Retirement Options & Benefits Available
Retirement Options available
- When can I retire?
- Can I retire early?
- Will my pension and lump sum be reduced if I choose to retire early?
- What happens if I have to retire due to ill health?
- What happens if I carry on working after age 65?
Retirement Benefits available
- What will my retirement benefits be?
- How much will my pension be?
- How much will my lump sum be?
- Can I give up some of my pension to increase my lump sum?
Retirement Options Available
You can retire and receive your Local Government Pension Scheme (LGPS) benefits in full from age 65. The scheme also makes provisions for the early payment of your LGPS benefits. To find out more please see the Councillor Guide to the Local Government Pension Scheme.
If you have at least three months total membership you can, upon retirement from your office on or after age 55, elect in writing to your council to receive your LGPS benefits. Between and including the ages of 50 and 54 you may also elect to receive your LGPS benefits, but only if your council gives their consent.
If you join the LGPS after 30 September 2006 and retire before age 65, your pension and lump sum will be reduced. The reduction is calculated in accordance with guidance issued by the Government Actuary. If you were contributing to the scheme on 30th September 2006 some or all of your benefits paid early could be protected from the reduction. To find out more please see the Councillor Guide to the Local Government Pension Scheme.
If you have at least three months total membership or have brought a transfer value into the LGPS and an administering authority approved independent registered medical practitioner certifies that you have become permanently unable until your 65th birthday to perform the duties of your office efficiently because of ill health or infirmity of mind or body, you will receive your pension and lump sum immediately.
The medical practitioner must be qualified in occupational health medicine and must not have previously been involved in your case.
If you carry on in office after age 65 you will continue to pay into the scheme, accruing further benefits. You can receive your pension when:
- you retire, or
- you reach the eve of your 75th birthday,
which ever occurs first.
If you draw your pension after age 65, the pension you accrued prior to age 65 will be increased to reflect the fact that it will be paid for a shorter time.
Your pension has to be paid before your 75th birthday.
Retirement Benefits Available
When you retire, you will receive a pension and a tax free lump sum from the LGPS. At state pension age you will also receive the basic flat rate state pension if you have paid sufficient National Insurance contributions during your working life. More details regarding your state pension can be found on the Government website.
Your pension is based on your total membership and your career average pay.
The lump sum automatically paid on retirement is three times your annual pension and is tax free. Like your pension, it is based on your career average pay and your total membership.
For further information on how your pension and lump sum will be calculated, please see the Councillor Guide to the Local Government Pension Scheme.
If you draw your benefits on or after 6 April 2006, you will be able to exchange some of your pension to receive a larger tax-free lump sum.
You will be able to take up to a maximum of 25% of the capital value of your pension benefits as a tax free lump sum or, if lower, 25% of the lifetime allowance less an adjustment for the value of any other pension benefits you are already drawing. The lump sum automatically paid on retirement roughly equates to 15% of the capital value.
Any amount you take as a lump sum above the automatic lump sum would be achieved by exchanging part of your annual pension for a one off tax-free cash payment – for each £1 annual pension given up you will receive £12 lump sum. You may not reduce your pension to below your Guaranteed Minimum Pension.
To find out more please see the Councillor Guide to the Local Government Pension Scheme.