An employee can opt to end their membership of the LGPS at any time, and also opt back in by completing the appropriate forms.
Opting out
Employees can tell their employer in writing by completing and sending an LGPS 04 Opt out form to their HR or Payroll department.
An employee:
- Cannot complete an opt out form before commencing employment.
- Can opt out of the LGPS at any time.
- Can opt back into the main LGPS scheme at any time.
Employers cannot issue opt out forms to employees. Employees must get the opt out form directly from the Avon Pension Fund Member website.
An employee ceases to be an active member in the scheme from the date they specify on the LGPS 04.
Opting in
If an employee who is opted out of the scheme wishes to rejoin the scheme, they can do this by downloading and completing the LGPS 10B form from the Avon Pension Fund Member website and sending to their employer to place them back into the scheme.
Types of opt out
The outcome for the employee and whether they get a refund on their contributions, depends on when they choose to opt out. There are three options:
Opting out within three months
If employees opt out within three months of joining, they will be treated as if they were never a member of the LGPS and will be entitled to a refund of their employee contributions via payroll.
Opting out after three months
If employees opt out after three months but before two years they will be offered a refund which they can claim a refund via the Pension Fund. An unclaimed refund can remain ’deferred’ in the fund for up to five years, after which it must be paid. A member might choose not to claim a refund if they think they might re-join in the future or wish to consider a transfer out.
Opting out after two years of membership
If employees opt out after two years of membership, they will be entitled to a deferred benefit.
How to process an employee opt out
Submit the LGPS04 opt out form, provided by the employee, using i-Connect document upload.
Ensuring that the employer section has been completed.
You will need to choose one of the following document upload options:
- Opting out after three months (Opt out - Over 3 months)
- Opting out within three months refunded through payroll (Opt out - Payroll refund)
- Opting out before contributions are taken (Opt out - No contributions) This is only applicable if the employee has an i-Connect record.
You do not need to provide a leaver form for an employee opting out of the LGPS.
What happens next?
Opting out within three months
- Refund employee contributions via payroll.
- Employee should be auto enrolled at the next auto enrolment date unless they have opted out within 12 months of employers re-enrolment date.
Opting out after three months
- Avon Pension Fund will write to the member with details of the refund due to them if less than 2 years LGPS membership.
- Employee should be auto enrolled at the next auto enrolment date unless they have opted out within 12 months of employers re-enrolment date.
Opting out after two years of membership
- Avon Pension Fund will write to the member with details of the deferred benefit.
- Employee should be auto enrolled at the next auto enrolment date unless they have opted out within 12 months of employers re-enrolment date.
An auto enrolled employee may opt back out by completing a new LGPS 04.