How much does it cost?

The contribution rate you pay ranges from 5.5% to 12.5% depending on the actual pay you receive that is pensionable.

Your pensionable pay includes all overtime not just contractual overtime and if you work part-time, it is based on your actual pay received not your full-time equivalent pay.

 Band Actual pensionable pay for an employment  Contribution rate for that employment   
    Main section 50/50 section
1 Up to £14,400 5.5% 2.75%
2 £14,401 to £22,500 5.8% 2.9%
3 £22,501 to £35,500 6.5% 3.25%
4 £36,501 to £46,200 6.8% 3.4%
5 £46,201 to £64,600 8.5% 4.25%
6 £64,601 to £91,500 9.9% 4.95%
7 £91,501 to £107,700 10.5% 5.25%
8 £107,701 to £161,500 11.4% 5.7%
9 £107,701 to £161,500 12.5% 6.25%

Who decides the rate of contribution I pay?

Your employer will decide your contribution rate when you join and at least every April thereafter. If your pay alters part way through a year, your employer can also decide to adjust your contribution rate at the same time.  If you have any queries about the contribution rate you are currently paying, you should contact your payroll section.

Does my employer contribute to my pension?

Yes, your employer pays the remaining cost of providing your benefits in the scheme after taking into account investment returns.

The actual amount each employer needs to pay to cover all the costs for their members is assessed every three years by an independent actuary.

The amount will vary, but the assumption is that you contribute approximately one third of the costs and your employer contributes the remainder.

Will I receive tax relief on my contributions to the LGPS?

Yes.  As a member of the LGPS, your contributions receive tax relief by deducting your contributions from your pensionable pay before any tax is calculated. For most people this is a saving of 20% but higher rate tax payers will receive a higher rate of relief

Can I pay less? (50/50 scheme option)

The 50/50 section is a new option available from April 2014 which allows you to pay less into your pension. By paying less into your pension you will still be building up a pension while you are a member of the 50/50 section but at a lower rate.

Read more

Whilst a member of the 50/50 section you will pay half the contributions that you would have paid in the main section of the scheme

Member Contribution Rates from  1 April 2018 to 31 March 2019

Your actual Pensionable Pay

Contribution Rate in the 50/50 section

Contribution Rate in the Main Section

Up to £14,100

5.5%

2.75%

£14,101 - £22,000

5.8%

2.9%

£22,001 - £35,700

6.5%

3.25%

£35,701 - £45,200

6.8%

3.4%

£45,201 - £63,100

8.5%

4.25%

£63,101 - £89,400

9.9%

4.95%

£89,401 - £105,200

10.5%

5.25%

£105,200 - £157,800

11.4%

5.7%

Over £157,801

12.5%

6.25%

As you only pay half of the contributions into the scheme as a member of the 50/50 section you only accrue half of the benefits you would under the main section.

  • Your pension will accrue at 1/98th of the pensionable pay received by you during your membership of the 50/50 section.
  • Your lump sum death grant, ill health enhancements and survivor benefits are not affected by the 50/50 section and are calculated as if you were in the main section.

An example of the effect of membership of the 50/50 section based on an employee earning £18,375 a year paying a contribution rate of 5.8% is shown below:

Main section

50/50 section

Gross contribution in the Main section (for 1 year)

5.8% = £1,065.75

Gross contribution in the 50/50 section (for 1 year)

2.90% = £532.88

Pension build up before revaluation in the Main section (for 1 year)

£375.00 for each year in Retirement

Pension build up before revaluation in the 50/50 section (for 1 year)

£187.50 for each year in Retirement

Lump Sum Death Grant

£55,125 (3 x £18,375)

Lump Sum Death Grant

£55,125 (3 x £18,375)

There is no limit to the number of times you can move between the main and the 50/50 section but you should be aware that you will be re-enrolled into the main section every three years.

If you are paying a contract to purchase additional pension or benefits in the LGPS, these contracts will continue when you elect to move to the 50/50 section and the contributions under the contracts must still be paid in full. The only exception to this is that any additional pension contributions (APCs) you are paying to purchase extra pension may have to cease depending on the reason why APCs are being made.

Full details are provided on the 50/50 application form which can be downloaded below:

ERPF-Member-Election-Join-the-5050-section

Can I get a refund of my contributions?

You can only get a refund of your contributions already paid into the scheme in the following circumstances:

  • 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.
  • If you opt out of the LGPS with 3 or more months membership and before completing the 2 years membership you can take a refund of your contributions (less any statutory deductions) or transfer out your pension to another scheme, as long as you have not brought any previous pension benefits into the scheme and do not have any other LGPS benefits.

If you have transferred some previous pension benefits into the scheme, have other LGPS benefits or you start working for another Local Government Employer within one month and one day of your leaving date, then this may prevent you from receiving a refund of your contributions even if you have been in the scheme for less than 2 years. 

More information on what happens when you leave the scheme is available in the section ‘Leaving the Scheme before retirement’ and ‘Previous Pension Benefits’

Can I pay more for additional benefits? (APCs and AVCs)

You can top-up your retirement benefits by paying:

  • Additional Pension Contributions (APCs) to buy extra LGPS pension (but not if you are in the 50/50 section)
  • Additional Voluntary Contributions (AVCs) arranged through the LGPS (in-house AVCs with Prudential)
  • Free Standing Additional Voluntary Contributions (FSAVCs) to a scheme of your choice
  • Contributions into a stakeholder or personal pension plan

You can combine any of these options and all of them are subject to tax relief.

The options available through the LPGS and the ERPF can be viewed in the PDF below:

Increase Pack (pdf 551kb opens in new window)

For information on the costs and benefits from a FSAVC, Personal Pension or Stakeholder we would suggest that you seek professional advice from an independent financial adviser (IFA) as we do not offer these products.  An IFA would be able to help you choose the right option for you.

Read more

Restrictions may apply if you have existing contracts in the LGPS that have bought additional pension benefits or have joined the 50/50 section of the LGPS.

There is no overall limit on the amount of contributions you can pay (although there is a limit on the extra scheme pension you can buy and on the amount of Additional Voluntary Contributions you can pay). However, tax relief will only be given on contributions up to 100% of your UK taxable earnings (or, if greater, £3,600 to a “tax relief at source” arrangement, such as a personal pension or stakeholder pension scheme).

Additionally, under HM Revenue and Customs tax rules there are controls on the pension savings you can have before you become subject to a tax charge and this is explained in more detail in the section Your Pension Benefits 

The rules that apply if you are paying extra contributions and you are absent from work are covered in our section Absences from Work

Why have I been brought into the scheme when I have already opted out?

You are automatically brought into the LGPS for each job you have that is eligible for membership even if you have opted out of the scheme in any other jobs you may have had.

In addition, the Government have created an initiative to encourage you to pay into pension arrangements called auto enrolment. This means that you are automatically enrolled into the LGPS without any action from you as soon as your employer is required to comply with auto enrolment and they then have to repeat the process approximately every 3 years. This means that members who have previously opted out are brought back into the scheme.

You are able to opt out of the scheme if you do not wish to participate, but you will have to give written notice during the formal opt-out period.

If you wish to opt out of the scheme please visit the Leaving before retirement page.

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