How can I access my benefits on hold?
We will put your benefits on hold if you leave or opt out of the Greater Manchester Pension Fund (GMPF) before your normal pension age (NPA) and have been a member for more than two years. We call this deferring your pension.
The date you left GMPF will determine your NPA:
- After the 1 April 2014 – NPA is linked to your State Pension age (SPA).
- Before 1 April 2014 – NPA will be 65, or earlier in some cases.
We will produce a statement for you each year to tell you the current value of your benefits on hold and what your NPA is. You can find this on your My Pension account. Your benefits on hold are revalued each year in line with the consumer price index (CPI) and are then paid in full at your NPA.
You can choose to take benefits on hold from the Local Government Pension Scheme (LGPS) anytime from age 55. However, we will normally reduce your pension to reflect the fact that we will be paying it for longer than we expected.
The easiest way to think about this is to think of a pension pot like a birthday cake. If we are going to pay your pot for 20 years then we cut the cake into 20 equal slices. But if you want to take your pension five years early, then we would need to cut it into 25 equal slices. Each of these slices will therefore be slightly smaller in size. If you wanted to take it 10 years early, then we would cut it into 30 equal slices, meaning each slice is smaller still.
The reductions applied to your pension reflect the amount of extra time that we are expecting to pay your pension for.
Mr Jones decides to access the benefit he has on hold at age 59. His NPA is 65, so we will be paying his pension for six years longer than if he took it at NPA.
His benefits on hold pension is currently £2,000 a year. The reduction factor that applies to him (using the early retirement tables) is 25.7 per cent. This applies to all his pension pot. Therefore, the reduction he will receive is £514 meaning his annual pension to be paid from age 59 is £2,000 - £514 = £1,486.
Different reduction factors might be used if you were paying in before April 1995 or before April 2014. If you were a member of the Scheme before 1 October 2006, you may have some protection to your benefits under the 85 year rule. Therefore, it is best to use the pension calculator on your My Pension account to work out how the reductions might affect you.
If you joined after 1 April 2008, then you won't have an automatic tax free lump sum. However, you can take up to 25 per cent of the overall value of your pension amount as a tax free lump sum. You must normally take all of your benefits at the same time.
You can choose to take your standard pension benefits, the maximum 25 per cent lump sum, or any amount in between.
For every £1 of pension you give up, you can get an extra £12 back as a lump sum which is tax free. The amounts may change if you have tax free cash from other pension schemes. It does not take account of any additional voluntary contributions (AVCs) you have with us, and you may be able to take some or all of your AVCs as tax free cash.
To work out your maximum lump sum you can use the standard figures from your MyPension account, or from your recent annual benefits statement. Then use the Local Government Pension Scheme (LGPS) calculator to work out your maximum lump sum.
You can login to your My Pension account and use the calculator at any time to check the amounts that would be paid to you on the date that you are thinking of accessing them. If you want to go ahead, then you just need to contact us to let us know. We will then send you the forms that you need to complete.
If we don’t hear from you before your NPA then we will get in touch with you around that time to see when you want us to pay your benefits to you.
You can choose to take your benefits anytime up to age 75.
If you choose to leave your benefits on hold after your NPA has passed, they will be paid from the date you start to receive them. Your election cannot be backdated to an earlier date.
Yes. It will be reviewed in line with price rises in the same way as when it was on hold. The consumer prices index (CPI) is the index used to do this and pensions are increased annually each April. It is possible that some years there might be no increase due if prices have stayed the same. But your pension won’t go down if prices go down.
Possibly. You can ask your former employer to let you access your benefits from any age on ill health grounds. However, you must meet certain criteria to receive them.
The decision to award ill health retirement is for your former employer. They must consult with an approved doctor before making their decision. The doctor might not need to see you, but they will arrange a suitable time with you if they do.
If your employer decides to award your pension to you, we won’t apply reductions because of early access.
For more detailed information on the criteria that you must meet and the process to follow, please read drawing your deferred benefits on the grounds of ill health guide.
Please contact your former employer if you think you meet the requirements.