Buy back lost pension

If you are away from work and your contributions stop, depending on the reason for your absence, you may not build up pension for that period.

You can choose to buy this ‘lost pension’ back when you return to work, at no additional cost to you if you apply to do so within 30 days of returning to work.

You can buy back lost pension if:

• your pension contributions ceased as a result of the leave
• your pension did not receive any protection for the period
• you were in the main or 50/50 section of the scheme before you went on leave and remained in the scheme when you returned from leave
• you are still actively contributing to your LGPS pension when you apply

Your employer will contribute 2/3rds of the cost if:

• you apply within 30 days of returning to work, and
• you did not take unauthorised leave for example due to a strike, trade dispute or industrial action

If you do not meet these conditions, you are liable to meet the full cost of buying back the lost pension.

If you are past the 30-day deadline, you can still ask your employer if they would contribute towards the cost.

We need confirmation of this from your employer before we can process a late application.

If you do not meet these conditions, you would usually be liable for meeting the full cost of buying back the lost pension, though you can still ask your employer if they would contribute.

We need confirmation of this from your employer before we can process a late application.

You can pay for the lost pension by:

• spreading the cost of paying towards a lost pension APC over a number of complete years
• paying a lump sum directly from your pay
• paying a lump sum directly to the Fund

Tax relief will be applied to all APC contributions deducted directly from your pay. You must make sure that there is enough left in your earnings to meet tax and national insurance costs.

If you are within one year of your Normal Pension Age, or have passed your Normal Pension Age, you can still buy back the lost pension. However, you will only be able to pay by lump sum. Your Normal Pension Age is the age your pension benefits become payable without reductions. Usually this is the same as your State Pension Age.

If you want to spread the payment, regular contributions are taken from your pay, like your normal pension contributions.

You can spread payments out over any length of time between one year and your Normal Pension Age.

If you wish to pay as a one-off lump sum you can do so either by having the lump sum deducted directly from your pay or by making a direct payment to the fund.

If you make a direct payment, you may be able to apply to HMRC for tax relief on the contribution by filing a self-assessment tax return.

If you have any questions about this, contact HMRC.

Once we receive your application, we will check that:

• you are eligible to pay towards a Lost Pension APC
• your application has been completed correctly
• it is reasonable for you to make the payments from your pay (if you have not chosen direct payment)

As an enhancement would be payable on certain ill-health retirement benefits, we will ask you to complete a medical form. We have the right to refuse an application where we believe someone has a relevant medical condition, though this is rare.

Once you return this to us and we have approved the lost pension APC, we will send you a confirmation letter. We aim to approve a Lost Pension APC application within 10 working days.

If you are making a direct payment, we will advise you of our bank account details.

If you are paying via your pay, we will contact your employer and ask them to action your request. The employer will check the contract is correct, and begin making deductions from the next available pay date.

If you have any questions about contribution deductions, you should contact your employer directly.

Once you have paid the full amount for the Lost Pension APC, your pension will be the same as if you had not had the period of the leave. You won’t be able to access the lost pension APC separately to the rest of your LGPS pension.

The lost pension you have bought back will be:

• revalued according to cost of living increases like the rest of your LGPS pension
• used in the calculation of any death benefits
• included on your annual benefit statement

If you were in the scheme before 1 April 2014, you may have Underpin or rule of 85 protection. Any lost pension APC you purchase will count towards the calculation of these protections.

For more information about when you can take your pension, see The retirement process

The pension you purchase will be revalued in line with cost of living increases annually, just like your main scheme LGPS pension.

Once you stop paying in or you put your pension in payment, the pension will receive the pensions increase.

Once you set up the contract you won’t be able to change it.

A Lost Pension APC contract ends when:

• you tell us you want to end the contract giving us one month’s notice
• you stop being an active member of the scheme,  leave your LGPS employment or take flexible retirement

If the contract stops before it has been completed due to one of the above reasons, we will credit your account with the proportion of pension that you have paid for.

If you leave the scheme without meeting the 2-year vesting period, you may be entitled to a refund of contributions. Any contributions you have paid towards the Lost Pension APC will be included.

Buying back lost pension is optional and you can choose not to do so. If you chose not to do so, you should be aware that:

• you will receive less pension than you would have if you bought back the pension
• in the event of your death, your dependant(s) will receive less pension than they would have if you bought back the pension
• the period of absence will not be used when calculating protections for the Underpin or Rule of 85

While we can provide information about the LGPS, we cannot offer you advice.

We always recommend that you get help with decisions about your pension.