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Deferred Pensioner Annual Benefit Statements FAQs

This page answers some of the questions members ask when they receive their Deferred Annual Benefit Statement.  If you have a question which is not answered below, please contact us

 

When will my benefits be paid?

Can I take my benefits before age 60?

Can I cash in my deferred benefits?

How are my deferred benefits calculated?

Are my deferred benefits protected against inflation?

What is the Surviving Spouse's/Partner's Pension?

How much pension can I exchange for a larger lump sum?

Can I start paying into the scheme again?

I have joined a different pension scheme.  Can I transfer my LGPS benefits to my new scheme?

Where can I find notes and conditions for the Lump Sum Death Grant?

Where can I find more information on data sharing?

Where can I find more information on the State Pension and COPE?

I've moved house.  How do I let Bedfordshire Pension Fund know?

 

 

When will my benefits be paid?

The date that your benefits are payable from, as shown on your statement, is the date that your benefits are payable in full and is called your Normal Pension Date.

 

If you left the scheme before 1 April 2014

Your Normal Pension Date depends on your length of service, and when you joined the scheme. 

If your Normal Pension Date falls after age 60, you can choose to receive your benefits at any time from age 60 and before your Normal Pension Date.  However, the benefits will be reduced to reflect the early payment.  The amount of the reduction depends on how many years before your Normal Pension Date you choose to start receiving your benefits.  The table of reductions is shown below:

Years Early

Pension Reduction Men

Pension Reduction Women

Lump Sum (for membership to 31 March 2008)

1

5.6%

5.2%

2.9%

2

10.8%

10.1%

5.7%

3

15.5%

14.6%

8.5%

4

20%

18.8%

11.2%

5

24%

22.7%

13.7%

Please note that these reduction factors are subject to change.  If you choose to take your benefits before your Normal Pension Date then your pension will be reduced in accordance with the national factors applicable at the time your benefits are put into payment.

If you would like to claim your benefits at a date earlier than your Normal Pension Date, in order to start the process you will need to write to us at least 2 months before the day you would like to receive your benefits.

 

If you left the scheme after 31 March 2014

Your Normal Pension Date is linked to your State Pension Age.  As a result it may change in line with any future increases to the State Pension Age.  You can choose to receive your benefits at any time from age 55 and before your Normal Pension Date.  However, the benefits will be reduced to reflect the early payment.  The amount of the reduction depends on how many years before your Normal Pension Date you choose to start receiving your benefits.   You can view the table of reductions here.  Please note that, depending on the dates when you were paying into the scheme, there may be protections in place for some of your benefits so we recommend that you write to us to request an estimate if you are thinking of drawing your benefits before your Normal Pension Date. 

If you would like to claim your benefits at a date earlier than your Normal Pension Date, in order to start the process you will need to write to us at least 2 months before the day you would like to receive your benefits.

 

Can I take my benefits before age 60?

If you left the scheme after 31 March 2014 then you can choose to receive your benefits at any time from age 55, although the benefits will be reduced to reflect the early payment (see question When will my benefits be paid? above).  

If you left the scheme before 1st April 2014, in exceptional circumstances deferred benefits may be payable between age 55 and 60, but this is only possible with the permission of your former employer and depends on when you left the scheme.  Your former employer will have a policy on this and you will need to approach them for details of their policy.

Benefits may be payable from any age on grounds of ill health.   There are rules about when benefits can be paid early on ill health grounds.  If you think you may be eligible to receive early payment of your benefits because of ill health you will need to approach your former employer in order to be assessed by a specially qualified doctor.

 

Can I cash in my deferred benefits?

If you have a deferred benefit, which means that you paid into the LGPS for a certain length of time, then you will not be able to have a refund of the contributions you paid.

Under the LGPS regulations you can choose to transfer the value of your accrued pension rights to another occupational pension scheme, to a personal pension, to a stakeholder pension scheme or a buy-out insurance policy or you can leave the benefits in the Bedfordshire Pension Fund until you reach retirement age. 

Transferring your LGPS benefits, particularly to a personal pension or money purchase arrangement, is a serious matter.  Care should be taken to avoid unauthorised companies and you should obtain genuinely independent financial advice before you make a decision to transfer your preserved benefits.  More information can be found on the following websites: 

 

The Pensions Advisory Service - Transferring your pension

The Pensions Regulator - dangers of pensions scams

 

How are my deferred benefits calculated?

Depending on when you left the LGPS your deferred benefits will have been calculated using different methods.  For membership up to and including  31 March 2014, benefits are calculated using the Final Salary method.  For membership from 1 April 2014, benefits are calculated using the Career Average Revalued Earnings (CARE) method.

For membership up to 31 March 2008: Your benefits are calculated as 1/80th of your final salary for each year that you were a member of the scheme.

For membership from 1 April 2008 to 31 March 2014: Your benefits are calculated as 1/60th of your final salary for each year you were a member of the scheme.

If you worked part time before 1 April 2014, your membership is scaled down to reflect your part time working hours.  For example, if you worked 50% of full time, for each year that you worked you would have built up half a year's membership. 

The 'final salary' used to calculate benefits built up before 1 April 2014 is usually your pensionable pay in respect of your final year of scheme membership.  If you were part time, the whole time pay is used. 

For membership from 1 April 2014:  Your benefits are calculated as 1/49th of your pensionable pay in each year that you are a member of the scheme.  

'Pensionable pay' is pay on which you have paid pension contributions. 

 

Are my deferred benefits protected against inflation?

The deferred benefits you have in the LGPS are index-linked, which means that they increase each year in line with the cost of living and are protected against inflation.

The increase that is applied to your deferred benefits each year is called Pensions Increase and the amount of the increase varies from year to year.  Before April 2011, deferred pension benefits were increased annually each year in line with the Retail Prices Index (RPI).  From April 2011 onwards public sector pension benefits have been increased annually in line with the rise in the Consumer Price Index (CPI).  

In 2016, public sector pensions did not receive any increase because CPI in the 12 months to September 2015 (which determines Pension Increase for the following April) was a negative figure.

Pensions Increase in 2017 is 1%.

 

What is the Surviving Spouse's/Partner's Pension?

This is the annual pension that will be payable to a spouse/partner if you die before them.  The amount of the spouses pension will depend on when you were a member of the scheme and when you married.  The value of your other benefits is not affected by whether or not you have a spouse.  More information on spouse/partner pensions can be found on the national lgps website.  See our page on co-habiting partners for the conditions that need to be met in order for a co-habiting partner to receive a survivor's pension.

 

How much pension can I exchange for a larger lump sum?

If you joined the LGPS before 1st April 2008 you are entitled to receive a one-off, tax free Lump Sum Retiring Grant based on your membership built up before 1st April 2008.  This is in addition to the annual pension.  Under current regulations, when you draw your benefits you have the option to exchange some of your annual pension for extra tax free lump sum.  For every £1 of annual pension you give up you will receive £12 lump sum.

If you joined the LGPS after 1st April 2008 your benefits do not include a Lump Sum Retiring Grant. However, under current regulations, when you draw your benefits you will have the option to exchange some of your annual pension for a one-off tax free lump sum.  For every £1 of annual pension you give up you will receive £12 lump sum.

There are limits to how much pension you are allowed to give up in order to have a larger lump sum.  We need to do individual calculations to work out the maximum lump sum you can receive and we are not allowed to give out this information over the telephone.  If you would like more information on how much pension you can exchange for a larger lump sum amount, please write to or email us with details of your request and we will send the information out by post to your home address. 

 

Can I start paying in to the scheme again?

You can only contribute to the LGPS if you are employed by a Local Government employer or if you employer has chosen to participate in the LGPS.

 

I have joined a different pension scheme.  Can I transfer my LGPS benefits to my new scheme?

It is possible to transfer your benefits to another pension scheme.  You will need to inform your new pension scheme administrators that you are interested in transferring benefits to them.  Transferring your LGPS benefits, particularly to a personal pension or money purchase arrangement, is a serious matter.  Care should be taken to avoid unauthorised companies and you should obtain genuinely independent financial advice before you make a decision to transfer your preserved benefits.  More information can be found on the following website: 

The Pensions Advisory Service - Transferring your pension

 

Where can I find notes and conditions for the Lump Sum Death Grant?

Please see our page on the Lump Sum Death Grant for more information about this benefit

 

Where can I find more information on data sharing?

You can view our pages on the National Insurance database and the National Fraud Initiative for more information on data sharing.

 

Where can I find more information on the State Pension and COPE?

Please see our page on Contracting Out, COPE and the State Pension.

 

I've moved house.  How do I let Bedfordshire Pension Fund know?

We are not able to take changes of address over the phone therefore you will need to write to us or email us to let us know your new details.  Please see our contacts page for details of how to get in touch.