Leaving Service

Leaving service before your normal pension date? No need to panic about your pension; you have a number of options about what do to with it.

Leaving

If you leave your job voluntarily before your normal pension age then you may be able to choose one of the following options:

• A refund of contributions if your total qualifying service in the Local Government Pension Scheme is less than two years
• An early retirement pension if you are aged 55 or older
• A deferred pension
• A transfer to another approved pension arrangement

If you are made redundant before your normal pension age, and are over 55 years of age with at least two years’ qualifying service, your pension benefits will be released from the day after leaving.

Deferred pensions

If you are no longer employed by one of the participating employers but have chosen to leave your benefits in the Fund, your pension is known as a deferred pension.

The amount of deferred pension is calculated as 1/80 x pensionable service before 1st April 2008 x final pensionable pay, plus 1/60 x pensionable service after 31st March 2008 and before 1st April 2014 x final pensionable pay, plus your CARE pension accrued from 1st April 2014.

In addition a deferred lump sum is calculated as 3/80 x pensionable service before 1st April 2008 x final pensionable pay.

The scheme’s normal pension age is State Pension Age with a minimum of 65 and you usually take your pension then but you may be able to take it from age 55. Your pension may be reduced if taken before normal pension age.

You will need to ensure that you keep the pension manager advised of your current address and contact us at least three months before you reach normal pension age. At that time, you will need to decide whether to claim your pension from normal pension age or to defer it. If you defer your pre April 2014 pension past age 65 or your post April 2014 pension past normal pension age it is increased for late retirement. This increase is in addition to annual pension increases which are also applied to your pension.

Transferring out

You can transfer the value of your pension benefits to another approved pension such as a:

• New employer's scheme
• Personal pension
• Stakeholder pension
You can choose to transfer at any time before you take your retirement benefits, up to one year before your normal pension age.

The transfer value is the cash equivalent of your deferred pension. This amount will be paid to your new pension provider, who will advise you of the benefits you get by making the transfer. The amount paid is calculated by the Trustees on the advice of the actuary.

If you enter employment, within five years of leaving the Tower Hamlets Pension Fund, which gives you the right to rejoin the Local Government Pension Scheme before you have begun to receive your pension benefits, and you did not opt out of the Tower Hamlets Pension Fund on or after 11th April 2015, you may elect to transfer your benefits to the new Authority’s pension fund. In this case your pre April 2014 accrued pensionable service would be transferred on a day for day basis and your post 2014 CARE pension at your date of leaving the Tower Hamlets Pension Fund would get active service Treasury Order increases.

Refund of contributions

If you have less than two years' pensionable service, and have not transferred any other benefits into the Local Government Pension Scheme; you may be entitled to a refund of your own contributions.

If you were a member of the Fund prior to 6th April 2016, you would have been contracted out of the State Second Pension (S2P) until 5th April 2016 and paid National Insurance contributions at a reduced rate. If you receive a refund it will be necessary to reinstate you into the S2P and a statutory deduction is made from your contributions as your share of the cost.

As your contributions are deducted from your salary before tax has been taken, HM Revenue & Customs reclaims some of that tax at a special rate, currently 20 per cent. This is also deducted from your refund of contributions.

The employer's contributions cannot be refunded.

CONTACT THE EAPF

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You can get in touch with us through
the following methods.

0800 121 6593
+44114 452 5008 (overseas)
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