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Leaving your LGPS employment before you retire

If you stop paying into the LGPS, either because you leave your job, or decide to opt out of the scheme, you may be wondering what will happen to the pension contributions you have paid in.

What happens to your pension contributions will depend on whether or not you have met the 2 year vesting period.

To be entitled to an LGPS pension, you must have paid into the scheme for a period of at least 2 years. This 2 year period includes service in more than one job in Buckinghamshire Pension Fund. It also includes service in one or more LGPS Fund(s) outside of Buckinghamshire.

You must tell us if you have paid into another LGPS Fund. Please complete the LGPS membership form if you have not already done so.

Opting out within 3 months

If you opt out within 3 months of joining your employment, your membership of the scheme will be void and your employer will arrange for you to receive a refund of contributions.

This is the case even if you have previous LGPS service over two years. If you opt out over 3 months the rules are the same as leaving your job before meeting the vesting period, as explained in the next section.

If you have not met the vesting period

If you opt-out after three months, or your employment ends, and you have less than 2 years total LGPS membership, you will not have met the vesting period and therefore won’t be entitled to an LGPS pension.

In most cases, you will be able to choose between transferring the value of your pension to your new pension provider or receiving a refund of your contributions. You will not receive the value of your employer contributions.

Once we receive your leaving information from your employer, we will write to you with your options. The letter will include an estimate of the transfer value (if applicable) and the value of the refund. It will also include a form you will need to complete and return to us to let us know what you would like to do.

Taking a refund of contributions

You won’t be able to take a refund if any of the following apply:

  • you re-joined the LGPS within one month and one day of the date the refund employment ended
  • you are currently paying in
  • you have more than 2 years total LGPS membership or have a deferred benefit in the LGPS or an LGPS pension in payment
  • you had a transfer in of pension that increased your membership to two years
  • you transferred in any previous non-LGPS pension from a scheme where refunds were not allowed

If you take a refund that you were not entitled to, we will ask you pay this money back.

You should also note that refunds are subject to tax. When you paid into the LGPS, you received tax relief on your contributions, therefore a 20% Fund tax is deducted when contributions are refunded.

If you have met the vesting period

You will be entitled to an LGPS pension if you leave the LGPS and have over 2 years total membership.

Your LGPS pension account will become deferred, and you will be sent a statement telling you the value of your LGPS pension and what you can do with it.

Find more information, see How to read your notification of deferred benefits statement.

If you re-join the LGPS

If you re-join the LGPS with the Buckinghamshire Pension Fund and your new employment is not concurrent, we will set up a new pension account for you. We will write to you about your options for combining your earlier account in due course.

For more information, see Combining LGPS accounts

If you re-join the LGPS with another Fund, you should inform them of your membership at Buckinghamshire if any of the following apply:

  • you have a deferred pension benefit
  • you did not receive a refund of contributions
  • you did not transfer out the value of your Buckinghamshire Pension