All about the payment of your deferred benefits

1 West Midlands Pension Fund(Post-1 April 1998 to 31 March 2008 leavers)All about the payment of yourdeferred benefitsThis booklet applies to members who left the Local Government Pension Scheme (LGPS) prior to 1 April 2008 with an entitlement to deferred benefitsPAS 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 12 ContentsHow will my retirement grant bepaid?What are my retirement benefits ?How do I know if my children areclassed as eligible children?Who is the lump-sum death grant paid to?What happens if I marry after retirement?Can I give up some of my pensionto increase my lump-sum?How will my pension be paid?Will my pension increase?Guaranteed minimum pension (GMP)Ill-health retirementPension sharing orderCan I retire early? your state retirement benefitsAre there any penalties for retiringearly and drawing immediatebenefits?HM Revenue and Custom (HMRC)controls and your LGPS benefitsWhen can I retire?

2 your payslip explainedRetirement4 your New Income Tax Office13 How your Pension Will Be Paid14 What benefits will be paid if I die after retiring on pension?Protection For your Family16 PAS 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 23 Customer charterStandards of serviceSuperlink - our pensioners newsletterHow can I trace my pension rights?How is the Scheme amended?Are the Scheme benefits protected?What other legislation applies to theScheme?How can I check the accuracy of mypension records?What other information am I entitledto?What if I move, I am paid direct intomy bank. Do I still need to informyou?Our commitment to our pensionersPensions Administration Service20 Who runs the LGPS?How much notice do I need to give tochange details?What if I am subject to a pensionsharing order?How do I get a state pension forecast?Can I take up another job withoutlosing my pension?

3 Who can help me if I have a query orcomplaint?How do I tell you I have changed myaddress or bank details?Frequently Asked Questions (FAQs)23 Some Terms We Use26 Help With Pension Problems29 PAS 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 3 When can I retire? your deferred benefits are payable if: you are age 65 (unless you opt todefer payment beyond that date); you are aged 60 or over, and youhave requested payment of yourbenefits. your benefits may be reduced if you do not meet the85-year rule (see page 10); you become permanently ill andyour former employer agrees toyour application for early paymentof benefits ; you can apply to your former employing authority or body anytime after attaining age 50 for early payment of your benefits . However, payment prior to age 60requires your former employer sconsent as they will incur considerable costs for agreeing toearly payment and, therefore, payment prior to age 60 is likely tobe agreed only in exceptional are my retirementbenefits?

4 When you retire, you will receive a pension and a tax-free lump-sumfrom the Local Government PensionScheme (LGPS). At state pension ageyou will also receive the basic flat-rate state pension, if you havepaid sufficient national insurancecontributions during your can look forward to enjoying aguaranteed package of benefitswhen you retire. Retirement4 PAS 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 45 How will my retirementgrant be paid? your lump-sum retirement grant willbe paid by direct credit to your nominated bank or building societyaccount. You may wish to ask yourbank/building society manager tonotify you when your account hasbeen will my pension bepaid? your pension will normally be paidon the 25th of each month by directcredit to your nominated bank,building society or post office account. your payslip will be sent toyour home address. Consequently,you should inform us immediately(using the back of your payslip) ifyou change your banking details oryour address.

5 Alternatively, contactthe helpdesk on 0300 111 the 25th falls during a weekend orbank holiday, your pension will becredited on the previous first payment of pension maybe for a part of or for more than you are planning to live abroad,and wish your pension to be paid toyour foreign bank account, your pension will be paid to you on aquarterly basis each March, June,September and are three methods of payment :To a bank or building society in the into a foreign bank account via the transcontinentalautomated payment system(TAPS).If you live in Jamaica, there is an alternative to TAPS. Please contact us if you requiredetails of this application forms, togetherwith details of the costs of this service, are available from the small pensions, one payment ismade per year, in March. You are advised to check that your pensionhas credited your account beforemaking any note:We cannot accept liability for delays in either thebanking or postal 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 5 Can I give up some of mypension to increase mylump-sum?

6 On retirement, you will be able to exchange some of your pension toreceive a bigger tax-free would be achieved by exchanging part of your annual pension for a one-off tax-free cashpayment for each 1 annual pension given up you will receive 12 lump-sum. You may not reduce your pension tobelow your guaranteed minimumpension (GMP). You will be able to take up to a maximum of 25% of the capitalvalue of your pension benefits as atax-free lump-sum or, if lower, 25%of the lifetime allowance less an adjustment for the value of anyother pension benefits you are already drawing. The Fund will provide you with thedetails about this pension will be reduced in accordance with any election youmake to receive a lump-sum. Any subsequent pension for yourhusband, wife, civil partner or children will not be affected if youdecide to exchange part of your pension for a may also elect to take up to100% of the accumulated fund inyour in-house AVC as a tax-freelump-sum, if you draw it at the sametime as your LGPS pension benefits ,provided that when added to theLGPS lump-sum, it does not exceed25% of the overall value of yourLGPS benefits including your AVCfund.

7 6 PAS 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 67 Will my pension increase?The law says that all LGPS pensionsin payment must be fully increasedin line with the RPI which measuresprice inflation, so that they maintain their purchasing increases are paid by us upuntil your state pension age, atwhich time the state then becomesjointly responsible for pensions note:LGPS pensions paidfollowing retirement before age 55,except in the case of ill-health retirement, are not increased untilage 55. When you reach state pension age,the law says that the part of yourpension which relates to your GMPmust be increased overall in line withRPI. As mentioned, the responsibility for increasing the part of your LGPS pension that relates to your GMP is then sharedbetween us and the state. Therefore,responsibility for pensions increase(from state pension age) will be asfollows:(i) for that part of your GMP thatrelates to employment from 6 April 1978 to 5 April 1988, the increases will be made entirely by the state,(ii) for that part of your GMP thatrelates to employment from 6 April 1988 to 5 April 1997, theincreases will be made by us upto a maximum of 3% a year - the state pays anything above3%, and (iii) for that part of your LGPS pension, in excess of your GMP,the increases will be madeentirely by us in line with RPI -these increases are not limitedto a 5% maximum as in manyother note:Pensions increase, paidby the state, is paid in addition toyour basic state pension.

8 However, special conditions apply if you liveabroad in certain minimum pension (GMP)If your membership in the LGPS includes a GMP, at state pension ageyour LGPS pension will be comparedwith your GMP and increased to therate of your GMP should this behigher. In most cases, your LGPS pension is higher than your 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 7HM Revenue and Customs(HMRC) controls and yourLGPS benefits There are HMRC controls on thepension savings you can have beforeyou become subject to a tax charge(over and above any tax due underthe PAYE system on a pension inpayment).The lifetime allowance is the totalcapital value of all your pensionarrangements which you can buildup without paying extra tax. If the value of your benefits whenyou draw them (not including anystate retirement pension, state pension credit or any spouse s, civilpartner s or dependant s pension you may be entitled to) exceed your lifetime allowance a tax chargewill be made against the excess.

9 The lifetime allowance for2009/2010 is million. MostScheme members pension savingswill be significantly less than thelifetime allowance. There are protections for benefitsearned up to 5 April 2006 in respectof those high earners affected by the introduction of the lifetime allowance from 6 April 2006. We will let you know the value ofyour LGPS benefits on retirementand ask you about any other pensions you may have in payment ,so we can work out whether weneed to deduct a recovery taxcharge. If you do not provide this information promptly it could delaythe payment of your pension. Also, under HMRC rules, if the LGPS makes an unauthorised payment orif you pay some or all of your LGPS lump-sum back into a pensionarrangement, there will be a 195 Pre 1-April 2008 Leavers copy:Layout 1 3/3/09 09:51 Page 89 Ill-health retirement What happens if I want to retireearly due to permanent ill-health?

10 To qualify for ill-health benefits , youremployer, based on an opinion froman independent specially qualifieddoctor, must be satisfied that youwill be permanently unable to doyour own job and that you are permanently incapable, because of ill-health, of discharging efficiently the duties of your former employment which gave riseto the deferred benefit in the benefits can be paid at anyage and are not reduced on accountof early payment . Can I retire early?You can elect to claim your LGPS benefits from age there any penalties forretiring early and drawingimmediate benefits ?If you retire before age 65, yourLGPS benefits will be reduced to takeaccount of their early payment andthe fact that your pension will bepayable for longer. If you were in the LGPS on 30 September 2006, some or all of yourbenefits paid early could be protected from the reduction underwhat is called the 85-year rule.