Deferred Members Newsletter

Your questions answered

What is a deferred pension?

A deferred pension is a pension that you no longer pay into. Your fund works out the value of your deferred benefits and looks after them until you can start to take them. The figures quoted in annual statements are based on your pension starting to be paid at normal pension age (NPA).be paid for longer. How much they are reduced by will depend on how early you take them.

The current early retirement reduction factors are shown in the following table

Use the benefit calculators on My Oxfordshire Pension to find out how much you might get when you choose to take your benefits: 

Can I take my deferred benefits if I can't work because of ill health?

You may be able to have your benefits paid at any age without them being reduced if you can't work because of ill health. You must be permanently incapable of doing the job you were in when you left the LGPS.

What is my National Pension Age (NPA)?

Your NPA is based on when you left the LGPS and if you left;

• after 1 April 2014, your NPA is linked to your State Pension age between 1 October 2006 and
  1 April 2014, your NPA is age 65
• or before 1 October 2006, your NPA is typically 65 but could be as early as age 60.

How do my deferred benefits keep up with the cost of living?

Each April, your deferred benefits are adjusted by the Consumer Price Index (CPI) as of the previous September. For April 2023, the increase is 10.1%.

You'll get the total increase if you become a deferred member before 26 April 2022. However, you'll only get part of the 10.1% increase if you become a deferred member after that date.

Can I transfer my deferred benefits to another pension scheme?

You may be able to transfer your deferred benefits to another scheme if you meet certain conditions.

Transferring your pension out of the LGPS is a crucial decision you should consider carefully. You can learn more about transferring out, including time limits, on transferring into the LGPS.

What happens to my deferred benefits if I die?

A lump sum death grant may be due to your loved ones. 

• if you left the LGPS before 1 April 2008, the death grant is three times your deferred pension
• if you left on or after 1 April 2008, the death grant is five times your deferred pension

Only the highest death grant would be paid if you also have an active LGPS pension account at the time of death.

Log in to Oxfordshire Pensions Fund and select Benefit Projectors. You can also use this system to tell us who you'd like the death grant paid to. Or you can let us know by filling out a form on our website.

When can I take my deferred benefits?

You can take your deferred benefits at any age between 55 and 75, as long as you have left the job your deferred benefits are linked to.

When you can take your benefits;

• reduced at any age between 55 (see note) and your NPA
• unreduced at your NPA
• with increases after your NPA and up to age 75 (but if you left the LGPS before 1 April 1998, you can’t defer taking your pension past your NPA)
• unreduced at any age before your NPA if you are given access to them because of ill health 

Note: You may not be able to take your LGPS benefits at age 55.

How much will I get if I take my benefits before my NPA?

You can take your deferred benefits before your NPA, but they'll normally be reduced because your pension will be paid for longer. The size of the reduction will depend on how early you take your benefits.

The table above shows the percentage reduction that will apply to your pension if you take it before your NPA.

The Government sets early retirement reductions, which may change occasionally. The rates in place at the date you take your benefits will apply.

Use the benefit calculators on Oxfordshire Pension Funds to determine how much you might get when you choose to take your benefits.

How do I update my personal details?

Your personal information can be updated by logging in to your My Oxfordshire Pension account. 

For name, partnership status or gender changes, we need to see a copy of the relevant legal document before authorising this change.

You can scan or take a photo of your document and email it to pension.services@oxfordshire.gov.uk.

Help with the rising cost of living

It's fair to say that we all have noticed the effect of rising costs, whether at the supermarket while doing the weekly shopping or from increasing energy bills.

It can be challenging to stretch your money further while trying to keep a certain standard of living. This can lead to people feeling vulnerable, anxious and even overwhelmed.

The cost-of-living crisis is a national concern, and the Government has put certain support in place to try to help you if:

• you need support with your housing costs
• you need support with your bills
• you need support coping with disabilities
• you are generally finding things difficult and need someone to talk to

You may be able to get help with the cost of living from your local council. This is sometimes known as ‘the Household Support Fund'. 

This could help if you're struggling to afford energy and water bills, food and essential items.
Other national organisations, such as MoneyHelper, also provide lots of support. 

This ranges from sharing tips for cutting back costs and making income go further, to highlighting scams. 

Changes to State Pension age and increase to the normal minimum pension age

The Government has carried out a review of the State Pension age to see if it needs to change and decided it will not be making any changes this parliament. If you paid into the LGPS after 1 April 2014, the date your pension can be paid without reductions is the same as your State Pension age. 

If your State Pension age changes, the date your LGPS pension can be paid without reductions will also change.

The date your LGPS pension is paid from without reductions is your normal pension age (NPA). You can find this date on your annual benefit statement.

You can take your pension earlier than this date (currently from age 55), but as it will be paid longer than expected, it will be reduced.

The government sets the earliest date you can start receiving your pension which is known as the normal minimum pension age (NMPA). 

This will increase to age 57 from 6 April 2028. If you started paying in before 3 November 2021, you may have a protected NMPA of age 55, and future changes will not affect you.

McCloud and the LGPS

In 2014, the LGPS changed from a final salary scheme to a career average scheme. At the time, protections were put in place for older scheme members, which allowed pension funds to work out if their benefits would've been better in the final salary scheme or the new scheme and then the higher of the two was paid.

Similar rules were also brought into other public service pension schemes, such as the NHS and Teachers’ Pension Schemes.

Following a court ruling (commonly known as the McCloud judgement), it was decided that the rules were unlawful and unfair to younger members. Revised rules are expected to be brought into the LGPS later this year.

What this will mean for you

Protections will apply to all qualifying members regardless of their age. They will apply to you if you were a member of the LGPS before 1 April 2012 and at any time between 1 April 2014 and 31 March 2022, as long as you didn't have a disqualifying break. 

Pension funds are working hard to identify the members who qualify. You won't need to do anything for the new rules to apply to you. 

If the protections increase the value of your pension benefits, we will make any changes and let you know.
However, it's expected that most members' pension benefits won't be affected.

Introducing pensions dashboards

In the future, LGPS funds will be taking part in a new initiative that will most likely be called ‘Pensions dashboards’. This government programme is designed to give you quick, easy and secure online access to information about your pension savings in one place. 

To access the pensions dashboard website, you must confirm your identity to know your information is safe and secure.

The hope is that having all of your pension information in one place will make it easier to plan for your retirement. It may also help you find any lost pensions. 

Pensions dashboards will be free to use. A date has not yet been set for when the project will be available for public use, but we will keep you updated as the project develops.

Proposed changes to revaluation date

A consultation was released in February 2023 by the Department for Levelling Up, Housing and Communities to change the date the cost-of-living adjustment is applied to CARE benefits in the LGPS.

For deferred members, these proposed changes won't affect you, whether you left the scheme before or after 1 April 2022. 

If you're a deferred member, your benefits are adjusted to keep pace with the cost of living by Pensions Increase Orders rather than revaluation by the Treasury. 

The suggested changes won't impact your pensions increase or the date on which it applies. If you left the scheme after 1 April 2022, the proposals also won't affect you, and you won't see any change to the benefits you received. This is because the adjustment was awarded on 6 April but is backdated to 1 April.

Pension scams are on the rise in the UK

The people behind the scams are good at tricking you into handing over your money. You must know how to spot a pension scam, even if you think it could never happen.

Some warning signs of a pension scam could be:

• someone calling you out of the blue, offering a free pension review
• someone promising to get you better returns on your pension savings
• being pressured into making a quick decision about transferring your pension

MoneyHelper explains how to spot a pension scam and learn how to spot a scam. 

If you're considering transferring your benefits from the LGPS, you should always get impartial financial advice. Make sure that the company or person giving you the advice is registered with the Financial Conduct Authority (FCA).

Contacting the Pension Team

• Tel 03300 241359
• pension.services@oxfordshire.gov.uk www.oxfordshire.gov.uk/business/oxfordshire-pension-fund
• Oxfordshire Pension Fund, 4640 Kingsgate, Cascade Way, Oxford Business Park South, Oxford, OX4 2SU

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