 years vesting period you will also have the option of having deferred benefits in the scheme instead of taking a refund of your contributions (less any statutory deductions).
Opting out after meeting the 2 year vesting period
If you opt out after meeting the 2 year vesting period you will have deferred benefits in the scheme and will generally have the same options as anyone leaving their job before retirement, except you cannot draw your deferred benefits unless you have left your job. Also, if you re-join the scheme, you will not be permitted to join the two periods of membership together. Instead, you will have two separate sets of pension benefits in the scheme.
Please be advised you will not be entitled to a refund of your pension contributions if you:
- have been a member of the LGPS in England and Wales for two years (this includes previous membership with the Cheshire Pension Fund or other LGPS funds)
- transferred a pension into the LGPS from a different occupational pension scheme or from a European pensions institution and the length of service you had in that scheme plus your period of LGPS membership is more than two years
- have transferred pension rights into the LGPS from a pension scheme or arrangement in which you were not allowed to have a refund of contributions
- have previously transferred pension rights out of the LGPS to a pension scheme abroad – to a qualifying recognised overseas pension scheme
- already hold a deferred benefit or you are receiving a pension from the LGPS in England and Wales, other than a survivor’s pension or a pension credit member’s pension
- paid National Insurance contributions as a member of the LGPS and you stop paying into the LGPS in the tax year that you attain State Pension age
- Reach age 75 as an active member of the scheme