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For members of the Local Government Pension Scheme in England and Wales

Leaving without deferred benefits

You will not qualify for deferred benefits if you do not meet the two year vesting period. If you do not qualify for deferred benefits, you will generally have three options:

Refund of contributions

A refund of contributions will include:

Tax of 20 percent will be taken from the refund. The refund may also be adjusted if you paid National Insurance as a Scheme member before 6 April 2016. You paid National Insurance at a lower rate as an LGPS member before 6 April 2016. This adjustment will buy you back into the State Second Pension (S2P) for the period before that date.

You do not have to take your refund immediately. You can delay payment for up to five years after leaving the LGPS, or until age 75 if this is sooner. Your pension fund must pay the refund at that point.

If you are paid the refund more than a year after you left the Scheme, your pension fund will add interest. The interest rate is 1 percent above base rate on a daily basis, compounded with three monthly rests, from the date you left the Scheme to the date the refund is paid.

You cannot take a refund if:

You will have an additional option if you first joined the LGPS before 1 April 2014 and you leave with between three months and two years membership. You will be able to to choose a refund or a deferred benefit. If you choose a refund, you must claim your refund within six months of leaving.

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