You are here: Home | IFA | Information for IFAs

Information for IFAs

IFA Frequently Asked Questions

Are there any charges of penalties

There is no charge or penalty for transferring out of the scheme. Where a request is for transfer to a scheme where GMP or protected rights cannot be accepted it is possible to transfer only the non protected rights. It is also possible to transfer all rights to such a scheme provided the transferring member is aware of the rights being given up.

Can members transfer to another scheme?

Members have the right to transfer their accrued LGPS benefits to another scheme including a scheme that offers flexible benefits. However, if the total value of their LGPS benefits across all LGPS in Scotland is £30,000 or more then they are required to take independent advice (but not for AVCs), from an authorised independent adviser who is registered with the Financial Conduct Authority (FCA).

If the total value of their LGPS benefits is £30,000 or less (or in respect of a transfer of AVCs), we recommend that members seek independent financial advice before deciding to transfer his/her LGPS pension benefits.

Pension Increase and Revaluation

Pensions from the final salary part of the scheme when in payment or in deferment are revalued yearly by CPI and cannot fall below zero. The CARE part of the pension is revalued yearly by Treasury Orders.

Where the Treasury Order revaluation is below zero a negative revaluation will be applied to current members’ pension accounts accrued that year and to those of any member who left within the year it applies to. Pensions in payment are not devalued but will have no increase.

As we do not know future revaluation and pensions increase rates the Fund will not provide projections beyond the current year.

Contributions

The amount of contributions payable by a member is determined by the Regulation 9 of the LGPS(S) 2014 Regulations. Members pay a percentage of their pay based on their pensionable earnings. Employers’ contributions are not based on individual member’s contributions but are determined by the scheme actuary following the triennial scheme valuation. The latest scheme valuation showing how much each employer pays can be found on the publications page of our website. We will not provide a breakdown of the contributions paid by a member or employer as the contributions merely fund the scheme and are not used to calculate any benefits payable.

Is there a lump sum paid when the pension is due?

The scheme regulations allow the member to give up pension to provide a bigger tax free lump sum at retirement at the rate of £1 of pension for an additional £12 of lump sum. The scheme allows a member to take up to 25% of the capital value of their accrued rights as tax free cash. Please see Regulation 32 of the LGPS(S) 2014.

Are there any discretionary increases?

There are no discretionary increases either in deferment or in payment.

What is the definition of a spouse?

In the event of a member’s death, pensions are payable to eligible partners. Eligibility depends on the regulations in force at the time the member left the scheme.

If the member left the scheme after 31 March 2009 a partner is a legally married husband or wife (including same sex spouse), a civil partner or cohabiting partner.

If the member left between 1 April 1998 and 31 March 2009 a partner is a legally married husband or wife, or a civil partner

If the member left before 1 April 1998 a spouse is an opposite sex, legally married husband or wife.