Leaving your employment before you retire
If you have paid into the LGPS for a period of two years or more when you leave your employment and are not eligible to receive immediate payment of your benefits, you will be entitled to deferred benefits.
How the leaver process works
When you leave your employment, we will assess your entitlement to deferred benefits. You are entitled to deferred benefits if the total of all your membership adds up to at least two years. This includes LGPS membership you hold with other funds. It’s really important that you tell us about all your LGPS membership, even if you have already left, as it could affect your entitlement. You can do this by completing a membership form, if you haven’t done so already.
To calculate the value of your deferred benefits, we need some information about your employment and your pay. It’s your employer’s responsibility to tell us when your employment ends and provide us with the information needed to make an accurate assessment of deferred benefits. We don’t have access to this information directly. If your deferred benefits include membership that was built up before 1 April 2014, we will need additional pay details. If you want to know about how we use this information, see Taking your deferred benefits
The employer must supply this information to us by the 19th of the month following your last day of employment. If we have not received it by then, we will contact your employer. When received, we will check it is correct and fully complete. Sometimes, we may ask for additional information. This is to ensure we assess your deferred benefits according to LGPS regulations.
There are quite a few steps in the leaver process, and this means that it can sometimes take a while. Please be assured this won’t have any negative impact on your deferred benefits, however, you are welcome to check on the progress at any time. If you need this information urgently, please contact us and we will do our best to help.
How to read your notification of deferred benefits statement
After we receive everything we need from your employer, we will provide you with a ‘notification of benefits’. This statement tells you what deferred benefits you are entitled to and how they are calculated. You should check the statement to make sure everything is correct.
The first section on this statement confirms the personal details we hold about you, your last day of employment and a final pay figure. The final pay figure is your average full-time equivalent salary, not your actual earnings. We use this to calculate any benefits built up before 1 April 2014. If you don’t have benefits before this date, this figure will not affect the calculation.
The second section tells you what benefits you are entitled to, at your date of leaving, and at the date they can be paid without reductions. When your pension is put into payment, the annual figure is divided by 12 and paid monthly to you for life. If you started in your employment before 1 April 2008, you will have an automatic lump sum retirement grant as part of your benefits. It is a tax free one-off amount paid to you after you retire. If you don’t have one, you can convert some of your pension to lump sum.
For more information, see Taking your deferred benefits.
The annual spouse’s pension is the amount paid to a qualifying spouse or partner if you were to die while a deferred member. You can find out more here: If you die before you take your deferred benefits
The next section shows the membership you have built up in the scheme. ‘Service at 1/80th’ is membership built up before 1 April 2008, ‘service at 1/60th’ is membership built up between 1 April 2008 and 31 March 2014. Membership built up after 1 April 2014 is recorded in ‘CARE service’.
The next section shows how we have calculated your deferred pension. This includes a calculation for each corresponding section of membership.
The following section shows you how we have calculated your lump sum retirement grant. This section will be blank if you don’t have membership before 1 April 2008.
The next section shows how much the spouse’s pension is. For more information, see How we calculate your deferred benefits
Beneath this is the HMRC Lifetime Allowance section. Before 6 April 2023, the government limited the amount of pension savings you can have before you have to pay a tax charge. This limit is known as the lifetime allowance. You may need to confirm the percentage of the lifetime allowance used up by your LGPS pension when you take any other pensions. This is shown on your statement under the 'value of benefits' header. Here you will find the percentage of the lifetime allowance used up by your LGPS pension. You can find more information on the lifetime allowance page.
If you are aged over 55 when you leave
If you are entitled to deferred benefits and are aged over 55 you can choose to put your pension into payment at the date of leaving. For more information, see The retirement process. If you would like to do this, you should advise your employer that you wish to take your pension when you hand in your notice.
If you do not tell your employer you plan to take your pension when you leave, you benefits will become deferred and you will need to provide three months’ notice to put your deferred benefits into payment
What you can do with your deferred benefits
You can leave your deferred benefits with us until you decide to take them. Your deferred benefits are adjusted according to cost of living increases. We will provide you with a Deferred Annual Benefit Statement (ABS). This will be uploaded to your My Pension Online account.
When you reach an age when your deferred benefits can be paid without reductions, we will write to you. You don’t need to wait until then to put your deferred benefits into payment. You can choose to take your deferred benefits at any age between 55 and 75 as long as you provide us with three months’ notice, either in writing or over the phone. If you take your deferred benefits before your Normal Pension Age (NPA), there will be reductions applied. If you take your deferred benefits after your NPA, you will receive late retirement increases.
If you leave your deferred benefits with us and you become too sick to work, you may be able to have them paid on the grounds of ill health regardless of your age. For more information, see taking your deferred benefits.
If you die before you take your deferred benefits, there are death benefits. These are available for your spouse, partner, children and nominated person or charity.
If you re-join the LGPS in a new employment, you should inform us or your new LGPS Fund about your deferred benefits held at Buckinghamshire as soon as possible. You can inform us by completing a membership form when you join. Once we receive this, we will look into your options for combining your deferred benefit account with your new active pension benefit account. For more information, see Combining LGPS accounts
At any time, until you are within 1 year of your NPA, you may be able to transfer your deferred benefits to another scheme
We recommend that you seek independent financial advice to ensure it is the best option for you Get help with decisions about your pension
Divorce and your deferred benefits
If you are going through a divorce, you may be asked to provide details about your deferred benefits. You can request a divorce pack containing the information you need, including a Cash Equivalent Value (CEV).
As a deferred benefit member you are entitled to one free divorce pack in a 12-month rolling period. There are charges for additional calculations and requests.
Register for My Pension Online
There is estimated to be billions currently held in lost pension savings. An account becomes ‘lost’ when the owner forgets they have the pension pot and the pension provider is unable to contact them. To make sure that you don’t lose track of your deferred benefits, it’s really important that you inform us when you change contact details. That way, we can keep issuing you statements and let you know when your deferred benefits are payable without reductions.
The easiest, fastest, most cost effective and environmentally friendly way to do this is by registering for My Pension Online. This is our free, self-service portal, allowing you to manage your deferred benefits online at the click of a button. You can quickly update your contact details and receive your pension statements the instant they are ready. Everyone who provides us with an email address will be set up with a My Pension Online account.
If you experience any difficulties registering, contact:
Email: [email protected]
Telephone: 01296 383 755. Lines are open Monday to Thursday 9am to 5:30pm and Friday 9am to 5pm, and our staff will be ready to assist you.
You can choose to opt out of My Pension Online by sending us a signed letter. If you don’t want a My Pension Online account and you need to tell us about a change of contact details, we will need a signed letter.