Opt-out
If you wish to cancel your membership you're free to opt out from your next pay period.
Although membership of the Scheme is automatic in many cases, it isn't compulsory, even if you join under automatic-enrolment. You can stop being an active member at any time.
You should be aware that in certain circumstances your employer may be obliged by law to re-enrol you into the LGPS at a later date, even though you have previously opted not to be in the Scheme.
Important
Apart from the main retirement benefits, you will lose out on extras, such as ill health cover if you opt-out. You may wish to get independent financial advice before opting-out. You can find details on independent financial advice on the 'Useful links' page.
Think about a temporary reduction to your contributions
If you are thinking of opting out because of the cost, you can stay in the Scheme but pay less.
There is an option called 50/50 that allows you to pay half of the contribution but only build up half the pension. If you have more than one job you can make this choice in one, all or some of them.
In the event of your death, your survivors’ benefits would still be payable at the full rate.
Your employer will need you to make your choice in writing.
This is only meant to be a short-term solution and you will have to pay the full contribution rate again when your employer re-enrols you into the main section (which they must do every three years). If you are away from work without pay due to sickness you will have to pay the full rate when your pay recommences.
How do I opt out?
If you want to opt-out, you can do so at any time. You will need to complete the opt-out form (see 'Resources' section) and return this immediately to your employer so that they can carry out the necessary actions to remove you from the Scheme. If you have less than two years’ scheme membership, you may qualify for a refund and, if so, the pension contributions you have paid into the Scheme will be refunded to you (less a deduction for national insurance contributions and income tax). You can ask your employer to cancel your membership from any date after your request. However, if you do not specify a date, they will just cancel it from the start of the next pay period. Please note that any opt out form that has been completed before you commence your employment cannot be accepted and you will have to make a further election on or after the date your employment commences if you do wish to opt out.
Important
If you opt out with less than three months’ scheme membership, your employer will refund your contributions and it will be treated as if you were never a member of the LGPS. If you opt out with more than three months’ membership but less than two years, you will still usually be entitled to a refund but this will be paid from the Scheme and a refund record will be retained on our systems.
Opting out of the LGPS is a big decision as you will be giving up a guaranteed income for when you retire as well as other benefits such as valuable life cover while you are working. If you choose to opt-out, you will also be giving up the value of your employer’s contribution into the Scheme and the benefit of tax relief that the Government provides to encourage pensions saving. If you are thinking of opting out, we recommend that you speak to an Independent Financial Adviser (IFA) before making a decision. You can find details on independent financial advice on the 'Useful links' page.