Pre 1 April 2008 Members of the Local Government Pension Scheme (LGPS)

Mixed benefits features of the New Look Scheme and Old Scheme

If you were paying into the Local Government Pension Scheme (LGPS) on 31st March 2008 and you continue to have a contract of employment on 1st April 2008 you are automatically transferred to the New Look 2008 LGPS .

With the introduction of the New Look 2008 Scheme, all membership built up before 1st April  2008 will be ‘banked’ and used to provide a pension and an automatic tax free lump sum, calculated using the 1997 LGPS (old scheme) regulations and will be based on a 1/80th rate and  final year's pay at actual date of leaving/retirement and will provide the following benefits- .

• A pension calculated at 1/80th of your final year's pay.
• An automatic tax free lump sum based on 3/80th of your final year's pay
• The option to convert some of your  pension to obtain a higher lump sum by  commuting or swapping, £1.00 of your annual pension for £12.00 of lump sum.

The benefits based on your pensionable service after the 31st March 2008 will be calculated using the New Look 2008 LGPS regulations and will provide the following benefits-

• A pension calculated at 1/60th of your final year's pay.

• The option to receive a tax-free lump sum by commuting, or swapping, £1.00 of your annual pension for £12.00 of lump sum.  You are allowed to receive up to 25% of the capital value of your pension pot when you retire.

The two amounts of pension and tax free lump sum will then be added together to give you your total benefits.

Main features of the 1997 LGPS (old scheme)

• Automatic entry to the scheme was available to new employees, other than casual employees and those employed by admitted bodies. Casual employees could opt to join the scheme, whilst employees of admitted bodies had to be nominated by their employer.

• A pension of 1/80th of final pay for each year of membership in the scheme up to 31st March 2008.

• Automatic 3/80ths lump sum up to 31st March 2008, plus the  ability for more by commuting up to 25% of pension value at a rate of £12.00 cash lump sum for every £1.00 of pension given up

• A normal retirement age of 65 for the release of unreduced benefits, but with the right to take pension from age 60 or, with employer's consent, from age 55 (or from age 50 for existing members opting to draw benefits with employer consent before 31st March 2010).

• Benefits calculated on the best of -  the Final Year’s pay; best of last 3 years pay (re valued) or have certificate of protection.

• Employees could be in the Scheme beyond age 65 but benefits must be drawn before age 75. Benefits drawn after age 65 were actuarially increased to reflect the fact that they are being paid after the normal retirement age of 65.

• Immediate benefits  paid on redundancy / efficiency from age 55 (or from age 50 for existing members leaving before 31 March 2010).

• Ill health retirement would allow immediate payment of benefits at any age for those members certified as permanently incapable of continuing their own or a comparable Local Government employment until age 65. Enhanced membership of up to 10 years would be granted depending on age and length of accrued membership

• Flexible retirement with employer consent, under specific circumstances (the employee reduces either their contracted hours of work and/or grade of post) will be permitted from age 50, allowing scheme members to draw all of their benefits while still continuing to work.

• The death in service tax free lump sum of 2 times pay (now superseded by death in service tax free lump sum of 3 times pay under new look scheme benefits).

• The post retirement lump sum paid on death before age 75 is 5 times pension less pension already paid.

• Survivor benefits  payable for life to spouses and civil partners at a 1/160th accrual rate i.e. 1/160th of the deceased scheme member's final pay for each year of membership in the scheme.

• Survivor benefits  payable to children with the amount depending on the number of children.

• Employee contribution rates of  6% of pensionable pay and 5% for protected manual workers (now superseded by banded contribution rates new look scheme).

• The option to buy added years and/or pay in-house/free standing AVCs

Details of the 'new' look 2008 LGPS scheme