What are your options when opting out, leaving or transferring

Please think carefully before deciding to opt out. Your LGPS pension is a valuable benefit.

From the day you join the LGPS, you start to build up a guaranteed income that you could receive from age 55 for the rest of your life. You get valuable life cover, dependant’s pensions and ill health cover. On average your employer pays three times the amount you pay into the Scheme.

Other things to consider include:

• You receive tax relief on your contributions so it may not be costing as much is you think.
• You receive ill health and death in service cover.
• What income will you have in retirement? Will there be enough to provide for your plans when you retire?
• If you opt out and are awarded benefits on hold (deferred benefits), you will not be able to draw those benefits until you leave the employment that they relate to.

Before opting out, you could consider moving to the 50/50 section of the Scheme which offers a lower cost of membership for reduced benefits, but still gives you full life and ill health cover as if you were in the main scheme.

How do I opt out?

You can opt out by completing the opting out form and returning it to your employer. Your membership will stop either on the date you sign the form or on the date you specify as your leaving date.

If you leave within two years of joining, you might be able to choose to take a refund of your contributions. If you take a refund, this means that you will no longer have a pension with us. 

What do I need to think about before choosing to take a refund?

There will be a deduction for any tax relief, and a national insurance deduction for any membership before 6 April 2016 to put you back into the State Second Pension Scheme (S2P). 

We can refund your contributions once a month and two days have passed since you left. We will add interest if we pay your refund more than 12 months after you have left.

We will not pay a refund if:

• you rejoin the LGPS in England or Wales within a month and a day of leaving
• you rejoin the LGPS before we pay your refund to you
• you hold another job in which you are a member of the LGPS and that you held at the same time as the job you have left. In this case, you must combine your benefits 
• it is more than five years since you left the LGPS
• you hold other LGPS benefits, whether on hold, in payment or actively contributing towards.

If you rejoin the LGPS after having previously left an LGPS employment without building up pension rights, but you deferred taking a refund of contributions, then this deferred refund must be joined with your new employment. 

How do I request a refund of my contributions?

When your employer tells us that you have left your job or opted out of the Scheme, we will contact you to confirm your options. You can then let us know that you want a refund by completing and returning the form provided by us. You will be able to access the form and accompanying information in your My Pension account. If you have elected for paper communications we will also send you a paper copy.

You don’t have to decide straight away. You must tell us before five years have passed or you will lose this option.

You may be able to transfer your benefits to a different pension scheme if you leave the Local Government Pension Scheme (LGPS) as long as you have been paying in for at least three months. 

To do this you:

• must no longer be paying into the LGPS with either Greater Manchester Pension Fund (GMPF) or another LGPS fund
• must not be receiving a pension from the LGPS (other than a spouse’s, civil partner or cohabiting partner’s pension, or a pension obtained from a pension credit following a divorce or dissolution of a marriage or civil partnership)
• must not be retiring immediately due to redundancy, business efficiency or ill health reasons
• must be more than 12 months away from normal pension age (the age that you can take your pension and any lump sum in full) or before any guaranteed minimum pension (GMP) you are entitled to is payable (if you have a GMP this is payable at age 60 for women and age 65 for men)
• must be transferring your benefits to an His Majesty’s Revenue and Customs (HMRC) registered pension scheme. 

If you have more than one set of benefits on hold in the LGPS in England and Wales (in the same or separate LGPS funds), then you will need to transfer all of them or none of them to your new chosen scheme.

A pension credit awarded following a pension sharing order from a divorce or dissolution of a marriage or partnership can be transferred independently of your main scheme benefits.

Once you have read through all the information provided (both here and on other regulatory websites), you can decide if you wish to request a transfer of your LGPS benefits to another pension scheme. If you do, your application will be assessed against the two conditions set out in The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 as follows;

First condition: The receiving scheme will need to be a scheme listed in the transfer regulations set out below:

• a public service pension scheme (schemes established by a public authority for civil servants, armed forces, health service workers, teachers, judiciary, police, firefighters, and local government workers)
• an authorised master trust which you can find on The Pension Regulator website
• an authorised collective defined contribution (CDC) scheme. 

Second condition: Evidence or information. 

Where the first condition is not met and the receiving scheme is not one of those described in the first condition, the second condition must be met for all other transfer requests. 

Where the second condition applies, we must request evidence or information to help demonstrate:

• the employment link in the case of an occupational receiving scheme, or
• either the employment link or the residency link in the case of an occupational qualifying recognised overseas pension scheme (QROPS), or the residency link where it is not, and
• any other evidence or information that we consider relevant to the transfer. 

To demonstrate the employment link, we will require evidence of the items highlighted in the table below. 

If your transfer request is to a QROPS you must provide evidence to either confirm overseas residency or an employment link, depending on your employment status. If you are unable to provide an employment link you must provide evidence that you have been a tax resident in the same country that the receiving scheme is based for at least six months ending on the date of the transfer request and can include: 

• utility bills
• TV subscriptions
• insurance documents relating to their overseas home
• the address registered on their driving licence
• bank account and credit card statements
• evidence of local tax being paid
• registration at that address with local doctors.

Please be aware that 25 per cent overseas transfer charge applies to some overseas pension transfers. More information can be found in the LGPS Scheme Administrator factsheet.

A quick guide to transferring your benefits out of the Local Government Pension Scheme.

A cash equivalent transfer value (CETV) is the amount we would transfer to your new scheme in exchange for the pension benefits you have built up with us. 

You will need to ask us for a CETV if you are looking to transfer out. We will send you the first one free of charge. If you need another within 12 months, there will be a charge of £180 (inclusive of VAT). 

You can request a CETV by:

• logging onto your My Pension account where you can select 'Explore my transfer options' to get an estimate online. You can request a guaranteed CETV if you are ready to proceed. (This is not available if you are still paying into GMPF).
• using the secure Contact Us form when logging into your My Pension account
• calling us on 0161 301 7047
• writing to us at Guardsman Tony Downes House, 5 Manchester Road, Droylsden, Manchester, M43 6SF.

We can only provide you with an estimated CETV based on your current pay if you are still paying into the Scheme at the time of your request.

Deciding whether or not transferring your pension rights is the best thing for you can be difficult. We recommend that you consider getting help from a financial adviser. For help choosing a financial adviser, visit the MoneyHelper website.

If you are considering a transfer to a defined contribution scheme that offers flexible retirement benefits, you will need to get financial advice if the transfer value (excluding AVCs) is £30,000 or more. You may still wish to get the help of a financial adviser even if the value of your benefits is below £30,000. 

The adviser must have permission for the activity of ‘advising on pension transfers and pension opt-outs'. For further information on how to check this, see The Pension Regulator’s DB to DC transfers and conversions guidance.

It is especially important to obtain financial advice if you are looking to transfer to one of the following types of pension schemes, due to the investment risks:

• A personal pension plan.
• A stakeholder pension scheme.
• A buy-out insurance policy. 
• An employer's money purchase scheme.

There are certain circumstances, referred to as red and amber flags, which mean that a statutory transfer cannot proceed, or where we need to ask for more information from you and request you to seek guidance from MoneyHelper, before the transfer may proceed. You may be required to attend a guidance session with MoneyHelper before the transfer can proceed. You will also be required to provide evidence of attending the session, which will be supplied to you by MoneyHelper in the form of a unique identifier. This step is in addition to the requirement to obtain independent financial advice if the transfer value is over £30,000 and any other financial advice you may already have sought.

Freedom and choice is the term used to describe a set of pension changes that were introduced by the Government in April 2015. These reforms gave members of defined contribution schemes who are age 55 or over more choice about how they take the money from their pension.

The LGPS is a defined benefit scheme, so was not directly affected by these changes. But they allowed LGPS members who have paid additional voluntary contributions (AVCs) to transfer their LGPS benefits and AVC benefits independently of each other. 

To take advantage of these reforms, you would need to transfer to a different type of pension scheme. All of the above transfer criteria must apply to you if you want to do this.

For more information and frequently asked questions you should visit the LGPS member website.

Yes. 

Transferring to a public sector scheme will come under the first condition set out under The Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 as follows; 

First condition: The receiving scheme will need to be a scheme listed in the transfer regulations set out below: 

• a public service pension scheme (schemes established by a public authority for civil servants, armed forces, health service workers, teachers, judiciary, police, firefighters, and local government workers). 

Public sector schemes such as the teachers' or police pension schemes accept transfers although they do provide different benefits to those of the LGPS. If you want to transfer your GMPF benefits to another public sector pension scheme, you must apply to transfer them within 12 months of you joining their scheme. 

Yes, additional voluntary contributions (AVCs) can be transferred to another pension scheme.

To do this you:

• must not have a pension or annuity obtained from an AVC in payment
• must not be paying into an AVC arrangement in an LGPS fund 
• must be transferring it to an HMRC registered pension scheme
• must not be receiving payment of a main scheme pension from GMPF.

If you have more than one AVC, then you will need to transfer all of them or none of them to your new chosen scheme, even if they are in several different LGPS funds. AVCs can be transferred separately to main scheme pension benefits.

Although this type of arrangement is defined contribution, it is not a drawdown product. Flexible access drawdown is a pension product that lets you access your pension savings whenever you need to while reinvesting your remaining funds in a way that is specially designed to provide an ongoing retirement income. You will need to transfer your AVCs to an arrangement that provides this if you are looking for this type of product.

So we can ensure you have all the information you need, please contact us before you contact your AVC provider if you wish to transfer your AVCs. 

Before making any decision to transfer your defined benefit to another pension scheme please read the information from the Financial Conduct Authority (FCA).  

 Considering a pension transfer: defined benefit | FCA  

We suggest you get all the information you need to compare the benefits of both schemes properly. You should know what your benefits are worth in the LGPS as well as what you will get in your new pension scheme if you transfer them. You should be clear about which is best for you and why.

Remember that your LGPS benefits will automatically increase in line with the cost of living each year. 

You will lose your entitlement to LGPS benefits once we pay a transfer to your chosen scheme. This includes your right to any survivor benefits that might have been payable upon your death.

If a payment is to be made we will request your birth certificate and in some cases your marriage certificate.

More so than ever, pension scammers are looking to exploit savers out of their valuable pension benefits. Pension regulators are encouraging savers not to make any rash decisions during the Covid-19 pandemic. 

Please read through the information on our Pension scam page to help protect your pension.

Yes, you should be able to do this if you ask your new fund within 12 months of joining them. You should contact your new fund to find out how. 

You will have an opportunity to tell us of any new employments when you receive the leavers declation form. You will be able to access the form and accompanying information in your My Pension account. If you have elected for paper communications we will also send you a paper copy.