Have you recently received a letter from us to say you've been auto enrolled? This section provides information about automatic enrolment and what it means for you.
Why have I been auto enrolled?
The Workplace Pension Law has changed. This new legislation requires all employers to automatically enrol employees into a qualifying pension scheme that meets certain minimum standards. A qualifying pension scheme is a way to save for your retirement, in which your employer contributes towards your retirement savings too.
You will be automatically enrolled into a qualifying pension scheme, if you:
- Work in the UK;
- Are not currently an active member of a qualifying workplace pension;
- Are aged 22 or over;
- Are under the state retirement age;
- Earn more than £9,440* a year
*from April 2013 - subject to change
From a date set by the Pension Regulator your employer will begin opting in employees who meet the criteria above, even if they have previously chosen not to join.
All staff affected will be written to explaining how the changes will affect them personally.
Why the Local Government Pension Scheme (LGPS)?
The LGPS is one of the most generous pension schemes in the UK. It is backed by the Government which means it is not subject to stock market conditions and it is calculated based on your salary and length of service.
Key benefits of the LGPS include:
- Contributions from your employer;
- Secure pension on retirement;
- Protection for your loved ones via ill health cover;
- The ability to nominate co-habiting partners to receive a pension - you do not need to be married;
- Death cover up to 3x your salary;
- Ability to translate some of your pension into a tax free lump sum on retirement;
- No hidden costs or charges - your contributions are based on the amount you earn; and
- The value of your pension is increased with inflation, meaning it keeps up to date with the cost of living
- Joining the LGPS comes at a low-cost to you, with tax-efficient savings and lower national insurance contributions for most people under the state pension age.
What you need to know
- Your employer cannot ask you or force you to opt out
- If you are asked or forced to opt out by your employer you can tell the Pensions Regulator
- If you change your mind you may be able to opt back in – please write to your employer if you want to do this
- If you stay opted out, your employer will normally put you back into pension in around 3 years
- If you change your job, your new employer will normally put you back into pension saving straight away
- If you have another job, your other employer might also put you into pension savings, now or in the future
I want to opt out, what do I do?
You may be thinking of opting out of the scheme, however there are a number of things to think about before you do. Listed below are 10 good reasons for staying in the scheme.
||Money From your Employer!
Your employer shares the cost!
||Tax Free Savings!
Tax Relief on all your contributions!
||Increased Quality of Retirement!
Start now for a bigger pension on retirement!
||No Investment Risk!
A pension based on your pay and length of service!
||Protection and Security!
Ill health, Family & Dependants!
||Life Cover - No Medicals Required!
Life cover of 3 years pay!
||No Hidden Fees or Charges!
You just pay a percentage of your pay!
||Tax Free Lump Sum!
Can be taken in addition to a regular pension!
||Pension Increased with Inflation!
The value of your pension in payment is protected!
||Saving for Retirement is Crucial!
Maintain your lifestyle in retirement!
Still want to opt out?
If you decide to opt out, you can opt back in at any time.
If you do decide to opt out you must do so within 3 months of joining the LGPS Scheme to receive a refund of your contributions. This will be refunded through your payroll if you have contributed for less than 3 months or via the LPFA if you have been contributing for more than 3 months but less than 2 years. If you have been in the scheme for more than 3 months, you'll get deferred benefits which you can take when you retire. If this applies to you we will write to you with more details once your employer tells us you have opted out.
Anyone who opts out will automatically be re- enrolled back in the Scheme, normally every 3 years.
Opt Out Form