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CONTACT INFORMATION

May 2012

All About YourDeferred Benefits

West Midlands Pension Fund

PAS 184 All about your deferred benefits:Layout 1 21/3/13 14:39 Page 2

Leaving Your Job Before RetirementWhat will happen to my benefitsif I choose to defer them?

How are deferred benefits worked out?

Membership

Final pay

Your deferred pension is worked out like this

How your benefits are worked out if you joined the LGPS before April 2008

What if I paid extra?

When are deferred benefits paid?

How do deferred benefits keep their value?

Do the tax rules on savings cover deferred benefits?

Other matters

What will happen if I die before receiving my deferred benefits?

Transfer of Your LGPS Pension RightsWhat happens if I change jobs but remain in the LGPS?

What if I have two or more LGPS jobs?

What happens if my job istransferred to a privatecontractor?

What will happen if I wish totransfer my LGPS benefits toanother (non-LGPS) scheme?

Help With Pension ProblemsWho can help me if I have a query or complaint?

How can I trace my pension rights?

Pensions ServiceCustomer charter

Standards of service

Our commitment to our deferred members

Frequently Asked Questions (FAQs)Who runs the LGPS?

How is the Scheme amended?

Are the Scheme benefitsprotected?

What other legislation appliesto the Scheme?

How can I check the accuracyof my pension records?

What other information amI entitled to?

What happens if I do not agree with the calculation of my benefits?

Some Terms We Use

CONTENTS

2 WEST MIDLANDS PENSION FUND ALL ABOUT YOUR DEFERRED BENEFITS

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PAS 184 All about your deferred benefits:Layout 1 21/6/12 08:36

As long as you have been a memberof the LGPS for at least three months,or you have transferred other pensionrights into the LGPS, or you alreadyhave a deferred benefit in the LGPS inEngland or Wales, you will have built up valuable LGPS benefits that form an important part of your savings forretirement. On leaving before retirement, you have two options:

– You can choose to keep your benefits in the LGPS. These are known as deferred benefits and will increase every year in line withthe cost of living.

– Alternatively, you may be able to transfer your deferred benefits to a new pension arrangement.

If you have been a member of theLGPS for less than three months, have not transferred in any other pension rights and do not already have a deferred benefit in the LGPS in England or Wales, you do not qualify for deferred benefits.

You have three options:

– You will normally be able claim arefund of your contributions, lessany deductions for tax and the cost of buying you back into thestate second pension (S2P). Interest is paid if the refund is notmade within one year of leaving,but no refund can be made if yourejoin the Scheme within a monthand a day of leaving, or rejoin before the refund has been paid.

– You may be able to transfer yourbenefits to a new pensionarrangement.

– You can delay your decision untilyou either rejoin the LGPS, join anew pension scheme, or want totake a refund of contributions.

LEAVING YOUR JOB BEFORE RETIREMENT

ALL ABOUT YOUR DEFERRED BENEFITS WEST MIDLANDS PENSION FUND 3

In this section, we look at what happens to your Local Government Pension Scheme (LGPS) benefits on leaving your job before retirement if you pay into the LGPS on or after 1 April 2008.


What will happen to my benefitsif I choose to defer them?Deferred benefits are where we workout the value of your benefits whenyou leave the LGPS and hold them inthe LGPS for you until either you decide to transfer them to anotherpension scheme, or they are due to be paid.

Your personal deferred benefit packageconsists of an annual pension, payablethroughout your retirement, with an option on retirement to exchangesome pension for a one-off tax-freelump-sum. It also includes life coverand financial protection for your family.

How are deferred benefitsworked out?Deferred benefits are based on yourmembership and your final pay on leaving.

MembershipYour membership normally includes:

– How long you have been a member of the LGPS worked out in years and days, but excluding:

- membership for which you already receive a LGPS pension or hold an LGPS deferred pension

- membership from any concurrent job you may have, and

- any LGPS membership in respect of which you have received a refund or have transferred the pension rights to another scheme.

– Membership purchased by a transfer from another scheme.

– Any extra membership you have bought with additional contributions or by converting in-house AVCs into membership.

– Any extra membership awarded byyour employer.



This could be different to your actualcalendar length membership of theLGPS. For example, if you work part-time, although the calendarlength of your membership is used to decide if you are eligible for a benefit, your membership is reducedto its whole-time equivalent length to calculate the amount of your retirement benefits. For example, if you work half-time for ten years,your benefits would be calculated on five years’ membership.

If your hours have changed duringyour membership of the Scheme, yourbenefits will be calculated to reflectthe changes. If you do not have anycontractual hours, your membershipfor each year in the LGPS will be calculated on average weekly hoursworked during each year.

Final payYour final pay is usually the pay in respect of your final year (grossed up to a full year’s pay if you did notreceive pay for a full year) of Schememembership on which you paid contributions, or one of the previoustwo years if this is higher, and includesyour:

– normal pay

– contractual shift allowance

– bonus

– contractual overtime

– maternity pay, paternity pay,adoption pay, and

– any other taxable benefit specified in your contract as being pensionable.

This may not include all your pay. We don’t include non-contractualovertime, travelling or subsistence allowances, pay in lieu of notice, pay inlieu of loss of holidays, any paymentas an inducement not to leave beforethe payment is made, any award ofcompensation (other than paymentrepresenting arrears of pay) made forthe purpose of achieving equal pay,nor (apart from some historical cases)the monetary value of a car or pay received in lieu of a car.



If you are working part-time when you leave the LGPS, or worked part-time at some point during yourlast year of membership, your final payis the whole-time pay that you wouldhave received if you had workedwhole-time.

If your pay is reduced in this period because of sickness, your final pay will be the pay that you would havereceived if you had not been off sick.

If you have maternity, paternity oradoption leave in this period forwhich you paid (or are deemed tohave paid) pension contributions, finalpay includes the pay you would have received had you not been on maternity, paternity or adoptionleave.

If your pay is reduced or increases toyour pay are restricted in your last ten years of continuous employmentwith your employer because youdowngrade or move to a job with lessresponsibility, or as a result of a jobevaluation/equal pay exercise, or because of a change in what is specified as pensionable pay in your contract, or is restricted for someother reason, you may have the optionto have your benefits based on the average of any three consecutiveyears’ pay in the last 13 years (endingon a 31 March).

Such an option must be made to theFund no later than one month beforeleaving. You cannot make use of thisoption to use earlier years’ pay inworking out your benefits if the reduction or restriction to your paywas as a result of the loss of a



temporary increase in pay, or resultedfrom a reduction in your grade in orderto take retirement benefits on flexibleretirement.

If your pay was reduced or restricted for reasons beyond your control before 1 April 2008 and you were issued witha certificate of protection by your employer and you leave the LGPSwithin ten years of the reduction orrestriction in your pay, then we willwork out your final pay as the bestyear's pay in the last five years prior toleaving, or the best consecutive threeyear average in the last thirteen yearsafter allowing for inflation.

Your deferred pension is worked outlike this:

For membership you build up after 31 March 2008Your annual pension is calculated bydividing your total membership by 60and multiplying this figure by yourfinal pay.

When you draw your deferred benefits, you will be given the optionto exchange some of your annual pension for a one-off tax-free lump-sum. You receive £12 lump-sum foreach £1 of annual pension given up.You can take up to 25% of the capitalvalue of your pension benefits as alump-sum (limited to £375,000 –2012/2013 figure – less the value ofany other pension rights you have inpayment).

Here are examples of how your deferred pension is worked out formembership after 31 March 2008:

If you work full-time:

Let’s look at someone with ten years’ full-time membership in the Scheme,and a final year’s pay of £18,000.

Their deferred annual pension is:10 years x 1/60th x £18,000 = £3,000

If you work part-time:The same calculation is used, but yourmembership is scaled down to the whole-time equivalent length basedon your contractual hours, and yourfinal pay is scaled up to the whole-time equivalent rate.

Let’s look at someone leaving after ten years, working half-time, ie,181/2

hours a week in a job where the full-time hours would be 37 per week and with a part-time final payof £9,000 (£18,000 is the full-time equivalent pay for a person workingfull-time).

Membership to be used in calculatingbenefits is reduced like this:10 years x 181/2 ÷ 37 = 5 years

And we would use a whole-timeequivalent pay, so their deferred annual pension is:5 years x 1/60th x £18,000 = £1,500

They will have paid half the contributions and receive half the benefits of an equivalent whole-time person.



How your deferred benefits areworked out if you joined the LGPSbefore 1 April 2008If you joined the LGPS before 1 April2008, your benefits based on yourmembership to 31 March 2008 will becalculated differently to those basedon your membership from 1 April2008.

For membership built up to 31 March2008, you receive a pension of 1/80thof your final pay plus an automatictax-free lump-sum of three times yourpension. For membership from 1 April2008, your pension will be at the increased rate of 1/60th of your finalpay.

There will be no automatic lump-sumfor membership built up after 31 March 2008, but you do have the option to exchange some of your pension for extra tax-free lump-sum.

Here is an example of how benefitsare worked out if you have member-ship up to and after 31 March 2008.

Let’s look at someone who has eightyears’ membership up to 31 March2008 and 24 years’ membership after then when they retire at age 65. Their final year’s pay on retirement is £20,000.

Benefits based on their eight years’membership up to 31 March 2008:

Their annual pension is:8/80th x £20,000 = £2,000

Plus an automatic tax-free lump-sum:3 x 8/80th x £20,000 = £6,000

Benefits based on their 24 years’membership from 1 April 2008:

Their annual pension is:24/60th x £20,000 = £8,000

To give total benefits of:An annual pension£2,000 plus £8,000 = £10,000

Plus a tax-free lump-sum = £6,000

But remember, it's possible to exchangesome of your pension for extra tax-freelump-sum. You can take up to 25% ofthe capital value of your LGPS benefitsas a lump-sum (limited to £375,000 –2012/2013 figure – less the value ofany other pension rights you have inpayment).



For every £1 of annual pension thatyou give up, you will receive an extra£12 lump-sum.

To summarise, any pension built upbefore April 2008 is calculated at the1/80th rate with a lump-sum of threetimes pension. Only pension built upfrom 1 April 2008 is calculated at thebetter 1/60th rate and there is an option to take extra lump-sum in exchange for some pension.

You should also note that if you havean in-house AVC fund and you convertit into extra LGPS membership, theextra membership will attract a pensiononly, calculated at the 1/60th rate. You are only allowed to convert yourAVC fund into LGPS membership inlimited circumstances, and only if yourelection to start paying AVCs had beenmade before 13 November 2001.

If you are buying extra membership inthe LGPS (added years), any extra benefits will be calculated on the samebasis as you agreed to buy them.

If you are a married man with membership before 1 April 1972, that membership will be converted to89% of its length unless you elected topay extra contributions to convert it to its full length.

If you are a high earner and you joinedthe Scheme after 31 May 1989 and before 6 April 2006, you could only paycontributions and have your benefitsbased on your pay up to the earningscap – this was £105,600 for 2005/6.

The earnings cap was removed from 6 April 2006 and, if it affected you, yourrelevant membership prior to then willbe reduced.



What if I paid extra?If you have been paying extra contributions and leave with deferredbenefits, you will benefit from thoseextra contributions.

If you were buying extra LGPS pension(additional regular contributions)Contributions to buy extra LGPS pension will cease when you leave the LGPS. You will be credited with the extra pension you have paid for at the time of leaving. This will increase the value of your deferredbenefits and any transfer value paid to a new pension arrangement.

If you were buying extra years inthe LGPS (added years)If you are paying additional contributions to buy extra LGPS membership, they will cease when youleave the LGPS. You will be creditedwith the extra period of membershipthat you have paid for at the time ofleaving. This will increase the value of your deferred benefits and any transfer value paid to a new pensionarrangement.

If you move to a new employer in theLGPS within 12 months of leaving, you can carry on paying the additional contributions provided you also paythem to cover the period betweenleaving and starting your new job andyou join your pension rights together.Contact your new LGPS administratorwithin three months of rejoining toarrange this.

If you paid in-house additional voluntary contributions (AVCs)If you are paying AVCs arrangedthrough the LGPS (in-house AVCs),your contributions will cease whenyou leave. The value of your AVC fundwill continue to be invested until it ispaid out. Your AVC plan is similar toyour main LGPS benefits: it can betransferred to another pensionarrangement, be drawn at the sametime as your LGPS benefits or youmay be able to defer payment untilthe eve of your 75th birthday at thelatest. As you cannot pay in-houseAVCs after leaving, any extra life coverpaid for through AVCs will cease.



When are deferred benefits paid?Your deferred benefits are normallypayable from age 65, although theycan be paid earlier, or later. There aretwo ways they can be paid earlier.

Early payment of deferred benefitsat your requestFirstly, you can request early paymentof your deferred benefits from age 55, but you must have your formeremployer's permission for paymentbefore age 60. You can ask your formeremployer what their policy on this is.You do not need your employer’s consent to draw your benefits at orafter age 60.

If you choose to draw your deferredbenefits before age 65, your benefitswill be reduced to take account oftheir early payment and the fact thatyour pension will be paid for longer.How much your deferred benefits arereduced by depends on how early youdraw them.

The reduction is calculated in accordance with guidance issued by the Government Actuary’s Department from time to time. The reduction is based on the lengthof time (in years and days) that youretire early, ie, calculated as the periodbetween the date your benefits arepaid and age 65.

As a guide, the percentage reductions, issued in April 2008, for retirements upto five years early are shown in thefollowing table.

Where the number of years is notexact, the reduction percentages are adjusted accordingly.

If you were in the LGPS on 30 September 2006, some or all of your benefits paid early could be protected from the reduction underwhat is called the 85-year rule.

The 85-year rule is satisfied if your ageat the date you draw your benefitsand your Scheme membership (eachin whole years) add up to 85 or more.

If you are part-time, your membershipcounts towards the rule of 85 at itsfull calendar length.

Not all membership may count towards working out whether youmeet the 85-year rule.


Number Pensions reductionof years Lump-sum

paid early reduction

0 0% 0% 0%

1 6% 5% 3%

2 11% 11% 6%

3 16% 15% 8%

4 20% 20% 11%

5 25% 24% 14%

Men Women


Working out how you are affected bythe 85-year rule can be quite complex,but this should help you work out yourgeneral position.

– If you would not satisfy the 85-year rule by the time you are 65, then all your benefits are reduced if you choose to retire before 65. The reduction will be based on how many years before 65 you draw your benefits.

– If you will be age 60 or over by31 March 2016 and choose to retire before age 65, then, provided you satisfy the 85-yearrule when you start to draw yourpension, the benefits you build upto 31 March 2016 will not be reduced.

– If you will be under age 60 by 31 March 2016 and choose to retire before age 65, then, providedyou satisfy the 85-year rule whenyou start to draw your pension, the benefits you build up to 31 March 2008 will not be reduced. Also, if you will be aged 60 between 1 April 2016 and 31 March 2020 and meet the 85-year rule by 31 March 2020,some or all of the benefits you build up between 1 April 2008 and 31 March 2020 will not have a full reduction.

Your former employer can agree towaive any reduction on compassionategrounds. You can ask them what theirpolicy on this is.

Early payment of deferred benefitsdue to permanent ill-healthThe second method of obtaining early payment of your deferred benefits ison the grounds of permanent ill-health.You can apply for payment of your deferred benefits at any age, withoutreduction if, because of your health,you would be permanently incapableof the job you were working in whenyou left the LGPS and you have a reduced likelihood of being capable ofany gainful employment within threeyears of applying for the benefit or byage 65, whichever is the earlier.

If you do not take early payment of deferred benefits under either of theabove two methods, the deferred benefits will be paid from age 65 unless you opt to delay payment beyond that age. If you draw yourdeferred benefits after age 65, theywill be paid at an increased rate. Deferred benefits must be paid before age 75. However, if your pension is not in payment at age 60(women)/65 (men), the GMP element(if any) of your pension must be paidfrom that date (unless you are still in employment).



How do deferred benefitskeep their value?Your deferred benefits increase everyyear in line with the cost of livingwhile they are deferred. Your pensionwill continue to receive cost of livingincreases every year once it is paid toyou.

On your benefits being paid on or afterage 55, or if your benefits are paid before age 55 because of ill-health and you are permanently incapacitatedfrom engaging in any regular full-timeemployment, your benefits will be increased each year in line with thecost of living.

Do the tax rules on savingscover deferred benefits?There are HMRC controls on all yourpension savings – not including anystate retirement pension, state pension credit or any spouse’s, civilpartner’s, nominated cohabiting partner's or dependant’s pension youmay be entitled to.

The controls are referred to as the lifetime allowance and the annual allowance. The lifetime allowance isthe total capital value of all your pension arrangements which you canbuild up without paying extra tax. If the value of your benefits when you draw them exceeds your lifetimeallowance, a tax charge will be made

against the excess. The lifetime allowance for 2012/2013 is £1.5 million

The annual allowance is the amount by which the value of your pensionbenefits may increase, in any one year,without you having to pay a tax charge.Years run from 1 April to 31 March. The annual allowance for 2012/2013 is£50,000

You would only be subject to an annualallowance tax charge if the value ofyour pension savings, in a tax year, increase by more than £50,000. However, a three-year ‘carry-forward’rule allows you to carry forward unusedannual allowance from the last threetax years.

Other mattersIf your LGPS benefits are subject to a pension sharing order or earmarkingorder issued by the court following divorce or dissolution of a civil partnership, or are subject to a qualifying agreement in Scotland, yourbenefits will be reduced in accordancewith the court order or agreement. For more information, please contactthe Fund.



Your employer can:

– reduce pension benefits if a LGPSmember ceases to be employed asa result of a criminal, negligent orfraudulent act, or omission.

– forfeit a LGPS member’s pensionrights if the Secretary of State agrees and the member has beenconvicted of a serious offence connected with their employment.

You are not allowed to:

– assign your benefits. Your LGPS benefits are strictly personal andcannot be assigned to anyone else or used as security for a loan.

What will happen if I die before receiving my deferred benefits?If you leave with deferred benefitsafter 31 March 2008 and die beforereceiving them, the following benefitsare payable:

A lump-sum death grant of five times your deferred annual pension.The Fund has absolute discretion whendeciding who to pay any death grantto. The LGPS, however, allows you toexpress your wish as to who youwould like any death grant to be paidto by completing and returning anomination form. You can complete anomination form or make a new oneat any time. If any part of the deathgrant has not been paid within twoyears, it must be paid to your personalrepresentatives, ie, to your estate.

A survivor's pension: a pension will bepaid to your husband, wife, registered civil partner or, subject to certain qualifying conditions, your nominated cohabiting partner. This pension ispayable immediately after your death for the rest of their life and willincrease every year in line with thecost of living.

For your husband or wife: the pensionpayable is equal to 1/160th of yourfinal pay times the membership yourdeferred pension is based on, unlessyou marry after leaving, in which caseit could be less. If you marry whileyour pension is deferred:

– your husband’s pension is based onyour membership after 5 April 1988,(excluding, unless you were marriedto your husband at some timewhile you paid into the LGPS, additional membership purchasedby you or granted to you by youremployer or the Scheme),

– your wife’s pension is based on yourcontracted-out membership after 5 April 1978.

For your civil partner: the pensionpayable is equal to 1/160th of yourfinal pay times the membership yourdeferred pension is based on.

For your nominated cohabitingpartner: the pension payable is equalto 1/160th of your final pay timesyour membership in the Scheme after 5 April 1988, plus any of yourmembership before 6 April 1988 for



which you have paid additional contributions so that it counts towardsa nominated cohabiting partner’spension.

If your membership in the LGPS includes a guaranteed minimum pension (GMP), your wife’s pension forthat part of your membership prior to6 April 1997 must not be less than half your GMP. Your husband or civilpartner’s pension for that part of yourmembership prior to 6 April 1997must not be less than half your GMPbuilt up after 5 April 1988.

Children's pensions: these are payableto eligible children and increase everyyear in line with the cost of living.The amount of pension depends onthe number of children you have:

– If a survivor's pension is being paidto your husband, wife, civil partneror nominated cohabiting partner,one child would receive 1/320th of your final pay times the membership your deferred pensionis based on, while two or more children would receive 1/160thshared equally between them.

– If there is no husband’s, wife’s, civilpartner’s or nominated cohabitingpartner's pension being paid, onechild would receive 1/240th of yourfinal pay times the membership

your deferred pension is based on, while two or more children would receive 1/120th shared equally between them.

Eligible children are your children.They must, at the date of your death:

– be under 18 and be wholly ormainly dependant on you, or

– be aged 18 or over and under 23, be dependent on you, and be infull-time education or undertakingvocational training (although adependant child who commencesfull-time education or vocationaltraining after the date of your death may be treated as an eligible child up to age 23), or

– in some cases, a dependent child ofany age who is disabled may beclassed as an eligible child.

In all cases, the children must havebeen born before or within a year ofyour death.

If you paid additional contributions tobuy extra LGPS pension and you optedto pay for dependant's benefits whenyou took out your original contract,then extra benefits will be payable toyour husband, wife, registered civilpartner or nominated cohabiting partner and to eligible children.



TRANSFER OF YOUR LGPS PENSION RIGHTS

What happens if I change jobsbut remain in the LGPS?If you are changing your job, but stillworking in local government or for another employer who offers youmembership of the LGPS, or if you rejoin the LGPS before your deferredbenefits are paid, you can usually askfor your LGPS pension rights to betransferred to your new job (you cannot transfer membership built up as an employee to membership in theScheme as a councillor or mayor, andvice versa). They will not be transferredautomatically. If you wish to transferyour pension rights you must elect todo so within 12 months of rejoiningthe LGPS – your employer can allowlonger. This in an employer discretion;you can ask your new employer whattheir policy is on this matter.

If you choose to transfer them, you will have one set of benefits which will be based on your entire period ofLGPS membership and your final pay in your new job.

Although transferred membershipwithin the LGPS in England or Waleswill normally count on a day-for-daybasis, membership transferred to Scotland or Northern Ireland maycount at a different length.

If your new job is less well paid, youwill need to decide whether it may bebetter not to join the benefits together.

If you wish to transfer your LGPS pension rights, you should contact usor your new LGPS administrator assoon as possible to find out about thisand about the matters you will need toconsider in making your decision.

What if I have two or more LGPSjobs?If you have two or more jobs whereyou pay into the LGPS at the sametime and you leave one (or more) butnot all of them, and you are entitled to deferred benefits from the job (orjobs) you have left, you can choose totransfer your deferred benefits to thejob you are continuing in. If you arenot entitled to deferred benefits fromthe job (or jobs) you have left, youcannot have a refund of your contributions and you will be able to transfer your benefits to the job you are continuing in. The amount of membership you will be granted in the continuing job will be adjusted to reflect any difference in the whole-time rates of pay between thejobs as follows:

Membership in the jobyou have left

x

whole-time rate ofpay in the job thathas ceased

whole-time rate ofpay in the job that is continuing



What happens if my job is transferred to a private contractor?If your job is transferred to a privatecontractor, the contractor will normallybe required to provide a pensionscheme that is broadly equivalent tothe LGPS. This does not mean that thenew scheme must mirror the benefitsof the LGPS, but the value of the package offered by the new schememust be broadly equivalent to theLGPS. You would have the same options available to anyone else leavingthe LGPS before retirement.

Alternatively, the contractor may beable to become an admission body inthe LGPS. This would allow you to stayin the LGPS so long as you were working on the delivery of the contracted-out service. If the contractor becomes an admission body, your LGPS membership prior to the transfer of your job to the contractopr will be automatically aggregated with your post-transferLGPS membership.



What will happen if I wish totransfer my LGPS benefits toanother (non-LGPS) scheme?If you are joining another pensionarrangement, you may wish to consider transferring your LGPS benefits to it. This may even be to an overseas pension scheme orarrangement that meets HMRCconditions. You cannot transfer yourbenefits if you leave less than one year before age 65. An option to transfer must be made before age 64 or, if later, within six months ofleaving. If you transfer your LGPS benefits and you have paid AVCsarranged through the LGPS (in-houseAVCs), you must transfer your AVCfund.

Your new pension provider will requirea transfer value quotation, which,under the provisions introduced by the Pensions Act 1995, the Fund willguarantee for a period of threemonths from the date of calculation,known as the ‘guarantee date’. Your

new pension provider can then adviseyou of the additional benefits thetransfer will buy in their scheme.

A written option to proceed with theguaranteed transfer value must be received within the three-month guaranteed period. If you opt to proceed, the normal time limit forpayment of the guaranteed transfervalue will be six months from theguarantee date. If payment is notmade within this period, the Fund will need to recalculate the value as at the actual date of payment and pay the recalculated value or, if it isgreater, the original value plus interest.

Transfer values are calculated inaccordance with the terms and conditions of the Local Government Pension Scheme (Administration) Regulations 2008 (as amended) whichcomply with the requirements of the Pensions Schemes Act 1993.



If you are considering whether to transfer benefits, make sure you have full information about the two pensionarrangements: details of what your benefits are worth in the LGPS and details of what your benefits would beworth in the new pension scheme, iftransferred. When you compare your options, don’t forget that your LGPS benefits are guaranteed inflation increases. Transfers to public sectorschemes usually give benefits that arebroadly equivalent to those in theLGPS, provided you apply for thetransfer within 12 months of joiningyour new pension scheme.

Transferring your pension rights is not always an easy decision to make. Therefore, you may wish to seek thehelp of an independent financial adviser before you make a decision to transfer your deferred benefits to a personal pension plan, stakeholderpension scheme, buy-out insurancepolicy or an employer’s money purchase scheme, as you will be bearing all of the investment riskwhich could significantly affect yourfuture pension benefits.

If a full transfer payment is made, youwill not be entitled to any further benefits from the LGPS for yourself,your spouse, civil partner, for any cohabiting partner nominated by you,or any benefits for your dependants.

If you have opted out of the Schemebut not left local government, a transfer value is only available in respect of membership after 6 April1988.



Who can help me if I have a query orcomplaint?If you are in any doubt about yourLGPS benefit entitlements, or have aproblem or question about your LGPS membership or benefits, pleasecontact the Fund (details can be foundon the back page of this booklet). We will seek to clarify or put right anymisunderstandings or inaccuracies asquickly and efficiently as possible.

If your query is about your contributionrate, please contact your employer’s personnel/HR or payroll section so theycan explain how they have decidedwhich contribution band you are in.

If you are still dissatisfied with anydecision made in relation to theScheme you have the right to haveyour complaint independently reviewedunder the Scheme’s internal disputesresolution procedure (IDRP).

There are also a number of other regulatory bodies that may be able toassist you.

Here are the various ways you canask for help with a pension problem.

Internal disputes resolutionprocedure (IDRP)In the first instance, you should writeto the person nominated by the bodywho made the decision about whichyou wish to appeal. You must do thiswithin six months of the date of thenotification of the decision or the actor omission about which you are complaining (or such longer period as the nominated person considersreasonable). This is a formal review ofthe initial decision or act or omissionand is an opportunity for the matterto be reconsidered. The nominatedperson will consider your complaintand notify you of his/her decision. Ifyou are dissatisfied with that person’sdecision, (or their failure to make a decision) you may apply to the Fund’sadministering authority to have it reconsidered.

The Fund can tell you who youremployer's nominated person is andsupply you with a more detailedleaflet on the internal disputes resolution procedure and relevant timelimits together with a form to fill in oryou can ask your employer. Contactdetails can be found on the back pageof this booklet.

HELP WITH PENSION PROBLEMS



The Pensions Advisory Service(TPAS)TPAS is available at any time to assistmembers and beneficiaries of theScheme in connection with any pensions query they may have or anydifficulty which they cannot resolvewith their scheme administrators.TPAS can be contacted at:

11 Belgrave RoadLondonSW1V 1RBTelephone: 0845 601 2923

Pensions OmbudsmanIn cases where a complaint or dispute cannot be resolved after theintervention of TPAS, an applicationcan be made, within three years of theevent, to the Pensions Ombudsmanfor an adjudication.

The Pensions Ombudsman can investigate and determine any complaint or dispute involving maladministration of the Scheme ormatters of fact or law and his or her decision is final and binding (unless thecase is taken to the appropriate courton a point of law). Matters where legal proceedings have already started cannot be investigated by the Pensions Ombudsman.

The Pensions Ombudsman can be contacted at:

11 Belgrave RoadLondonSW1V 1RBTelephone: 0207 630 2200

The Pensions RegulatorThis is the regulator of work-based pension schemes. The Pensions Regulator has powers to protect members of work-based pensionschemes and a wide range of powersto help put matters right, whereneeded. In extreme cases, the regulator is able to fine trustees or employers, and remove trustees from a scheme. You can contact thePensions Regulator at:

Napier HouseTrafalgar PlaceBrightonBN1 4DWTelephone: 0870 606 3636



How can I trace my pension rights?The Pension Tracing Service holds details of pension schemes, including the LGPS, together with contact addresses. It provides a tracing service for ex-members of schemes with pension entitlements (and their dependants) who have lost touch withprevious schemes. All occupational and personal pension schemes have to register if the pension scheme has current members contributing to theirscheme or people expecting benefitsfrom the scheme.

If you need to use this tracing service,please write to:

The Pension Tracing ServiceThe Pension ServiceTyneview Park, Whitley RoadNewcastle upon TyneNE98 1BATelephone: 0845 600 2537

Also, don’t forget to keep your pension providers up to date withany change in your home address.



Customer charter

– To deal with you promptly, fairly and efficiently at all times and to give you the best possible service in accordance with the standards.

– To give you the standard of service you want.

– To consult you wherever possible and to take accountof your views before we make any changes.

– To be accountable to you for what we do by monitoring the quality of our service and reporting onhow well we’ve lived up to our standards.

PENSIONS SERVICE



Standards of serviceOur standards of service are set out on the following pages. They specify themaximum turnround times in whichwe aim to take the action indicated.Better turnaround times may beachieved in practice. In any event, the stated times will be reviewed atregular intervals. The target daysstated are working days.

What will happen to my benefits if I choose to defer them?

Benefits statementsWe will provide a benefits statementwithin ten days of receiving the deferred member’s request for detailsof the current value of their deferredbenefits (as increased in line with thecost of living).

Annual benefits statementsWe will provide each deferred memberwith a benefits statement annually showing the current value of their deferred benefits (as increased in line with the cost of living).

Deferred benefits into paymentProvided we hold a current address, we will send details of the benefitspayable so that they are received bythe deferred member not later thanthe day before they are due to comeinto payment, and we will pay the deferred member’s tax-free cashlump-sum, if applicable, so that it isreceived on the day payment is due.

If we do not hold a current address, we will make every effort to trace thedeferred member and we will send details of the benefits payable and paythe deferred member’s tax-free cashlump-sum within ten days of receivingall of the information we require tomake payment.

Telephone password serviceThe pensions service at Wolverhamptonis always looking for ways to improveits service, and has introduced a newpersonal service that lets you take careof most of your LGPS needs by telephone.

You can call to check your membershipdetails, request personal information oreven change your address. To benefit from this service and for security reasons, you must first register. You do this by completing a form which enables you to set up a passwordunique to you.

Your password can be any suitableword of your choice, for example, yourmother’s maiden name, your place ofbirth, etc.

Then, every time you call the pensionsservice to request personal details orto make a change, you will be asked to confirm your password and at leasttwo other pieces of information personal to you. When staff are confident about your identity, theywill process your request and providewritten confirmation of any changeactioned by you.



If you would like to register this service, you must first complete a registration form which can be obtained by contacting CustomerServices on 0300 111 1665.

Web-portal service for deferred membersThe Fund’s new web-portal service is an exciting facility that allows our members to access their pensionrecords online. After a simple registration process, not only will yoube able to view certain documents held on your records but also notify theFund electronically of any changes toyour personal circumstances.

We hope that the web-portal servicewill help improve the way we communicate with you, as future statements will now be made availableonline.

You will also be able to notify us of any changes in your personal circumstances.

Visit https://portal.wmpfonline.comand follow the simple steps to register– even if it is to take a quick look atwho you have currently nominated toreceive payment of your death grant.

The Fund would normally recommend that you update yournomination form every two to threeyears. If you would like to change yournomination form, please visit our website at www.wmpfonline.com

View all our Fund publications onlineReports, forms, newsletters, guides and all Scheme information relating to the West Midlands Pension Fund is available on our new website.

wmpfonline.com



Who runs the LGPS?The LGPS is one of the largest public sector pension schemes in the UK. It is a nationwide pension scheme forpeople working in local government orworking for other types of employerparticipating in the Scheme. The LGPSis administered locally through regionalpension funds.

How is the Scheme amended?The Scheme regulations are madeunder the Superannuation Act 1972.Changes to the rules are discussed at national level by employee and employer representatives but can only be amended with the approval of Parliament. Your administering authority must keep you informed of any changes that are made.

FREQUENTLY ASKED QUESTIONS (FAQS)



Are the Scheme benefits protected?The Local Government PensionScheme (LGPS) is a statutory, fundedpension scheme. As such, it is very secure because its benefits are defined and set out in law.

What other legislation applies tothe Scheme?The LGPS is a registered public servicescheme under Chapter 2 of Part 4 ofthe Finance Act 2004. It achieved automatic registration by virtue of Part 1 of Schedule 36 of that Act (because the scheme was, immediatelybefore 6 April 2006, both a retirementbenefits scheme approved under Chapter I of Part XIV of the Incomeand Corporation taxes Act 1988 and a relevant statutory scheme under section 611A of that Act).

This means, for example, that you receive tax relief on your contributions. It complies with the relevant provisions of the Pension Schemes Act 1993, thePensions Act 1995 and the PensionsAct 2004.

What other information am I entitled to?You are entitled to obtain a copy ofthe Local Government PensionScheme (Benefits, Membership andContributions) Regulations 2007 (Statutory Instrument Number 2007No.1166) and the Local Government Pension Scheme (Administration) Regulations 2008 (Statutory Instrument Number 2008 No.239)and subsequent amendments.

The regulations are available from The Stationery Office at www.legislation.gov.uk

A current version, including allamendments, is available on the LocalGovernment Employers' website athttp://timeline.lge.gov.uk/

A copy of the regulations may be inspected at the Fund’s offices. In addition, you are entitled to view,and take copies of the Fund’s AnnualReport and Accounts.



Administering authorityWolverhampton City Council is theadministering authority for the WestMidlands Pension Fund (the Fund).

West Midlands Pension FundPO Box 3948WolverhamptonWV1 1XP

Additional voluntary contributions(AVCs)These are extra payments to increaseyour future benefits. You can also payAVCs to provide additional life cover.

All local government pension funds havean in-house AVC scheme where you caninvest money through an AVC provider,often an insurance company or buildingsociety. AVCs are deducted directly fromyour pay and attract tax relief.

Civil partnershipA civil partnership is a relationshipbetween two people of the same sex(civil partners) which is formed whenthey register as civil partners of eachother.

Contracted outThe LGPS was contracted out of thestate earnings-related pension scheme(SERPS) and is contracted out of thestate second pension (S2P). Thismeans that, prior to state pension age,you pay reduced national insurancecontributions between the lower earnings limit and the upper accrualspoint (unless you have opted to paythe married woman’s/widow’s reduced rate of national insurance).

The LGPS guarantees to pay you a guaranteed minimum pension (GMP) for being contracted out of the state earnings-related pension scheme(SERPS) and, for membership after 5 April 1997, the LGPS must meet aminimum ‘reference scheme’ test prescribed under the Pensions Act 1995.

DiscretionThis is the power given by the LGPS toenable your employer or administeringauthority to choose how they will applythe Scheme in respect of certain provisions. Under the LGPS, your employer or administering authorityare obliged to consider certain of thesediscretionary provisions and to passresolutions to form a policy of howthey will apply the provision. In respectof some of the remaining discretionaryprovisions, they are advised to do so.They have a responsibility to act with‘prudence and propriety’ in formulatingtheir policies and must keep themunder review. You may ask your employer or the administering authoritywhat their policy is in relation to a discretion. Your administering authorityis Wolverhampton City Council.

Guaranteed minimum pension (GMP)The LGPS guarantees to pay you a pension that is at least as high as youwould have earned had you not beencontracted out of the state earnings-related pension scheme (SERPS) at any time between 6 April 1978 and 5 April 1997. This is called the guaranteed minimum pension (GMP).

SOME TERMS WE USE



InflationThis reflects the movement of pricescovering a range of goods and servicesover time. The amount by whichpensions are increased annually isbased on movement in the cost of living during the 12 months to September.

Nominated cohabiting partnerA cohabiting partner is someone youare living with as if you are married orin a civil partnership. To be able tonominate a cohabiting partner, of either opposite or same sex, to receivea survivor's pension on your death,your relationship has to meet certainconditions laid down by the LGPS.


Date of birth New state pension age

Before 6 April 1950 60 6 April 1950 - 5 April 1951 In the range 60 - 61 6 April 1951 - 5 April 1952 In the range 61 - 62 6 April 1952 - 5 April 1953 In the range 62 - 63 6 April 1953 - 5 August 1953 In the range 63 - 64 6 August 1953 - 5 December 1953 In the range 64 - 65

State pension age equalisation timetable for women

Date of birth New state pension age

6 December 1953 - 5 April 1954 In the range 65 - 66 After 5 April 1954 66

Increase in state pension age from 65 to 66 for men and women

The state pension age will then increase to 66 for both men and women from December 2018 to October 2020.

Under current legislation, the state pension age is due to rise to 67 between 2034 and 2036, and to 68 between 2044 and 2046.

State pension ageThis is the earliest age you can receive the state basic pension. State pension age is currently age 65 for men. State pension age for women is currently beingincreased to be equalised with that for men. The Government has announcedthat it will speed up the pace of state pension age equalisation for women, sothat women’s state pension age will reach 65 by November 2018.


State earnings-related pensionscheme (SERPS)This is the extra earnings-related partof the state pension that employedpeople could earn up to 5 April 2002.LGPS members were automaticallycontracted out of SERPS, and mostpaid lower national insurance contributions as a result. SERPS wasreplaced by the state second pension(S2P) from 6 April 2002.

State second pension (S2P)The state second pension (formerlySERPS) is the additional state pension,payable from state pension age by the Department for Work and Pensions. Initially, S2P was an earnings-related pension but from April 2009 it beganbuilding up as a flat-rate pension, achieving full flat-rate accrual byaround 2030. LGPS members are contracted out of S2P and most paylower national insurance contributionsas a result. More information on theS2P is available from the DWP Pensions Service.



Data ProtectionTo protect any personal information held on computer, West Midlands Pension Fund is registered underthe Data Protection Act 1998. This allows members to check that their details held are accurate. The Fundmay, if it chooses, pass certain details to a third party, if the third party is carrying out an administrativefunction of the Fund, for example, the Fund’s AVC provider. Members who wish to apply to access theirdata on Data Protection Act grounds should contact the Fund’s Data Protection Officer on (01902)554498, via email at [email protected]

This authority is under a duty to protect the public funds it administers, and to this end may use information for the prevention and detection of fraud. It may also share this information with other bodies administering public funds solely for these purposes.

The information in this booklet is based on the Local Government Pension Scheme (Administration) Regulations 2008 and the Local Government Pension Scheme (Benefits,Membership and Contributions) Regulations 2007 (as amended). It applies to individualswho were contributing members of the LGPS on 1 April 2008 or who have since joined theScheme. This booklet is for general use and cannot cover every personal circumstance, nordoes it cover specific protected rights that apply to a very limited number of employees. In the event of any dispute over your pension benefits, the appropriate legislation will prevail, as this booklet does not confer any contractual or statutory rights and is providedfor information purposes only. This booklet has been issued by the West Midlands PensionFund (the Fund) whose contact details appear on the back page.

The administering authority for this fund is Wolverhampton City Council. This booklet doesnot cover the benefits afforded to councillor members of the Local Government PensionScheme.



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Write to us at:

West Midlands Pension FundPO Box 3948WolverhamptonWV1 1XP

Email us on:

pensionfundenquiries@ wolverhampton.gov.uk

Telephone Customer Services on:

0300 111 1665Visit our website at:

wmpfonline.com

Fax us on:

0845 230 1565Minicom/Typetalk:

01902 554607

Send us a text on:

Text WMPF + your message to 60066Standard short code network charges apply

Lines are open during the following times:8:30am to 5.00pm Monday -Thursday8:30am to 4.30pm Friday

Calls may be monitored for training purposes

CONTACT INFORMATION

The LGPS is currently undergoing consultation on a new-look Schemefrom 1 April 2014. For more details of how the new LGPS will workfrom that date and to find out how you can comment on the proposals, see the Fund’s website.


all about your deferred benefits

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