The retirement process

Here is a step by step guide of what to expect when you retire from the Local Government Pension Scheme (LGPS).

Step 1: Leaving employment

Your employer will send us your leaver form after you have left your job and received your final wages payment.

Step 2: We’ll work out your pension value

We’ll use the leaver form information to work out the value of your pension benefits. These figures are then double checked before being sent to you.

Step 3: Receiving your retirement pack

We’ll then send you a retirement pack. If you use Member Self Service (MSS) we will send you an email with instructions on how to access the pack. Otherwise, we’ll post it to your home address.

The retirement pack will include:

• Your pension figures and options
• Forms for you to complete and return
• A link of where to find our guide to retiring on our website

Your pension figures will show your main pension benefits, as well as any of the following you have paid:

• Additional voluntary contributions (AVCs)
• Additional pension contributions (APCs)
• Additional regular contributions (ARCs)
• Added years

You will need to use the figures in the pack to choose whether to turn some of your annual pension into a one-off lump sum.

For every £1 of annual pension you give up you will get a lump sum of £12.

You can’t turn all of your annual pension into a lump sum. The pack will show you the biggest lump sum you can have (including any AVCs), and the amount of annual pension you’d have left as a result.

Step 4: Making choices and filling in the forms

Please make sure you read your options letter carefully and choose the option you want. You will need to fill in and return the following forms:

• Retirement option form
• Personal details form
• Bank details form
• Previous pension benefits declaration form

You must also send us copies of any relevant certificates. For example, this could be your birth certificate, your partner’s birth certificate, your marriage certificate, civil partnership certificate or your final order. Note: a final order used to be called a decree absolute. For proof of date of birth, we can accept a photocopy of your driving licence or passport instead of a birth certificate.

If you use MSS, you can upload your completed forms and certificates to your account.

We must receive all your forms and certificates before we can start paying your pension.

Step 5: Processing your pension

After receiving your completed forms, Clwyd Pension Fund will work out your pension based on the choice you have made on your option form.

If you have paid AVCs, this takes longer because the AVC provider has to take the money from where it is invested before we can pay you any pension.

You may want to stop paying AVCs the month before your retirement date, as this could help speed up the dis-investment process.

Step 6: Paying the pension benefits to you

We will pay your pension and any lump sum to the bank details you’ve given us.

You’ll receive any lump sum within seven to ten working days of our final letter.

For your first pension payment, we will pay any arrears within two weeks of the date of your final letter.

Useful Information

After your first pension payment, you’ll receive your pension on the 28th of each month, or the Friday before if this is a weekend or Bank Holiday.

You might pay tax on your pension income. HM Revenue & Customs will let us know the tax code that we should use for your pension. This tax code tells us how much tax to take from your monthly pension payments.

You’ll receive your pension monthly for life.

If you use MSS, we’ll upload all future letters, pension payslips and P60s to your MSS account for you to view. Please log in by visiting here.

Make sure you let us know if any of your personal details change, such as your name, address or bank details.

We can pay your pension into an overseas bank account if you move abroad. You would need to get in touch to ask for the relevant form.

You may be aware that members of defined contribution pension schemes, where the benefits payable depend on how much they’ve built up in their pension pot, have more flexible options for receiving their income.

These options are:

• Buying an annuity, or annual pension, or scheme pension if offered by the scheme
• Flexi-access drawdown, which means taking income directly from savings, any amount at any time, while still investing the rest
• Taking a number of cash sums at different stages
• Taking the entire pot as cash in one go.

These options do not apply to defined benefit pension schemes, including the LGPS, so they do not apply to your LGPS pension benefits.

Sometimes a member’s annual pension may be such a small amount, they can choose to receive its value as a one-off payment. This is called trivial commutation.

We’ll check to see if you qualify for this option and, if so, we will include the figures in your pack.