How do I ensure that I have
become a member of the Scheme?
Can I opt-out of the Scheme
and re-join the Scheme at a later date?
Can I pay more to increase my
benefits?
Can I transfer pension
benefits into the Scheme?
The Scheme is a tax approved, defined
benefit occupational pension scheme first established on 1st April 1950. It is
a ‘final salary’ scheme and is administered by the Northern Ireland Local
Government Officers’ Superannuation Committee (NILGOSC).The benefits paid under
the Scheme are based on the length of your membership and your final pay.
The Scheme covers the employees of local
government and other admitted bodies that have chosen to participate in it. If
you wish to join the Scheme you must have a contract of employment with one of
these bodies that is for at least three months and be under age 75. Police,
firefighters, teachers and academic staff (eligible to participate in the
Universities’ Superannuation Scheme) of the
To secure your entitlement to the Scheme
benefits it is important that you and your employer complete and return the joining form (LGS1).
On receipt of your form, relevant records will be set up and an official
notification of your membership of the Scheme will be sent to you. You should
also check your pay slip to make sure that pension contributions are being
deducted.
You can leave the Scheme at any time by
giving your employer notice in writing. If you opt-out, you can opt back into
the Scheme provided at that time you have a contract of employment that’s for
at least three months and you are under 75. You may wish to obtain independent
financial advice before you make a decision to opt-out of the Scheme. If you
have opted out more than once you may only reapply if your employer or future
employer consents. If you have more than one job with your employer, you may
opt out in respect of some, one or all of the jobs. The Pensions Service has published a leaflet entitled 'Pensions - The Basics' which you should read before making any decisions. The section on
Occupational Pension Schemes (Page 28) will be the most relevant to your
decision as NILGOSC administers the Scheme on behalf of your employer.
Your contribution rate depends on how
much you are paid but it will be between 5.5% and 7.5% of your pensionable pay.
The rate you pay depends on which pay band you fall into. If you work
part-time, your rate will be based on the whole-time pay rate for your job,
although you will only pay contributions on the pay you actually earn.
Here are the pay bands that apply from 1
April 2009 – they will increase in line with inflation from 1st April 2010 and
every April afterwards.
|
If your
Whole-Time Pay Rate is: |
You pay a
contribution rate of: |
|
Up to £12,600 |
5.5% |
|
£12,601 to
£14,700 |
5.8% |
|
£14,701 to
£18,900 |
5.9% |
|
£18,901 to
£31,500 |
6.5% |
|
£31,501 to
£42,000 |
6.8% |
|
£42,001 to
£78,700 |
7.2% |
|
More than
£78,700 |
7.5% |
As a member of the Scheme, your contributions will attract tax relief at the
time they are deducted from your pay and you will be contracted out of the
State Second Pension Scheme (S2P). Whilst you are a member of the Scheme you
will, prior to State Pension Age, pay reduced National Insurance contributions.
They’ll pay 6.5% on their pay. That gives
monthly contributions of approximately £119.
If they were working half-time, they’d still
pay the same contribution rate of 6.5%.
That’s because the whole-time rate for
their job is still £22,000, but their contribution would be based on their
part-time earnings, so they’d pay approximately £60 per month in contributions.
Your employer pays the balance of the
cost of providing your benefits in the Scheme.
Every three years an independent review
is undertaken to calculate how much your employer should contribute to the
Scheme. The Government is considering how future increases or decreases in
scheme costs can be shared between members and employers. There will be a
separate consultation on the cost sharing principles and these principles are
planned to be put in place by April 2010.
You can pay extra to increase your
retirement benefits. You can do this either by paying additional contributions
(known as ARCs) to buy extra scheme pension, by making payments to the scheme’s
Additional Voluntary Contributions (AVC) arrangement, or by making payments to
a personal pension, stakeholder pension or Free-standing AVC scheme of your own
choice. Click here to view the Increasing your Benefits section or click here to download the 'Increasing Your Retirement Benefits' guide.
Generally speaking, benefits that you
have previously accrued in the Scheme or in other pension arrangements can be
transferred and will buy membership in the Scheme. An option to transfer must
be made within twelve months of joining. You must have at least three months
membership or have transferred other pension rights into the Scheme to be
entitled to Scheme retirement benefits.