Leaving before retirement or opting out

The lowest age you can retire from the Local Government Pension Scheme, or LGPS Councillor, is currently age 50. However, you need your council’s agreement to retire before age 55. The UK Government has announced that the earliest age you can take your pension will increase from age 55 to 57 with effect from 6th April 2028. This does not apply if you have to take your pension early due to ill health.

You could be protected from this increase if you joined the LGPS in England and Wales before 4th November 2021. However, you will only be able to use this protection when you take your LGPS pension, if the LGPS rules allow you to take your pension before age 57.

The UK Government makes the LGPS rules. It has not yet confirmed if it will allow members who qualify for protection to take their LGPS pension before age 57, from 6th April 2028.

Currently, if you stop contributing into the pension scheme before retirement age, you will only have a few options to choose from. You may have stopped either because you are no longer a councillor or because you opted out of paying any more contributions.

Where age 55 is mentioned on the rest of this page, please remember this will change to 57 from 6th April 2028.

Refund

If you have paid LGPS contributions for less than three months, whether you are under or over age 50, you will not have built up a pension benefit.

As long as you don’t have any other pensions in the LGPS in England or Wales, you can have a refund of your pension contributions less 20% tax.

You should claim your refund as soon as possible after stopping your pension contributions, and before you reach age 75.

If you opt out within 3 months of joining LGPS Councillor, your council’s payroll department will refund your contributions through your pay. All other refunds will come from the Clwyd Pension Fund.

Deferred Pension

If you have more than three months LGPS Councillor membership and are under age 55 (or under age 50 if retiring with your council’s consent), you will have a deferred pension in LGPS Councillor. Read how we work this out at working out your deferred councillor pension.

Your deferred pension benefits will increase each year in line with the cost of living.

Your normal retirement age is 65, although you can ask to receive your deferred pension any time from age 55.

If you want to take your pension between ages 50 and 55, you need written agreement from your council before asking the Clwyd Pension Fund to pay it to you. If your council agrees, this may result in a tax charge on your pension benefits.

If you take your pension before reaching normal retirement age, the pension will be reduced for taking it early. We will send you a retirement pack including your pension figures, and details of any reduction.

If you have to stop being a councillor because of ill health, you can start your pension at any age so long as your council agrees that you can receive it.

Once the pension is in payment, it will keep increasing each year in line with the cost of living. The pension will be paid to you for life.

You also have the option of transferring your deferred pension to another pension scheme.

Transfer out

You must make any transfer at least 12 months before reaching normal retirement age.

You can find more details about transferring out here.

Opting out

If you choose to opt out of paying LGPS Councillor contributions, you will either have a refund of contributions, a deferred pension, or a transfer out, as we explain above.

Remember that if you choose to opt out, you will have a lower pension income when you retire, and you will not qualify for death in service or ill health retirement benefits. If you do want to opt out, you can find the opt out form here.

If you opt out once, you can opt back into LGPS Councillor at any time if you are still a councillor and under age 75.

If you opt out of LGPS Councillor for a second time (or more), you will only be allowed to rejoin if your council agrees, unless you are opting back into the scheme within three months of starting at a new Welsh council.

You can ask your council for their policy on this.