Coronavirus (COVID-19) FAQs for LGPS members
I am concerned about my financial situation because of COVID-19 - what can I do?
Can I stop my pension contributions?
Yes, but you might want to consider joining the 50/50 section of the LGPS instead of opting out. If you do, you'll pay half your normal contribution rate and build up half your normal pension. You will retain full life and ill health cover and you can move back to the main section whenever you are ready.
You can use the contributions calculator to check what difference this would make to your take home pay.
If after considering the 50/50 section you decide you would like to opt out, you can obtain an opt out form by contacting your local LGPS fund. You should take independent financial advice before deciding to opt out.
The coronavirus pandemic is affecting stock markets, will this affect the value of my LGPS pension?
No, the LGPS is a defined benefit pension scheme which means your pension is based on your salary and how long you've paid in. Your pension is not linked to stock market performance, so both your contributions and your pension, whether in payment or not, will be unaffected.
The only exception to this is Additional Voluntary Contributions (AVCs). If you have an AVC, it is possible the value may have reduced - this will depend on the funds you have chosen to invest in. You should contact your AVC provider for more information about this.
I am receiving a pension from the LGPS, will my pension still be paid to me?
Yes, your local LGPS fund will prioritise paying pensions during these uncertain times.
If my pay is reduced, what impact will this have on my pension?
This will depend on the reason for the reduction:
If your pay is reduced or you receive no pay because you are off work due to sickness or injury, your pension builds up as if you were at work receiving normal pay.
You will continue to pay contributions on any pay you receive during your sick leave.
Authorised unpaid leave
If your employer allows or requires you to take a period of unpaid leave, you will not build up any pension for the period unless you choose to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost.
If you choose to pay APCs to purchase the amount of pension lost and you make your election to do this within 30 days of returning to work, the cost will be split between you and your employer.
Visit Additional Pension Contributions to find out more about APCs, use an online calculator and download an application form.
Coronavirus job retention scheme
The Government has confirmed that they do not expect public sector organisations, such as councils, to use the coronavirus job retention scheme, except in some very limited cases. Public sector employers should continue to pay staff in the normal way even if they are not at work.
If your employer is able to use the job retention scheme and you both agree, your employer might be able to keep you on the payroll if they're unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being 'on furlough'.
If this applies to you, your employer could pay 80% of your wages up to a monthly cap of £2,500. The Government will fund your employer to do this. Employers can choose to top up your pay to 100%, but if you receive less pay when you are 'on furlough', the amount of pension you build up during this period will also be reduced. You will continue to pay pension contributions on the pay you receive.
You can pay Additional Pension Contributions (APCs) to buy extra pension to make up for the pension lost during this period. Your employer does not have to pay towards the cost, but they can choose to.
Visit Additional Pension Contributions to find out more abut APCs, use an online calculator and download an application form.
The GOV.UK website provides more information on the job retention scheme for employees.
Emergency Volunteering Leave (EVL)
The Government has introduced a new volunteering scheme to allow the public to contribute to the coronavirus response. The scheme allows workers to take unpaid statutory emergency volunteering leave to volunteer in health and social care authorities.
If you take a period of EVL, your LGPS pension benefits will build up in the same way as if you were working normally.
You will only pay contributions on any actual pay your employer pays you during the period.
For information about the impact on your pension if you are away from work for any other reason, such as child related leave or reserve forces leave, see If you are away from work.
How will coronavirus (COVID-19) affect the service my local LGPS fund provides?
Your local LGPS fund will be adapting their working patterns to ensure they can continue providing a service whilst monitoring the latest Government advice to protect their staff.
They will prioritise paying pensions and processing death benefits, so it may take longer than normal to deal with other work, such as transfers, estimate requests and general queries.
Check your local LGPS fund's website to see if they offer an online member self service facility. You may be able to use the self service facility to update your details, run calculations and view your previous annual statements.
Could pension scams increase during the Coronavirus (COVID-19) outbreak?
Yes, watch out for scams related to coronavirus (COVID-19). These scams take many forms and could be about insurance policies, pensions transfers, or high-return investment opportunities, including investments in crypto assets.
Scammers are sophisticated, opportunistic and will try many things. They're also very likely to target the vulnerable. Beware of investments that appear to be too good be true.
To help protect yourself you should:
- reject offers that come out of the blue
- beware of adverts on social media channels and paid for/sponsored adverts online
- use the Financial Services Register and Warning List to check who you are dealing with
- not click links or open emails from senders you don't already know
- avoid being rushed or pressured into making a decision
- if a firm calls you unexpectedly, use the contact details on the Financial Services Register to check that you are dealing with the genuine firm
- not give out personal details like bank details, address, existing insurance/pensions/investment details.
If you suspect a scam, call Action Fraud straight away on 0300 123 2040.
Will the death benefits paid by the LGPS be affected by the Coronavirus Life Assurance Scheme?
No. The Government launched the NHS and Social Care Coronavirus Life Assurance Scheme in April 2020. The scheme covers certain health and social care workers in England. A similar scheme will be introduced for health and social care workers in Wales. A payment of £60,000 will be made to the estate of eligible staff who die from coronavirus contracted during their frontline essential work. This would be paid on top of any death grant or survivor pensions paid by the LGPS. You can find out more about LGPS death in service benefits.
Page created on 01/04/2020