Who Can Join?
The LGPS is available to county council and county borough council councillors in Wales where membership of the scheme is offered under the Council's allowances scheme.
If you are under age 75 and have been offered membership of the scheme, it is your decision whether to join.
If you choose to join, your membership will normally begin from the start of the first pay period after your election has been received.
The LGPS is a secure scheme because the benefits are guaranteed by law. The value of your benefits does not depend on stock market performance.
After your election, you should check your payslip to ensure that pension contributions are being deducted.
Important: You should complete a Death Grant Expression of Wish form as soon as possible so that we can take your wishes into account if a death grant becomes payable.
Scheme Highlights
- Tax-free lump sum when you retire.
- Annual pension based on your career average pay.
- The ability to increase your benefits by paying Additional Voluntary Contributions (AVCs).
- Voluntary retirement from age 55.
- Retirement from age 50 with your Council's consent.
- Ill-health retirement at any age.
- A death in service grant of twice your career average pay.
- A pension for a spouse or civil partner, together with eligible children's benefits.
- Benefits that increase in line with inflation.
- Tax relief on your pension contributions.
How Are the Benefits Calculated?
Your annual pension is calculated as:
LGPS Membership ÷ 80 × Career Average Pay
In addition to your pension, you will also receive an automatic lump sum equal to three times your annual pension:
Lump Sum = 3 × Annual Pension
What is Career Average Pay?
Your Career Average Pay is based on all salary or allowances on which you have paid pension contributions during your membership.
Each year's earnings are adjusted for inflation using the Retail Prices Index (RPI). The adjusted earnings are then added together and divided by your total period of membership.
The resulting figure is used to calculate your pension benefits.
Example
| Year | Adjusted Pay |
|---|---|
| 1 | £12,250 |
| 2 | £12,750 |
| 3 | £13,250 |
| 4 | £13,750 |
| 5 | £14,250 |
Total: £66,250
£66,250 ÷ 5 = £13,250
In this example, £13,250 would be the Career Average Pay used to calculate the pension benefits.
Commuting Your Pension
When you retire, you can exchange part of your annual pension for an additional lump sum.
You will receive £12 of lump sum for every £1 of annual pension given up.
You can take up to 25% of the value of your pension benefits as a tax-free lump sum, subject to UK tax rules and limits.
Important: There is a limit on the amount of tax-free lump sum that can be taken from UK pension schemes. If you have previously taken pension benefits, you may already have used part of your lump sum allowance.