Deferred

Having a deferred pension means you have been a member of the LGPS previously but left before retirement age. Unless you chose to transfer your pension, you would have retained it with us. It’s also referred to as a ‘preserved benefit’ and some people call it a ‘frozen pension’, though strictly speaking it isn’t frozen as it usually attracts an annual cost of living increase.

The annual increase is in line with the Consumer Prices Index (CPI) and is applied on the first Monday on or after 6^th April each year. Records are updated with the CPI increase (assuming it has increased) usually around July or August and you can view the latest value of your pension through your Member Self-Service account. If you do not have a Self-Service account, please register today.

A change to the scheme rules has been made to provide that survivor benefits payable to a same sex spouse or a civil partner are equal those paid to the widow of a male member. 

Why has the change been made?

The change has been made as a result of a Supreme Court judgment (Walker v Innopsec) which found that Mr Walker’s male spouse was entitled to the same benefits that would have been paid if Mr Walker had left a widow in an opposite sex marriage.

Why does this apply to the LGPS?

The government believes that the implication of this judgment for all public service pensions schemes, including the LGPS, is that surviving civil partners or surviving same sex spouses should be provided with benefits equal to those that would be left to the widow of a male member. 

When does the change take effect from?

The change is backdated to the date the civil partnerships and same sex marriages were introduced – this is 5 December 2005 for civil partnerships and 13 March 2014 for same sex marriages.

This means that where a member of the LGPS has died leaving a surviving civil partner or a same sex spouse, the survivor’s pension in payment will need to be reviewed and any additional amounts paid, where applicable. We are in the process of reviewing the impact of this change and will be contacting affected civil partners and same sex spouses in due course.  

If you think this applies to your personal situation following the death of your civil partner and you have not heard from us, please contact us immediately.

The change will automatically be taken into account in survivor benefits paid to civil partners and same sex spouses in the future.

The deferred pension is inflation proofed, and until 2010 the indexation was in line with the Retail Prices Index (RPI). From 2011 onwards, the rate of indexation became linked to the Consumer Prices Index (CPI).

2022: From 11 April 2022 the pensions revaluation was a 3.1% increase.

2021: From 12 April 2021 the pensions revaluation was a 0.5% increase.

2020: From 6 April 2020 the pensions revaluation was a 1.7% increase.

2019: From 8 April 2019 the pensions revaluation was a 2.4% increase.

2018: From 9 April 2018 the pensions revaluation was a 3.0% increase.

The early retirement age can depend on when you left the scheme.

If you left after April 1^st 2014

If your LGPS pension was deferred because you left after 1^st April 2014, then you are able to access your pension benefits from age 55 without the consent of your employer. However, the benefits are likely to be significantly reduced in order for you to start drawing them earlier.

If you would like an idea of the scale of reductions, please see the table showing the percentages.

If you left before April 1^st 2014

If you left the LGPS before 1^st April 2014, then until the rules changed on 14^th May 2018, you could not draw your pension between the ages of 55 and 60, unless you had achieved the consent of your former employer (in line with their own internal policy).

However in May 2018, access without employer consent was extended to pre April 2014 leavers over age 55, bringing the rules in line with those that left the scheme after April 2014.

For members who left the scheme after 1^st April 1998 and before 1^st April 2014, the new rules are clear and members can access their pension from any date between age 55 and their normal pension age subject to the appropriate reductions.

If you left before April 1^st 1998

The rules for those that left before 1^st April 1998 are not as straightforward, and access is more restricted. Please contact the Pensions Section for more detailed information if you deferred your pension before 1^st April 1998, are over age 55 and are interested in claiming your deferred benefit.

Ill Health

Deferred members can also apply for release of a deferred benefits on ill health grounds at any age, which will be judged on whether you are permanently unfit to carry out gainful employment, or in some cases, your former role.

In this instance you will need to apply to your former employer for early payment, stating the reasons, who will refer you to their approved medical advisor for an assessment under the scheme rules which were in force when you left the pension scheme.

Opt out members

If you opted out of the pension scheme and re-join at a later date and so have separate records, but you're still working in the same job, then you won't be able to receive your pension from your first record until you leave your current job.  

If you opted out after 11 April 2015, then if you re-join the scheme this opt out record has to remain separate from your newly created record, and the same restrictions apply to taking the pension from your old ‘opted out’ record.

Your annual statement will be available to view online, usually in August.

We will also contact you around 2 months before your earliest claim date (this may be between your 55th and 60th birthday) to tell you about your entitlement and how to claim it.

Please keep us informed of any changes to your address so that we can write to you when you are getting close to retirement with details on how to claim your benefits.

If you have registered for an online account , you can update your details electronically via your account.

If you have deferred benefits from a previous Local Government Pension Scheme (LGPS) employment, and any of these rights relate to membership that you built up in the scheme before 31 March 2014, then you will be given information by your new scheme to help you decide whether to move those benefits across from the Leicestershire fund, or to keep them here. There are a number of factors that you will need to consider, and you will be given full details so that you can make this decision.

If you have deferred benefits from a previous LGPS employment and all of those benefits relate to a period of employment that took place after 1 April 2014, then those benefits will automatically be joined together with your new LGPS pension.  This is because all post 2014 rights are equal across the different funds, and so the Regulations state that a transfer should automatically take place. Your pension rights are exactly the same whichever fund they are held in, and there is no advantage or disadvantage to your pension being moved.

Normally yes, although you will need to check with that scheme or fund that they are willing to accept the transfer.  If they will, then they will tell you the procedures.  This will involve a request being made for a 'cash equivalent transfer value (CETV)' to be calculated by the Pension Section, which is supplied to your new provider so that they can inform you of the equivalent rights in their scheme.  You will then be able to make an informed decision.

You will be aware of legislation about pension flexibility and choice.  These new rules will not change the rules of the Local Government Pension Scheme.  The changes that the Government are bringing in will affect what are known as 'defined contribution schemes', such as a private personal pension plan.  The LGPS is not one of these schemes.  It is what is called 'a defined benefit scheme'. That is to say the rules and benefits of our scheme are set out in law already.

The Government changes will bring new flexibilities to personal pensions.  However the LGPS already includes some of these measures in its own rules.  That is to say, small pensions can sometimes be paid up front as a lump sum within certain limits.
General Points to note about transferring from the LGPS:

• You cannot transfer your benefits, other than Additional Voluntary Contributions (AVCs), if you leave the scheme when you are less than one year away from your Normal Pension Age.
• You cannot be already in receipt of a LGPS pension or have previously retired on Tier 3 ill health grounds
• If you have other deferred pensions within the LGPS, then all deferred pensions must be transferred out, or none at all.
• An option to transfer must (other than in respect of AVCs) be made at least 12 months before your Normal Pension Age or, if you are a Pension Credit member, at least 12 months before your Normal Benefit Age.
• If you are considering whether to transfer benefits, make sure you have full information about the two pension arrangements i.e. details of what your benefits are worth in the LGPS and details of what your benefits would be worth in the new pension scheme, if transferred.

Deferred members may well be thinking about transferring their pension to another pension scheme.  The LGPS has therefore produced a fact-sheet to help all members:

Freedom and Choice - Transfers from the LGPS to Defined Contribution Schemes PDF, 212 KB

Your deferred Local Government pension can be transferred to an overseas arrangement, but only certain schemes are recognised and qualify under tax rules for transfers, they are known as a ’QUOPS’ type of scheme.  Full details of the conditions that must be met by the receiving scheme will be provided if a request for transfer details are received by the Pensions Section.

Tax charges can apply in some circumstances, unless, from the point of transfer, both the individual and the pension savings are in the same country, both are within the European Economic Area (EEA) or the QROPS is provided by the individual’s employer.

If this is not the case, there will be a 25% tax charge on the transfer and the tax charge will be deducted before the transfer by the scheme administrator or scheme manager of the pension scheme making the transfer.

It also widens the scope of UK taxing provisions so that, following a transfer to a QROPS on or after 6 April 2017, they apply to payments out of those transferred funds in the five tax years following the transfer.

Therefore transfers to QROPS requested on or after 9 March 2017 will be taxed at a rate of 25% unless at least one of the following apply:

• both the individual and the QROPS are in the same country after the transfer
• the QROPS is in one country in the EEA (an EU Member State, Norway, Iceland or Liechtenstein) and the individual is resident in another EEA after the transfer
• the QROPS is an occupational pension scheme sponsored by the individual’s employer
• the QROPS is an overseas public service pension scheme as defined at regulation 3(1B) of S.I. 2006/206 and the individual is employed by one of the employer’s participating in the scheme
• the QROPS is a pension scheme established by an international organisation as defined at regulation 2(4) of S.I. 2006/206 to provide benefits in respect of past service and the individual is employed by that international organisation
• UK tax charges will apply to a tax-free transfer if, within five tax years, an individual becomes resident in another country so that the exemptions would not have applied to the transfer
• UK tax will be refunded if the individual made a taxable transfer and within five tax years one of the exemptions applies to the transfer

The scheme administrator of the registered pension scheme or the scheme manager of the QROPS making the transfer is jointly and severally liable to the tax charge and where there is a tax charge, they are required to deduct the tax charge and pay it to HM Revenue and Customs (HMRC). This applies to scheme managers of former QROPS that make transfers out of funds that have had UK tax relief, if the scheme is a QROPS on or after 14 April 2017 and at the time the transfer to the former QROPS is received.

Payments out of funds transferred to a QROPS on or after 6 April 2017 will be subject to UK tax rules for five tax years after the date of transfer, regardless of where the individual is resident.

If you die with deferred benefits in the LGPS, the following benefits can be payable:

The Death Grant lump sum

The Death Grant is a one-off lump sum payment, equal to a multiple of the current value of your deferred pension at the date of leaving the LGPS.

If you left the LGPS before 31 March 2008, the amount payable would be three times (x3) the pension, and if you have membership after 1 April 2008, the amount payable would be five times (x5) the value of the pension.

If you have not nominated a beneficiary, please do so:

Complete the Death Grant Expression of Wish form online

If you have a Self-Service account on this website, you can complete the form online. To do this, you will need to either Login or go to the ‘Nominations’ section of Your Account: please click on the relevant icon at the top of this page.

If you do not have a Self-Service account, you can Register today.

Download the form

Death Grant Expression of Wish form PDF

You can make an expression of wish for whoever you would like to receive the lump sum - friends, family, partners, even an organisation such as your favourite charity.

The advantage of making an expression of wish is that the payments can normally be made quickly without waiting for your estate to be settled.  Also, payment usually means that no inheritance tax needs to be paid on the Death Grant.

If you have more than one LGPS pension, that is to say if you a current contributing member as well with separate benefits either within the Leicestershire Scheme or under another Local Authority in the event of your death, only one Death Grant will be paid.  This will be the one that is the higher of the payments, once they have been calculated.

Surviving partner's pension

There is also an ongoing pension for your husband, wife, civil partner, or cohabiting partner*.

*What defines a cohabiting Partner?  A scheme member can only provide benefits for a co-habiting partner provided they paid into the scheme on or after 1 April 2008. 

Cohabiting partner means a person whom Leicestershire County Council Pension Fund is satisfied fulfils the following conditions:

The person (P) has fulfilled the conditions below for a continuous period of at least 2 years on the date the member (M) died

The conditions are:

• M is able to marry, or form a civil partnership with P
• M and P are living together as if they were married or as if they were civil partners
• Neither M nor P is living with a third person as if they were married or as if they were civil partners, and
• Either P is financially dependent on M, or M and P are financially interdependent.

Pensions for eligible children

Pensions can also be paid to eligible children.  Eligible children can include your own children, adopted children and certain other children who depend on you financially.  They must normally be under 18, but can be as old as 23 if they carry on in full time education or in training for a trade, profession or vocation, or can even cover some adult children who cannot work, because of a disability which arose while they were a child.