In this section
Work events
Absences from work
To make an election to buy back lost pension you will need to:
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Know the amount of pay you lost due to absence. Your employer should provide this figure.
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Decide how long you wish to pay over, or whether this will be by a one off lump sum.
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Get a quote from the LGPS modeller using the ‘Buy lost pension’ option.
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Print off 1 copy of the application form and return to your employer, this must be received within 30 days of your return to work. It is advisable to check that the application has been actioned by your employer.
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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.
Explanations of the different types of leave and whether or not you can purchase back the lost pension are listed below.
If you are off work due to sickness or injury and your contractual pay is reduced or you don’t receive any pay, then the pensionable pay figure used to work out your pension for this period is your assumed pensionable pay. Using your assumed pensionable pay rather than the amount of pensionable pay you actually receive whilst on sick leave means that you will continue to build up a pension in LGPS scheme you are in, as if you were working normally and receiving pay.
You will continue to pay your basic LGPS contributions on any pay that you receive while you are off sick (before any reduction on account of Statutory Sick Pay or Incapacity Benefit). If you are on unpaid sick leave you will not pay any contributions.
If you are in the 50/50 scheme and go onto unpaid sick leave, you will automatically be moved to the main scheme from the beginning of the next pay period if you are still on no pay at that time. This means from that point forward you will build up full pension benefits in the LGPS even though you are not paying pension contributions.
If you are granted unpaid leave of absence, including jury service and parental leave, the period will not count for pension purposes unless you elect to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost during that period of absence. The amount of pension lost is calculated as the appropriate fraction of your assumed pensionable pay for that period of absence i.e. 1/49th of your assumed pensionable pay if you were in the main scheme or 1/98th if you were in the 50/50 scheme.
If you wish to purchase the amount of lost pension and make the election within 30 days of returning to work then the cost of the APC is split between you and your employer. You will pay one-third of the cost and your employer will pay the rest. This is known as a Shared Cost Additional Pension Contributions (SCAPC).
You can pay these additional contributions in a one-off lump sum or through regular payments from your wages.
The maximum period of absence you can elect to buy back by a SCAPC is a period of 3 years.
If you are absent for a day or more due to a trade dispute the period will not count for pension purposes unless you elect to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost during that period of absence. The amount of pension lost is calculated as the appropriate fraction of your assumed pensionable pay for that period of absence i.e. 1/49th of your assumed pensionable pay if you were in the main scheme or 1/98th if you were in the 50/50 scheme.
The cost of purchasing the amount of lost pension for the period of absence would be met fully by you. Your employer does not make a contribution to the APC. If you have membership of the LGPS before 1 April 2014 you will have built up benefits in the final salary scheme. If you choose to pay for the lost pension in the scheme the amount you pay will go towards covering the protections associated with the pre 1 April 2014 membership.
During any period of relevant child related leave the pensionable pay figure used to work out your pension is your assumed pensionable pay. Using your assumed pensionable pay rather than the amount of pensionable pay you actually receive when on relevant child related leave means that you will continue to build up a pension in the LGPS scheme you are in, as if you were working normally and receiving pay.
You will continue to pay your basic LGPS contributions on any pay that you receive while you are off on relevant child related leave.
However, any period of unpaid additional maternity, paternity or adoption leave will not count for pension purposes unless you elect to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost during that period of unpaid absence.
The amount of pension lost is calculated as the appropriate fraction of your assumed pensionable pay for that period of absence i.e. 1/49th of your assumed pensionable pay if you were in the main scheme or 1/98th if you were in the 50/50 scheme.
If you wish to purchase the amount of lost pension and make the election within 30 days of returning to work then the cost of the APC is split between you and your employer. You will pay one-third of the cost and your employer will pay the rest. This is known as a Shared Cost Additional Pension Contract (SCAPC). You can pay these additional contributions in a one-off lump sum or through regular payments from your wages.
The maximum period of absence you can elect to buy back by a SCAPC is a period of 3 years.
If you have membership of the LGPS before 1 April 2014 you will have built up benefits in the final salary scheme. If you choose to pay for the lost pension in the scheme the amount you pay will go towards covering the protections associated with the pre 1 April 2014 membership.
If you have Keep in Touch (KIT) days during a period of unpaid additional maternity, paternity or adoption leave, you will build up a pension based on the scheme you are in for the days you are paid.
You can with your employer’s agreement, take unpaid parental leave. If you want this period to count as a period of membership in the LGPS you will have to pay Additional Pension Contributions (APCs) as with authorised leave (unpaid).
If you are on reserve forces service leave and elect to remain in the LGPS your pension in the scheme will be calculated using your assumed pensionable pay. Using your assumed pensionable pay ensures that you will continue to build up a pension as if you were in work rather than on reserve forces service leave. Any pay you do receive from your employer will not have pension contributions deducted from it.
If you go on reserve forces service leave and elect to stay in the LGPS your employer needs to advise you on the amount of basic pension contributions you and the Ministry of Defence (MoD) must pay, the amount of any additional contributions you are paying in the LGPS and, the amount of assumed pensionable pay those contributions must be collected on. You will need to pass this information on to the MoD.
Your employee contributions (and any additional contributions you are paying in the LGPS) will be deducted by the MoD and paid across to the Cheshire Pension Fund who are administered by Cheshire West and Chester Council, alongside the contributions made by the employer.
You will not accrue any pension rights whilst you are on jury service. You will have the option to purchase Additional Pension Contributions (APCs) to make up any shortfall as with authorised leave (unpaid).
Combining Membership
Combining previous Cheshire Pension Fund pensions.
You can combine your new pension with a previous pension you may have built up with the Cheshire Pension Fund.
If you left a job with an employer who offered you a pension with the Cheshire Pension Fund and have now started another job, either with the same or different employer who also offers access to the Cheshire Pension Fund, then you can combine the benefits that are on hold with your new pension.
We will send information to you about combining your benefits once we have received the request form from you. You will need to consider whether you want to transfer and let us know if you do not wish to combine them by the response date given in the letter. Otherwise, we will automatically combine them for you.
If we don’t receive your completed new member declaration form, and we know you have other LGPS benefits (with the Cheshire Pension Fund or elsewhere) we will combine the accounts.
Leave before retirement age
If you leave your current employer you have several options on what to do with your accrued scheme benefits. The options depend on how long you have been a scheme member, and whether or not you transferred membership when you joined the scheme.
If you leave the scheme and have been a member for less than the 2 year vesting period, you can choose to receive a refund of the contributions you have paid (net of 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 will 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.
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:-
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.
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. 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 pensions 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
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If you have been a member for more than 3 months your benefits can be transferred out of the Cheshire Pension Fund at any time after you leave providing that 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.
If you have less than two years membership at the date you leave and after one year you decide not to transfer your benefits, you will receive a refund of your contributions (plus interest).
The Government announced 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 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 that will impact 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 LGPS have produced Freedom and Choice questions and answers to help you understand the changes.
Once you have 2 years of membership in the Scheme (or less if you have transferred previous pension rights in), your benefits will be deferred in the Cheshire Pension Fund until you reach your normal retirement age. During the time your benefits are deferred in the Fund, they will be revalued in line with the Consumer Price Index (CPI) each year from the date you leave.
If you joined the scheme before 1 April 2014 you may also choose to take a refund or transfer
your benefits. You can only take these additional options if:
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You left the scheme after 1 April 2014
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You have more than 3 months membership, but less than 2 years membership
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For more information on opting out of the LGPS click here
