Planning Your Retirement The Local Government Pension Scheme

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Late RetirementWhat if I carry on working after age 65?If you carry on working after age 65 you may continue to pay into the Scheme, accruing further benefits. Youcan receive your pension when:• you retire, or• you reach the eve of your 75 th birthday, or• you have your employer’s consent for flexible retirement – see page 16whichever occurs first.If you draw your pension after age 65 the pension you accrued prior to age 65 will be increased to reflect thefact that it will be paid for a shorter time.Your pension has to be paid before your 75 th birthday.20
HM Revenue and Custom controls and your Retirement BenefitsFrom 6 April 2006 HM Revenue and Customs introduced controls on the pension savings you can have beforeyou become subject to a tax charge.The lifetime allowance is the total capital value (see page 8) of all your pension arrangements, but not yourstate pension, which you can build up without paying extra tax.If the value of your benefits when you draw them (not including any state retirement pension, state pensioncredit or any spouse’s, civil partner’s, cohabiting partner’s or dependant’s pension you may be entitled to)exceed your lifetime allowance, a tax charge will be made against the excess. The lifetime allowance for2008/2009 is £1.65million.The Lifetime Allowance for Future Years2009/2010 £1.75 million2010/2011 £1.80 millionThere are protections for benefits earned up to 5 April 2006 in respect of those high earners affected by theintroduction of the lifetime allowance from 6 April 2006. You can find out more about these from the leaflet‘Your LGPS benefits and tax changes in England and Wales’ available from the Fund or on www.lgps.org.ukThe Fund will let you know the value of your LGPS benefits on retirement and ask you about any otherpensions you may have in payment, so we can work out whether we need to deduct a recovery tax charge.If you do not provide this information promptly it could delay the payment of your pension. Also, under HMRevenue and Custom rules, if the LGPS makes an unauthorised payment or if you recycle your lump sum backinto a pension arrangement, there will be a tax charge.Income Tax and your PensionYour LGPS pension is taxable, but your lump sum is tax-free. Whether you pay tax when you retire dependson the amount of your pension and your personal circumstances including:• whether you are going to work again or have other income• whether you have any income from savings and investments• how old you areWhen you RetireTax form P45 is a statement showing your current tax code, pay and tax details to date that an employernormally gives an employee on leaving work.When you retire on an immediate occupational pension you only get a copy of your P45. Your employer hasto forward tax form P45 directly to the Fund where the Payroll Section applies your appropriate tax codeagainst your pension under a special temporary arrangement which does not permit any tax refunds. This isbecause the tax office needs to re-assess your tax code to take account of any income and any changes inyour personal circumstances.On behalf of the tax office, the Payroll Section sends you a tax form P161 that you should complete promptlyand forward directly to the tax office. Once your tax code is re-assessed, the tax office notifies you and theFund of your new tax code and any tax refund due is paid with your LGPS pension.21
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Page 12 and 13: Your State PensionIn addition to yo
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Page 16 and 17: Flexible RetirementCan I have a gra
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Page 24 and 25: PayslipsThe Fund does not normally
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Planning Your Retirement The Local Government Pension Scheme

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