Opting out

You can opt out of the LGPS if you decide you don’t want to be a member. What happens if you opt out depends on how long you’ve been a member of the scheme. You should think carefully before opting out. Opting out may reduce your income in later life. You may want to get help from an independent financial adviser.

Your decision

If you’re thinking about opting out of the LGPS, you might want to consider moving to the 50/50 section of the scheme as an alternative. In the 50/50 section you pay half the normal contributions to build up pension at half the normal rate. You’ll still keep full life cover and ill health cover in the 50/50 section.

If you’ve decided that the 50/50 section isn’t for you, you can opt out of the LGPS. Although not before the first day that you’re a member. This will usually be the first day of your job. But it may also be the date your employer must bring you into the LGPS under automatic enrolment rules.

You can opt out by filling in and giving your employer our opt out form.

Opting out before three months

If you opt out of the LGPS before you have three months’ membership, you’ll be treated as never having been a member. Your employer will refund any contributions that you’ve paid through their payroll team or payroll provider.

Opting out with less than two years’ membership

If you’ve been a member for three or more months, but you’ve not paid into the LGPS for two years, you’ll have other options:

• You can take a refund of the contributions you’ve paid. 20% tax will be taken from this.
• You can transfer your pension to another qualifying pension scheme. You may have a limited time to transfer. Contact your new Pension Fund to find out about any time limits that will apply.

You won’t be able to take a refund if you already have a deferred LGPS pension or an LGPS pension that’s being paid. You’ll be treated the same as a member who opts out after being a member for more than two years – see the next section.

Opting out after more than two years

If you opt out after you’ve paid in for two years or more, you’ll have a deferred pension in the LGPS. You’ll generally have the same choices as anyone who leaves their job before retirement. But there are two main differences:

• you can’t take your deferred pension until you’ve left your job, unless you reach 75
• if you re-join the LGPS, you won’t be able to join your two pensions together. You’ll have two separate pensions in the LGPS.

Re-joining the LGPS

If you opt out, your employer must re-enrol you in the LGPS every three years. They’ll only re-enrol you if you’re an eligible jobholder.

You can opt back in again if you’re still eligible and you’re under 75. To opt back into the LGPS please fill in our ‘Option to join and rejoin the main section form’. You’ll need to send this to your employer.