If you leave the pension scheme before you are entitled to have your pension benefits in payment, you will become entitled to deferred pension benefits. These will increase each year in line with inflation.
Your benefits are calculated when you leave the fund, based on how long you have been a member and your final pay. Your final pay is an average of your pensionable pay in the last 365 days of your employment. Pensionable pay is your normal wages plus any shift allowances, bonuses, contractual overtime and any other taxable benefit specified in your contract as being pensionable.
They are then held in the fund where they increase in value every year in line with the cost of living, until they start to be paid.
If you joined the fund for the first time on or after 1 April 2008, your benefits are calculated as:
Annual Pension = Total membership / 60 x final pay
You can exchange part of your annual pension for a one off tax-free cash payment. You can take up to 25% of the capital value of your pension benefits as a lump sum and you will receive £12 lump sum for each £1 of pension given up. However there are HMRC restrictions on the maximum amount of lump sum an individual may convert.
If you have membership before 1 April 2008, the benefits you earned before 1 April 2008 are calculated as:
Annual Pension = Total Membership / 80 x final pay
Lump sum = Total Membership / 80 x final pay x 3
can exchange part of your annual pension for a one off tax-free cash payment. You can take up to 25% of the capital value of your pension benefits as a lump sum and you will receive £12 lump sum for each £1 of pension given up. However there are HMRC restrictions on the maximum amount of lump sum an individual may convert.
If you have membership both before and after 1 April 2008 the two amounts of pension benefits will then be added together to give you your total benefits.
Working part time or term time
If you work part time or term time the pay used to calculate your benefits will be your full time equivalent pay. Your membership will be the actual hours you worked.
Re-joining the LGPS at a later date
If you re-join the LGPS you will begin to build up membership towards a new set of benefits, in addition to your existing deferred benefits.
You will usually have the option of keeping these two sets of benefits separate or joining them together to form just one set of benefits. You normally only have 12 months from the date you re-join to choose to link your deferred membership to your new membership, so you should ask your new employer about this as soon as possible.
When can I take my benefits?
The normal retirement age for the fund is 65. This is the age you can retire and take your benefits in full.
Taking my benefits early
You may receive your deferred benefits from the age of 60 but they are likely to be reduced to take account of early payment. The level of reduction depends on how early you take your benefits.
Deferred benefits may come into payment from age 55 however you must have your previous employer’s permission and they must have a policy for this. If you become ill you may request for your deferred benefits to come into payment. This request must be sent to your employer in writing.
You can transfer your benefits to any other pension scheme as long as the new scheme is willing to accept the transfer.
- If you want to transfer your benefits you should tell your new scheme that you hold benefits within the Suffolk Pension Fund.
- They will approach us for a transfer value and let you know what the benefits are worth in their scheme.
- Your new employer or pension scheme will then work with you over whether or not you wish to go ahead with the transfer.
- If you decide that you want to go ahead with the transfer they will ask us to pay the transfer payment over to your new pension scheme.
Deciding to transfer your benefits is an important decision. You may wish to take independent financial advice.
If you die before you receive your deferred benefits, the fund makes sure that your family is supported.
Depending on your circumstances it can provide:
Lump sum death grant
If you die before you have taken your deferred benefits we will pay a lump sum death grant.
- If you left before 1 April 2008 a lump sum of 3 times your deferred pension is paid
- If you left on or after 1 April 2008 a lump sum of 5 times your deferred pension is paid
You can tell us who you would like the lump sum death grant paid to by using the Death grant nomination form.
If you die before you take your deferred benefits, we will pay a pension to your husband/wife, your civil partner or your nominated cohabiting partner. Dependent children may also be entitled to a pension.
Amount of survivor's pension:
- For your husband or wife: The pension payable is normally calculated as Total Membership / 160 x final pay unless you marry after leaving, in which case it could be less. If you marry while your pension is deferred:
- For your nominated co-habiting partner: Membership in the scheme before 5 April 1988 is not used in the calculation.
If you would like benefits to be paid to a cohabiting partner they will need to meet certain criteria and you must have completed a nomination form.
These are payable to eligible children and increase every year in line with the cost of living.
The benefits are based on your final pay and the membership yo
The amount of pension depends on the number of eligible children you have:
- If a survivor's pension is being paid to your husband, wife, civil partner or nominated co-habiting partner, one child would receive 1/320th of your final pay times the membership your deferred pension is based on, while two or more children would receive 1/160th shared equally between them.
- If there is no husband’s, wife’s, civil partner’s or nominated co-habiting partner's pension being paid, one child would receive 1/240th of your final pay times the membership your deferred pension is based on, while two or more children would receive 1/120th shared equally between them.