Pension Credits in the LGPS
If you get divorced and your ex-spouse has built up pension benefits in the LGPS you could be awarded a share of those benefits if a pension sharing order is issued by the Court, or the benefits are subject to a qualifying agreement in Scotland.
When the pension sharing order is implemented you will be given the choice of having a 'pension credit' in the LGPS or having your share transferred to another appropriate pension scheme. You ex-spouse's pension fund will inform you of the pension benefits that would be provided if you were to take a pension credit in the LGPS and of the cash equivalent value of your share should you wish to transfer it to another appropriate pension scheme. If you fail to make a decision within the specified timescale you will be awarded a pension credit in the LGPS automatically.
If you are awarded a pension credit in the LGPS the benefits awarded to you are personal benefits, they are held in your own right and are completely separate to those of your ex-spouse. There is no provision for a partner's pension to be paid if you were to re-marry and die before the new spouse, nor will any children's pensions be payable upon your death. Children's pensions remain "attached" in full to your ex-spouse's benefits in the Local Government Pension Scheme.
The date you can choose to take payment of your pension credit without a reduction for early payment depends on two factors:
- whether the "transfer day" was on or after 1 April 2014
- whether your ex-spouse was an active member of the LGPS on or after 1 April 2014
The "transfer day" is the date the pension sharing order takes effect.
If the transfer day was on or after 1 April 2014 AND your ex-spouse was an active member of the LGPS on or after 1 April 2014
General information about pension credits in the LGPS
The pension payable to you from the LGPS is payable for life and will increase in line with the cost of living.
If you die before the pension credit has been brought into payment, an amount equal to 3 years pension, as increased in line with inflation, will be payable as a lump sum death grant. If you die within 5 years of the pension credit being brought into payment, the balance of 5 years worth of pension will be paid as a lump sum death grant, less an adjustment for any pension converted to lump sum, if applicable.
As an alternative to a pension credit in the LGPS you are entitled, at any time up to one year before the normal pension age relating to your pension credit, to transfer the Cash Equivalent of your pension credit to another qualifying pension scheme. If you wish to investigate a transfer to another scheme you should contact your pension fund.
You may wish to note that the date that your own pension credit benefits in the LGPS are payable from is totally independent of the date that your ex- spouse may draw his / her benefits. Your ex-spouse's remaining pension rights and those granted to you are not detrimentally affected should either of you remarry. However, your pension credit rights could be subject to a Pension Share if any re-marriage ended by reason of divorce or annulment (as could your ex-spouse's remaining pension rights if he / she were to re-marry and the marriage were to end by reason of divorce or annulment).