Rhondda Cynon Taf County Borough Council

Leaving before retirement

The benefits that you are entitled to on leaving the scheme depend on when you joined the scheme and the length of time that you were in the scheme (service includes transfers in and other periods of membership of the Local Government Pension Scheme).

The fund will write to you shortly after leaving to confirm your options and let you know what you need to do next.

If you have less than 2 years total membership in the LGPS (this includes membership within other Funds not only the RCT Fund) you can

  • Receive a refund of your contributions less tax and the cost of re-instating you into the State Second Pension (S2P) if applicable.
  • Transfer your benefits to another pension providers

If you have more than 2 years total membership, or have transferred previous pension rights into the scheme you can

  • Leave your benefits until you want to bring them into payment
  • Transfer your benefits to another pension providers

Opting out of the LGPS

You can leave the LGPS at any time by giving your employer notice in writing. An election to opt-out becomes effective from the end of the payment period during which you gave notification, unless your notification specifies a date later than the date the notification was made. We would recommend that you discuss your options with the Pensions Helpline before opting-out of the LGPS.

Here are some points you should consider:

  • The cost of being a member of the LGPS is less than you might think. If you pay tax you get tax relief on your contributions.
  • Your scheme provides you with a secure future retirement income, independent of share prices and stock market fluctuations.
  • You have the option to exchange part of your pension for some tax-free cash on retirement.
  • If you opt out, you lose the benefit of the substantial contributions made by your employer.

The scheme provides an excellent package of benefits not just for you but for your family as well:

  • Free life assurance from the moment you join the LGPS, there’s a lump sum of 3 years pay if you die in service.
  • Pensions for your husband, wife, registered civil partner or co-habiting partner and for eligible children if you die in service or die after leaving with a pension entitlement.
  • There’s also cover in the event of your early retirement on the grounds of permanent ill-health, redundancy or business efficiency.

If you opt-out within three months of joining: 

You will be treated as not having been a member of the LGPS during that period, but will be treated as having opted-out of the LGPS. The contributions that you have paid will be refunded by your employer.

If you opt-out after being in the scheme for more than three months but less than two years -  you will receive a refund of your contributions less tax which will be processed by the Pension Fund.

If you opt out after two years service you have the  same options  as detailed in the section on Leaving before retirement. However, please note that, in most cases, you will not be able to bring our pension benefits into payment until you leave employment.

You can opt out using the Opting Out Form. You should NOT complete an opting out declaration before the commencement of your employment.

Can I re-join the LGPS at a later date?

If you opt-out once, you can re-join the LGPS at any time.

You may wish to obtain independent financial advice before you make a decision to opt-out of the LGPS. Remember, independent financial advisers recommend that the value offered by Public Sector schemes, such as the LGPS, is hard to beat.