What if you are paying extra?

This section looks at what happens if you were paying extra when you draw your pension benefits due to voluntary, flexible, redundancy or business efficiency retirement. For ill health retirement please refer to the section on ill health retirement.

Buying extra pension by paying Additional Pension Contributions (APCs) or Shared Cost Additional Pension Contributions (SCAPCs)

If you are buying extra LGPS pension either by regular payment or you made a one-off lump sum payment, when you draw your pension this will include the extra pension that you have paid for. If you choose to retire early and draw your benefits before your Normal Pension Age, or you are retired on redundancy or business efficiency grounds before your Normal Pension Age, the extra pension you have bought will be reduced for early payment.

If you draw your benefits on flexible retirement, you can, if you wish, draw all the extra pension you have paid for too, although it will be reduced for early payment. If you do so, your APC contract and / or SCAPC contract will cease (if you are still paying these extra contributions when you draw your benefits) although you will be able to take out a new APC contract (provided you are at least one year before your Normal Pension Age if you want to pay the APCs by regular contributions) or, subject to your employer's discretions policy, a new SCAPC contract.

If you draw your pension after your Normal Pension Age, the amount of any extra pension you have bought will be increased as its being paid later.

You can choose to exchange some of the extra pension you have bought for a cash lump sum in the same way as your main LGPS pension.

Buying extra LGPS pension by paying Additional Regular Contributions (ARCs)

When you draw your pension you will be credited with the extra pension that you have paid for. This will increase the value of your retirement benefits. If you choose to retire early and draw your benefits before age 65, or you are retired on redundancy or business efficiency grounds before that age, the extra pension you have bought will be reduced for early payment.

If you draw your benefits on flexible retirement, you can, if you wish, draw all the extra pension you have paid for, although it will be reduced for early payment. If you choose to draw the extra pension on flexible retirement, your ARCs contract will cease (if you are still paying these extra contributions when you draw your benefits).

You can choose to exchange some of the extra pension you have bought for a cash lump sum in the same way as your main LGPS pension.

If you are buying extra years in the LGPS (Added Years)

You will be credited with the extra years of membership that you have paid for and you will receive extra retirement benefits calculated on the same basis that you agreed to buy them. This extra membership is worked out using your final pay when you leave and is included in your membership built up in the scheme before April 2014. For further information on how this is worked out see the section how is your pension calculated.

If you retire early because of redundancy or business efficiency whilst paying for extra years, you will have the opportunity to pay the remaining contributions due in a lump sum in order to complete your contract.

If you draw your benefits on taking flexible retirement and you elected before 1 October 2006 to commence your added years contract you will be credited with the extra years of membership that you have paid for and this will increase the value of your benefits paid on flexible retirement. If you elected on or after 1 October 2006 to commence your added years contract, you can, if you wish, choose to be credited with the extra years of membership that you have paid for at the point of flexible retirement and this will increase the value of your benefits paid. If you choose to be credited with the extra years of membership on flexible retirement, your added years contract will cease (if you are still paying these extra contributions when you draw your benefits). If you do not choose to be credited with the extra years of membership on flexible retirement, your added years contract will continue.

If your benefits when you draw them are reduced for early payment then your benefits from the added years are reduced in the same way. The reduction is applied based on the Normal Pension Age applicable to benefits built up before April 2014.

If you are paying Additional Voluntary Contributions (AVCs) arranged through the LGPS (in-house AVCs)

Your contributions will cease when you cease to contribute to the LGPS (or cease two days before age 75 if you carry on in work beyond that age). However, if you draw benefits on flexible retirement and your AVC contract started on or after 13 November 2001 you can choose to take all of your AVC fund at the time you draw your flexible retirement benefits, and, if you wish, continue paying AVCs. If your AVC contract started before 13 November 2001 your AVC contract will cease and you will have to use all of your AVC fund at the time you draw your flexible retirement benefits. The ways that you can use your AVC fund are detailed in the section AVC options.

If you leave before retirement, your contributions will cease when you leave. The value of your AVC fund will continue to be invested until it is paid out. Your AVC plan is similar to your main LGPS benefits: it can be transferred to another pension arrangement or drawn at the same time as your LGPS benefits.