If you no longer wish to contribute to your employer's pension scheme, you can opt out but will be automatically re-enrolled every three years, although you can then choose to opt out again. You can opt out of the Scheme at any time but you must have already started that job to do so.
Once opted out, you will end any active member protections for your family, plus you may pay more tax.
If a member outs out of the LGPS within 3 months of joining, the refund of contributions shall be granted through the employer’s payroll department in their next pay.
Any opt outs following this 3 month period or if you leave your employment before reaching your vesting period, a possible refund may be payable via the Clwyd Pension Fund subject to certain criteria.
In the scheme for more than 3 months but less than 2 years
If you opt out of the Scheme with less than 2 years membership you may be entitled to a refund of your pension contributions, less a deduction for tax and a further deduction to buy you back into the State Second Pension (if applicable).
If you are eligible to receive a refund of pension contributions, you will receive the refund minus tax and possibly an amount of additional national insurance. This is due to the contributions being relieved of tax when they are paid into the Clwyd Pension Fund, whilst prior to April 2016 you would have paid lower National Insurance contributions than if you had not been an LGPS member. This deduction is to ensure that you are re-instated in the State Second Pension (S2P) for the sustained period where you paid reduced National Insurance contributions.
In the scheme for more than 2 years
If you opt out with 2 years or more membership you would not be entitled to a refund, and will be awarded with a deferred benefit. The amount you held in your pension account up until date of leaving, is calculated and kept within the fund until you retire or transfer to another pension arrangement.
If you have opted out of the LGPS and continue to work in that position, you will not be able to access your pensionable benefits until you end your employment in that single position.
Refund by employer
If a member outs out of the LGPS within 3 months of joining, a refund of contributions shall be granted through the employer’s payroll department in their next pay packet.
Refund by Clwyd Pension Fund
Any opt outs following this 3 month period or if a member leaves employment before reaching their vesting period, the refund process shall be actioned by the Clwyd Pension Fund.