My pension
Scheme guide
The Cheshire Pension Fund is part of the National Local Government Pension Scheme (LGPS). The LGPS is administered locally by about 100 local authorities on behalf of thousands of local councils and associated bodies across the UK.
The LGPS is a secure, flexible and tax efficient way of making sure you have a decent pension to look forward to in retirement.
The LGPS is provided by your employer who pay a large part of the cost for providing the excellent range of benefits. It is a valuable part of the pay and reward package for employees working in local government or working for other employers participating in the scheme.
The LGPS provides:
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Tax relief on your contributions, with option for tax free cash on retirement.
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A secure future retirement income, independent of share prices and stock market fluctuations.
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Your family enjoys financial security, with immediate life cover and a pension for your spouse, civil partner or eligible cohabiting partner and eligible children in the event of your death.
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Freedom to choose when to retire; you can retire at any age between 55 and 75. If you do choose to take your pension before your normal pension age it will normally be reduced, as it’s being paid earlier.
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Cover in the event of your early retirement on the grounds of permanent ill-health, redundancy or business efficiency.
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If these things are of value to you, it’s worth considering paying into the LGPS. As a member of the LGPS you have the security of these benefits at a relatively low cost.
For more information the following guides have been taken from the LGPS Regulations & Guidance website.
Secure benefits
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The fund provides you with a guaranteed future income. Unlike some schemes your pension is not affected by share prices and stock market fluctuations.
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Once you take your pension it will go up in line with inflation, protecting you from rising prices.
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At a low cost
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Your employer pays significant amounts of money into the fund.
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You can get tax relief on your contributions – including extra amounts you pay to top up your benefits.
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You can take a lump sum when you retire, which in most cases will be tax free.
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There are no hidden fees or charges – you simply pay a percentage of your pay.
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Benefits for you and your loved ones
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Protection for you in case you have to take your benefits early through ill health.
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Pensions for surviving dependents if you die.
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Life cover of three years pay – from the moment you join.
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If you are not already a member and you want to join please complete the following form I wish to Join/ Rejoin and return to your employer.
How is my pension calculated?
Whether you’ve been in the Local Government Pension Scheme (LGPS) for just a short time or for a number of years, understanding how we work out your pension can be complicated.
Changes to the LGPS in 2008 and 2014 mean that if you joined the scheme before 2008, you’ll have membership under 3 different sets of rules.
When you draw your pension, our job is to make sure that you get the right amount based on when you’ve been a member of the scheme.
We break down your membership into three different blocks. Your pension for each period is worked out using different rules.
Benefits built up from 1 April 2014 are calculated on an annual basis and added to your pension account. Each pension year runs from 1 April to 31 March.
The benefits are calculated as follows:
Annual Pension = Actual salary / 49
When the pension is calculated at 31 March, it is stored in your pension account and revalued every year in line with inflation. You will then start a new pension year which will be calculated based on the pay you receive up to the following 31 March.
At retirement all the yearly pensions you have accrued (including the pensions increase) are added together and paid to you as a pension, which continues to increase in line with inflation for as long as it is payable.
Benefits built up from 1 April 2008 consist of an annual pension with no automatic lump sum and are built up as follows:
Annual Pension = Final Pensionable Pay x Scheme Membership / 60
Benefits built up before 1 April 2008 are calculated as follows:
Annual Pension = Final Pensionable Pay x Scheme Membership / 80
Plus a lump sum equal to three times the annual pension.
This ensures that all benefits earned in the old scheme will maintain their value in the new scheme.
Combining my local government pensions
In the Local Government Pension Scheme (LGPS) you have a separate pension membership record for each job role in which you made contributions to the scheme.
When you stop contributing to the scheme in a job role, your pension record becomes deferred i.e. frozen in the scheme.
If you continue paying into the Cheshire Pension Fund on another job role or re-join the scheme in a separate role, we will automatically investigate combining your deferred record(s) with your ongoing membership record. Once this is completed we will write out with further information and your options.
If you left the scheme after 31 March 2014 then the combining of your records will be automatic unless you elect to retain separate benefits.
If you left the scheme before 1 April 2014 then you will need to make an election to combine your records.
The regulations mean there are different rules regarding combining pensions depending on when you paid into the scheme. It is important to inform us of any LGPS membership you hold in other funds as this may change your options.
If you hold final salary membership (up to 31/03/2014) and have less than five years break between your periods of service, you will be able to keep the final salary link when combining records. The final salary pension benefits will be calculated using the salary in your new job instead, therefore, it may not always be beneficial to combine membership records. You should seek independent financial advice if you are unsure what to do.
You have 12 months from the date of the option letter to decide; once you have made an election, or the time limit has expired, the options will no longer be available.
If your current employer’s discretions policy allows, and they think there is a good reason to do so, they can extend the 12-month time limit for deciding whether to link your membership records, however the extension cannot go beyond the day that your job ends. You should check with your current employer what their policy on this is.
If you have opted out of the scheme on your previous membership record on or after 11 April 2015 and you hold more than two years membership within the scheme, the regulations state that you would not be allowed to combine the benefits.
Refunds
To qualify for pension benefits in the LGPS you must meet a minimum period of scheme membership, known as the vesting period. If you leave your employment and do not have enough membership to qualify for pension benefits, the options available to you depend on:
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how long you have been a scheme member,
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when you were a scheme member, and
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whether or not you transferred membership when you joined.
If you leave the Scheme and have not qualified for a pension benefit in the LGPS, you may be able to choose to receive a refund of the contributions you have paid (less the statutory deductions) provided that:
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You do not start working for another Local Government Employer within 1 month and 1 day of your leaving date.
Please note the Cheshire Pension Fund would have to deduct tax and an amount equivalent to the National Insurance you would have paid (to repay on your behalf) if you had not been a member of the scheme.
The vesting period
The vesting period refers to the period of time that you must be an active member of the LGPS before becoming entitled to benefits under the scheme. Since 1 April 2014, the vesting period in the LGPS is 2 years however, it can be met before 2 years in certain circumstances. You will meet the 2-year vesting period if any of the following conditions apply:
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You have been a member of the LGPS in England and Wales for 2 years
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You transferred a pension into the LGPS from a different occupational pension scheme or from a European pension institution and the length of service you had in that scheme or institution was 2 or more years or, when added to the period of time you have been a member of the LGPS the period is in total more than 2 years
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You have brought a transfer of pension rights into the LGPS in England or Wales from a pension scheme or arrangement where you were not allowed to receive a refund of contributions
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You have previously transferred pension rights out of the LGPS in England or Wales to a pension scheme abroad (i.e. to a qualifying recognised overseas pension scheme)
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You already hold a deferred benefit or are receiving a pension from the LGPS in England or Wales (other than a survivor’s pension or pension credit member’s pension
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You have paid National Insurance contributions whilst a member of the LGPS and you stop paying into the LGPS in the tax year of attaining pension age
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You cease to contribute to the LGPS at age 75
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You die in service
Please note, the vesting period has changed on multiple occasions and, depending on when you contributed to the LGPS, the qualifying period could be different.
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If you joined the scheme before 1 April 2014, left with less than the 2 years vesting period but have more than 3 months membership you can:
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Take a refund of your pension contributions (as long as you meet the criteria above and have elected to receive the refund within 6 months of leaving)
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Have a deferred pension which increases in line with inflation until payment; or
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Transfer your pension benefits to another scheme.
If you joined the scheme after 31 March 2014, left with less than the 2 years vesting period you can:
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Take a refund of your pension contributions, or
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Transfer your pension benefits to another scheme.
Please note that the above options are based on you not having met the criteria needed to vest in the LGPS across all LGPS funds.
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Transferring out
You may be able to transfer your benefits to a different pension scheme if you have left the Local Government Pension Scheme (LGPS) and your new employer or pension provider is willing to accept the transfer value.
You should check that your new pension provider will accept transfers and that you are within any time limits they may apply before you request a transfer out of the Cheshire Pension Fund.
In order to transfer your pension benefits you must:
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be more than 12 months away from your normal pension age and the age when any guaranteed minimum pension (GMP) you are entitled to is payable (if you have a GMP this is payable at age 60 for women and age 65 for men)
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be transferring your benefits to an His Majesty’s Revenue and Customs (HMRC) registered pension scheme.
and must not:
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be paying into the LGPS with either Cheshire Pension Fund or any other LGPS fund
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be receiving a pension from the LGPS (other than a survivor’s pension, or a pension obtained from a pension credit following a divorce or dissolution of a marriage or civil partnership)
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be retiring immediately due to redundancy, business efficiency or ill health
Please note: if you have more than one set of benefits within the LGPS in England and Wales then you will need to transfer all of them or none of them to your new chosen scheme. This applies even if the pension benefits are held by different LGPS funds.
The only exception to this is a pension credit awarded following a pension sharing order from a divorce or dissolution of a marriage or partnership, these pensions can be transferred independently of your main scheme benefits.
If you decide that you wish to investigate a transfer of your LGPS benefits to another pension scheme we will need to follow a standard process to make sure appropriate safeguarding checks are carried out and there is a range of information you will need to read to make sure that you are making an informed decision.
The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 sets out conditions that all funds must assess transfer requests against in order to protect members against scams and details of these checks can be found here
To begin the process of transferring your pension benefits please see Transfer Check below, read the information provided and complete the questionnaire.
What do I need to do now I have my transfer quotation from you?
You should send a copy of the calculation to your new scheme and then compare the benefits provided by both schemes before you make a decision to transfer. Cheshire Pension Fund staff are not legally allowed to give financial advice. You may wish to obtain independent financial advice before you make a decision to transfer your benefits out of the LGPS, as this decision could affect your future pension benefits.
Do I need to get independent financial advice?
Making the decision of whether transferring your pension rights is the best thing for you can be difficult and involve a lot of different factors.
If you are considering a transfer to a defined contribution scheme that offers flexible retirement benefits, you must receive financial advice if the transfer value is £30,000 or more. You may still wish to get the help of a financial adviser even if the value of your benefits is below £30,000.
We always recommend that you consider getting help from a financial adviser. For help choosing a financial adviser, visit the Money Helper website: Choosing a financial adviser
The adviser must have permission for the activity of ‘advising on pension transfers and pension opt-outs'.
Due to the investment risks of some schemes, it is particularly important to obtain financial advice if you are looking to transfer to:
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A personal pension plan.
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A stakeholder pension scheme.
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A buy-out insurance policy.
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A money purchase scheme.
Are there any circumstances where I would not be able to transfer my pension?
There are certain circumstances, referred to as red and amber flags, which mean that a statutory transfer cannot proceed, or where we need to ask for more information from you before the transfer may proceed. You may also be required to attend a guidance session with MoneyHelper before the transfer can proceed if we have concerns that the transfer is a possible scam.
Additionally, if you do not meet the conditions that state you must:
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be more than 12 months away from your normal pension age and the age when any guaranteed minimum pension (GMP) you are entitled to is payable (if you have a GMP this is payable at age 60 for women and age 65 for men)
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be transferring your benefits to an His Majesty’s Revenue and Customs (HMRC) registered pension scheme.
and must not:
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be paying into the LGPS with either Cheshire Pension Fund or any other LGPS fund
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be receiving a pension from the LGPS (other than a survivor’s pension, or a pension obtained from a pension credit following a divorce or dissolution of a marriage or civil partnership)
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be retiring immediately due to redundancy, business efficiency or ill health
you would be unable to transfer.
What is Freedom and Choice?
The Government announced changes in the 2014 Budget that reforms to workplace pensions would be made to offer greater flexibility in the way individuals aged 55 and over can access any Defined Contribution (DC) pension savings they may have. These changes became effective on 6 April 2015.
It’s important that as a member of the Local Government Pension Scheme (LGPS) you understand that you are a member of a public sector Defined Benefit (DB) scheme and therefore the flexibilities being introduced under ‘Freedom and Choice’ do not impact on how you can take your Defined Benefits from the LGPS.
There are however, some indirect changes which will impact upon any members of the LGPS who are considering transferring the value of their accrued LGPS Defined Benefit pension rights from the LGPS to a DC arrangement offering flexible benefits.
The Cheshire Pension Fund have produced the following factsheet: Freedom and choice and the LGPS have produced Freedom and Choice questions and answers to help you understand the changes.
Can someone request a CETV on my behalf?
If a third party is requesting a CETV on your behalf their request must have your written authority enclosed. Your authority must state your full name, national insurance number and signature. Your authority must also have the name of the Cheshire Pension Fund clearly written on it.
A quotation will be issued to you once we have all the relevant documentation to provide a quotation. The quote will be guaranteed for a period of three months from the date on which it was calculated. A written option to proceed with the guaranteed transfer value must be received within the three-month guaranteed period in order for the original transfer value to stand.
What if I don’t have another scheme to transfer to?
Your LGPS benefits will remain in the Cheshire Pension Fund and these benefits will enjoy cost of living increases. If you join another pension scheme at a later date you can request another transfer quotation. Members are entitled to 1 guaranteed transfer quote within any 12-month period.
What will happen if I do not wish to transfer my previous pension from Cheshire Pension Fund?
If you decide not to continue with the transfer, your deferred LGPS benefits will remain in the Cheshire Pension Fund and these benefits will enjoy cost of living increases. Please indicate your decision on the option form we send to you with your quotation and return it to us.
What will happen if my option form and my new scheme’s form are not returned to the Cheshire Pension Fund?
Your transfer cannot proceed without the completion and return of these forms to the Cheshire Pension Fund.
Is there a time limit on returning the relevant option and authorisation forms?
Yes. A transfer valuation quote is guaranteed for three months. If we haven’t received the completed forms within the timescale we will close our files and will notify you in writing that we have taken this action.
If I decide to transfer will I be entitled to any further benefits from the Cheshire Pension Fund?
If a transfer payment is made you won’t be entitled to any further benefits from the Cheshire Pension Fund for yourself, your spouse, civil partner or any benefits for your dependants.
I am still contributing to the scheme, can I transfer?
Only members who have left the pension scheme can transfer their accrued benefits from the scheme. If you want to investigate this option, you should obtain independent financial advice before you make the decision to opt out of the scheme.
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Transfer Check
Transfer Conditions
For us to proceed with your transfer request, we require evidence that you have read the following information.
For anyone transferring their pension benefits out of the Cheshire Pension Fund, we must assess their application against the two conditions set out in The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 as follows:
First condition: Is the receiving scheme one of those listed in the transfer regulations set out below?
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a public service pension scheme (schemes created for civil servants, armed forces, health service workers, teachers, judiciary, police, firefighters, and local government workers)
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an authorised master trust which you can find on The Pension Regulator website: List of authorised master trusts | The Pensions Regulator
Second condition: If you do not meet the first condition you may be able to provide evidence or information which will demonstrate:
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an employment link if you are transferring to an occupational scheme, or
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either the employment link or the residency link if you are transferring to an occupational qualifying recognised overseas pension scheme (QROPS), or the residency link where it is not, and
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any other evidence or information that we consider relevant to the transfer.
If you do not meet either of the above requirements it may still be possible for you to transfer your pension benefits to another provider, but the Fund is required to carry out further checks to assess the risk to you.
The Pensions Regulator has updated its guidance on Pensions Liberation. A large number of Companies are singling out pension savers and claiming that they can help them access their pension cash early.
With demand for early access to pension savings on the increase, there is clear evidence that more members of the public are being duped into transferring their funds to rogue pension arrangements.
Pension liberation, also known as ‘pension loans’ and ‘pension scams’, is the transfer of a member’s pension savings to an arrangement that will allow them to access their funds before they are entitled to receive them. This activity can be fraudulent where members are not informed, or are misled, about the consequences of these schemes and can result in a massive tax charge to the unsuspecting member.
To help you, The Pensions Regulator has updated its guidance to include a booklet and a video on the dangers of Pension Liberation and how to spot some of the warning signs.
How to avoid pension Scams
Please read the documents below and then complete the simple questionnaire below.
Please note if you require a cash equivalent transfer value for divorce proceedings please use the online form: Request CETV for divorce proceedings
Annual benefit statement – No longer paying in (deferred)
Welcome to the Annual Benefit Statement (ABS) page for Deferred Members.
Here you will find information about your statement, which is sent to all eligible members by the end of August each year.
The ABS is our principle means of communication with our Deferred members and provides you with vital information about your LGPS pension, with the Cheshire Pension Fund.
Your ABS is a key document that allows you to make informed decisions, and plan for your retirement. It contains information such as your accrued pension to date, who your Death Grant Nomination is or are, and personal information such as marital status and your address.
Your ABS is currently posted to your home address, it is therefore essential that you inform us, using an online form, if you change your address. Alternatively you can use our brand new Pension Portal, My Cheshire Pension, to change your address.
Please note: From 2025 onwards, we will be providing your ABS online, through our pension portal, My Cheshire Pension. If you wish to opt out of receiving your ABS electronically, please email us at paperpensions@cheshirewestandchester.gov.uk including your: Full name, Date of Birth, National Insurance number, and your Address.
You can find out more about our pensions portal, My Cheshire Pension – visit the My Cheshire Pensions page
If you have Additional Voluntary Contributions (AVCs), they are not shown on the Cheshire Pension Fund ABS as your AVC provider sends a separate statement annually.
Useful documents
Frequently asked questions
An ABS is a statement which provides information on your LGPS pension, in this case, your Cheshire Pension Fund Pension.
It provides you with details of your accrued pension to date, who your Death Grant Nomination(s) are, and helps you to plan and think about what you need to do for retirement.
Your ABS provides you with details about how much pension you have accrued to date. It allows you to think about what you need for your retirement, whether that is next year, 10, 20 or even 40 years away. It’s never too soon to start thinking about the type of lifestyle you’d like to lead, when you retire.
Check the details on the statement are correct. For example, your address and personal details, are they up to date? Is your death grant nomination correct? Ensure that these are all correct.
You can also start to build a picture of what your retirement will be like, based on your pension income, if it’s not what you would like, you can start to plan now for how you can increase this amount.
As a Defined Benefit scheme, your LGPS pension is calculated based on your salary and how long you’ve paid in. The annual pension is not a one-off amount. It will be paid to you each year in retirement for the rest of your life. Currently the average length that a pension is paid, is 20 years.
Your contributions, your employer’s contributions and money made from investments the Fund makes on your behalf are used to fund the pension benefits paid to you at retirement.
No. If you pay AVCs you will receive a separate statement from your chosen in-house AVC provider.
Yes, any APCs, added years or additional regular contributions (ARCs) purchased up to the point you left the scheme are included in the total pension value detailed on your statement.
