A New Look Local Government Pension Scheme in Scotland from 1 April 2009

If you were already paying into the LGPS on 31 March 2009 and you continued to have a contract of employment or continued as a councillor on 1 April you will have been automatically transferred to the New Scheme.

Let's take a look at the main changes made to the LGPS in Scotland from 1 April 2009.  

Joining the LGPS

From 1 April 2009 to be able to join the LGPS you need to be under age 75 and, if you are an employee, have a contract of employment that's for at least 3 months. New employees and councillors who are eligible are automatically brought into the Scheme.

If you have previously opted out of membership you can opt back into the Scheme provided you are under age 75 and, if you are an employee, have a contract of employment that's for at least 3 months.

New contribution rates

From April 2009, scheme members will no longer pay a flat contribution rate. Instead, a five tier contribution system has been introduced - with contributions based on how much of your pay falls into each tier. This has been designed to give more equality between the cost and benefits of scheme membership.

If you work part-time, your contribution rate will be worked out on the whole-time pay rate for your job, although you will only pay contributions on the pay you actually earn.

Find out more on the new contribution rates from 1 April 2009.

How are my benefits worked out in the new scheme?

The New LGPS is still a final salary scheme for employees. This means that your benefits are normally based on your final year's pay and the number of years you have been a member of the Scheme.

Councillor's benefits continue to be based on career average pay.

How your benefits are worked out when you retire changed from 1 April 2009. 

Find out more about how benefits are worked out from 1 April 2009.

Does the new scheme change when I can retire?

The scheme's normal pension age remains at 65.  If you continue working as an employee or as a councillor beyond age 65, you can stay in the scheme but you must draw your benefits by age 75. Benefits drawn after 65 will be increased.

To be entitled to retirement benefits you must have been a member of the LGPS for at least 2 years or have transferred in other pension rights.

Changes have been made to the earliest age benefits can be paid if you are made redundant, are retired on efficiency grounds, take early retirement or take flexible retirement with your employer's consent. The ill-health retirement benefits package has also been changed.

Redundancy, efficiency retirement and flexible retirement do not apply to councillors.

Find out more about these changes and when you can retire under the new scheme.

Improved death benefits

Provided you pay into the LGPS on or after 1 April 2009, there have been improvements to the Scheme's benefits if you die.

Find out more about improved death benefits.

Increasing your benefits

Under the new scheme, changes have been made from 1 April 2009 to the ways you can buy extra LGPS benefits.

Find out more about increasing your benefits in the new scheme.

And finally...

One of the main attractions of the LGPS is that your employer pays a large part of the cost of providing the benefits.

It is however important that overall the scheme remains affordable, so increases or decreases in the cost of providing the scheme may, in future, need to be shared between members and employers. This will be in accordance with guidance from the Scottish Ministers.