Refunds
If you leave your job or opt out of the pension scheme before you are eligible to take your benefits you may, depending on how long you have been contributing to the pension scheme, be entitled to receive a refund of the contributions you have paid.
When can a refund be paid?
A refund of contributions can be paid when your length of service, or however long you have contributed to the scheme, is less than 2 years when you leave your job or opt out. Who pays your refund is again determined by your length of service.
- Less than 3 months
Your employer refunds your pension contributions in full and you are treated as though you have never been a member.
- Between 3 months and 2 years
As soon as we get confirmation from your employer, we arrange a full refund directly with you – unless you have been a member previously, in which case you may be able to defer the benefits.
If you fall into the second category it is important to note that your refund cannot be paid until a month and two days has passed since you left employment or opted out of the LGPS.
Before you decide to elect for a refund, it is important to remember that your contributions (when paid) were subject to tax relief. Therefore you will not receive back the exact amount of contributions you have paid, as we need to deduct the tax you would have paid, had you not received tax relief.
There are certain restrictions which would mean a refund cannot be paid:
- If you re-join the LGPS within one month and one day of leaving or opting out
- You re-join the LGPS before we have paid your refund
- You contribute to the LGPS through a different job that you held at the same time as the job you have left or opted out of.
- If it is more than 5 years since leaving or opting out and you claim a delayed refund, this would be subject to an additional tax charge.
How do I claim my refund
If you are leaving your job and have completed more than 3 months service:
1. Your employer will send us the leaver paperwork
This information allows us to calculate any refund that may be payable to you.
2. We will write to you
We will send you a letter setting out the value of the refund, including details of the deductions we are required to make to repay the tax you would have paid had you not received tax relief.
3. Return the completed form to us
The letter you receive will include a refund claim form, which needs to be completed and returned to us. Remember that you cannot claim a refund until 1 month and 1 day after you left.
4. Sit back and relax
Once we have received your completed forms, we will process your refund and pay this directly to your nominated bank account.
If you have opted out of the scheme and completed more than 3 months service:
1. Complete the opt out form
You can download a paper version below or if you work for Lancashire County Council you complete the online version of the form.
2. Return the completed form to your employer
Paper forms should be returned to your Payroll or Human Resources Department.
3. Your employer will remove you from the scheme
After receiving your form, your employer will cancel your payroll deductions and notify us, so that we can process your benefits.
4. We will write to you
We will send you a letter setting out the value of the refund, including details of the deductions we are required to make to repay the tax you would have paid had you not received tax relief.
5. Return the completed form to us
The letter you receive will include a refund claim form which needs to be completed and returned to us. Remember that you cannot claim a refund until 1 month and 1 day after you left.
6. Sit back and relax
Once we have received your completed forms, we will process your refund and pay this directly to your nominated bank account.
For further details of how you can opt out of the pension scheme please visit the relevant section of the website here.