What does the Scheme provide?

You'll be able to give up some of your annual pension for a tax free cash lump sum when you retire. This is subject to tax limits.

If you have service before 1 April 2008, you'll have an automatic tax free cash lump sum. You may also be able to give up some of your pension to increase this.

For more details on tax limits, visit the HMRC website.

You benefit from tax relief and lower National Insurance contributions because the LGPS is contracted out of the State Second Pension (S2P).

The amount of growth in your pension which is allowed tax free is limited through an annual allowance (AA) and the total amount of any pension benefits you can build up in a lifetime tax free is also subject to a lifetime allowance (LTA) test. 

For more details on your allowances, visit our 'Tax allowances' page.

A ‘defined benefit’ scheme means it’s not based on investment performance. Although you and your employer pays into the scheme, we’ll use a ‘defined formula’ calculation to work out how much you’ll get and we’ll promise to give you a guaranteed future income each year when you retire.

Opt to pay less in the 50:50 Section

You can choose to pay half your normal contribution for half the amount of pension. This is called the 50:50 Section, which allows you to keep paying into the Scheme when things are difficult financially.

This is designed to be a short term option, meaning that you’ll be re-enrolled into the Main Section automatically at your next ‘auto-re-enrolment’ date (this will occur within 3 years of joining the 50:50 Section). Following re-enrolment, you can then make a further election to re-join the 50:50 Section.

Your ill health and death benefits will remain unchanged.

To join the 50:50 Section of the Scheme, complete our 50:50 Section form.

Opt to pay more by buying Additional Pension Contributions or Additional Voluntary Contributions

There are many reasons you might want to increase the benefits you'll receive at retirement. Perhaps you’d like to be able to retire earlier, or you feel you need to compensate for a career break. Maybe you’d just like a higher standard of living when you retire.

There are two ways to increase your retirement benefits in the Local Government Pension Scheme (LGPS):

• You could pay additional pension contributions (APCs) and/or
• You could pay additional voluntary contributions (AVCs) to the EAPF’s In-House AVC providers, Prudential and/or Standard Life

APCs allow you to buy additional pension which is paid with your annual pension when you retire. You can buy additional pension by paying APCs regularly, over a period of time, or you can buy additional pension by paying in a one-off lump sum.

AVC payments are made to Prudential or Standard Life, the EAPF’s in-house AVC providers. They invest any money you pay into a personal account. Over time, this builds up with your contributions and investment returns. You’ll be able to choose how your money is invested, as each provider offers a range of different funds to invest in.

For more details about boosting your pension, see our 'I want to pay more into the scheme' page.

You can also read our 'Topping up my pension' factsheet for details about paying in more.

If you choose to increase your pension benefits by either of these options, you benefit from tax relief at your marginal rate of tax. However, you should think carefully about any decision to pay extra contributions, and you may wish to take independent financial advice. You'll find a list of independent financial advisers in your area by visiting the Money Advice Service website.

The LGPS provides you with death benefits, including a lump sum should you die whilst contributing to the Scheme. This includes a lump sum death grant of 3 times your ‘assumed pensionable pay’ Assumed pensionable pay (APP) (an average of the pensionable pay you received during the 3 months immediately before your death) and spouse/civil partner/cohabiting partner’s pension and eligible children’s pension.

If you have to retire because of ill health the LGPS provides benefits for you. These may be enhanced depending on how severe your condition is.