The MAIN section of the scheme is the section you will be placed in automatically from when you join the LGPS, where you pay normal contributions and receive the normal build up of pension. This is calculated using 1/49th of your annual pensionable pay (CARE pay).
The 50/50 section is a new option (since 01/04/2014) which you can opt to join. If you do so, you will then pay half contributions but build up half the normal pension. This is calculated using 1/98th of your annual pensionable pay (CARE pay) instead of the 1/49th in the MAIN scheme.
If you have more than one employment you can elect for the 50/50 option in one, some or all your employments. However, regardless of the section you are in, you get full life assurance cover and you are fully protected under ill-health retirement regulations.
How much does it cost?
The rate of contribution you pay will be based on your actual pensionable pay, and there are nine different contribution rates ranging from 5.5% to 12.5% in the MAIN scheme and 2.75% to 6.25% in the 50/50 scheme. Your employer will assess the rate of your contributions for each employment based on your actual pensionable pay in each single employment.
If you earn enough to pay tax then you will be subject to tax relief, meaning if you are a standard rate tax payer, every £1 you contribute into your pension only costs you 80p after this tax relief, and if you are a higher rate tax payer you get tax relief at that higher rate.
Contribution rates 2022/2023
These are based on the pay bands for 2022/2023, please find below the updated contributions table which will take effect from 1st April 2022.
|Actual Pensionable Pay for an employment||Contributions rate for MAIN scheme Benefits||Contributions rate for 50/50 scheme benefits|
|Up to £15,000||5.50%||2.75%|
|£15,001 to £23,600||5.80%||2.90%|
|£23,601 to £38,300||6.50%||3.25%|
|£38,301 to £48,500||6.80%||3.40%|
|£48,501 to £67,900||8.50%||4.25%|
|£67,901 to £96,200||9.90%||4.95%|
|£96,201 to £113,400||10.50%||5.25%|
|£113,401 to £170,100||11.40%||5.70%|
|£170,101 or more||12.50%||6.25%|
What is the difference between the contributions I pay and my pension?
Your contributions and your pension in the LGPS are different. Often people think that their contributions are their pension – but your contribution is "a contribution" towards the cost of the pension scheme similar to that of your employers contributions, where both guarantee you a pensionable benefit.
LGPS contribution calculator
By clicking the link below, you will be able to calculate what contributions you will pay on a monthly basis by simply inputting your annual pensionable pay, pay frequency and whether you are in the MAIN or 50/50 scheme.
As well as your contribution, your employer also contributes to the fund, and is responsible for ensuring there is enough money at the time you retire to pay your pension.
Every three years, an independent actuary calculates how much your employer should contribute to the scheme. Your pension is worked out using a defined formula which is used to work out what your pension will be when you retire.
These contributions are paid to the Clwyd Pension Fund, and cover the cost of the scheme (which includes paying out pensions and death grants).
Refund of contributions
If a member does not meet the vesting period and elects to take a refund of contributions this refund shall include:
- All pension and AVC contributions paid
- Less a deduction of tax (20%) as all contributions were subject to tax relief when contributed.
- Less the cost to re-enter into the state pension.
Re-entering the State Second Pension
For any LGPS membership prior to 05/04/2016, members would have received a rebate upon any national insurance contributions, meaning that you would have not been building up much (if any) additional state pension during this period. If you receive a refund of these memberships contributions, you shall have to reinstate this lost national insurance which will be incorporated into the total refund.
Following the refund
Upon receipt of the refund of contributions, the member extinguishes any rights or entitlement to a pension benefit in the LGPS
Please be aware that if you do not make a decision regarding your refund of contributions within 5 years of leaving the LGPS or before you reach 75 years old, this refund of contributions will be automatically paid to you.
Opting Out of the scheme
If you no longer wish to be a member of the LGPS but wish to continue working in your post, you can opt out and no longer pay any contributions. The below link will open the Opt Out form which can be completed and sent directly to your employers payroll department NOT the Clwyd Pension Fund.
If you opt out with under three month's membership in that position, you will receive a refund of contributions from your employer, this will appear in your next payslips.
Alternatively, if you have over three months service but under 2 years service, you may be eligible for a refund of contributions, however, this process will be led by the Clwyd Pension Fund who will write out to yourself with all relevant options in the weeks following you opting out of the scheme.
Alternatively, you can opt to pay 50% of the contributions to accrue 50% of the benefits by opting into the 50/50 scheme.
The Clwyd Pension Fund process
Following notification from the employer that a member leaves or opts out of the pension scheme in an individual post, the Clwyd Pension Fund would write to the member providing them with all available options in the form of an ‘Initial Leavers Form’.
If the member elects for a refund of contributions then they must sign and date the Leavers Option Form subject to the following statements being valid:
- One month and two days have passed between leaving the LGPS and receiving the refund, and
- You have not commenced employment with another authority within 1 month and 1 day of leaving LGPS, and
- You do not have any other LGPS benefits elsewhere (any other LGPS benefits would be cancelled out by taking a refund)
You are not entitled to a refund if you become active again before receiving the refund.
If all are correct, the member must sign and date the Initial Leavers Option Form’ along with a completed ‘Refund Bank Form’ including details of where they wish the payment to be made. Once returned to the Clwyd Pension Fund using a supplied pre-paid envelope, the Clwyd Pension Fund shall be able to refund the contributions.