You have the right to opt out of the LGPS if you decide you do not wish to be a member. What happens if you opt out depends on how long you have been a member of the Scheme. You should think carefully before opting out. Opting out may reduce your income in later life. You may wish to get help from an independent financial adviser.

Your opt out decision

If you are thinking about opting out of the LGPS, you might want to consider moving to the 50/50 section of the Scheme. In the 50/50 section you pay half the normal contributions to build up pension at half the normal rate. You retain full life cover and ill health cover in the 50/50 section. You can view the section on Paying less (50/50 section) for more information.

If you have decided that the 50/50 section is not for you, you can opt out of the LGPS by completing the correct opt out form as shown below. 

You cannot opt out before the first day that you are a member. This will usually be the first day of your employment, but it may be the date your employer must bring you into the LGPS under Automatic enrolment rules.

Whatever your reasons for considering opting out of the Scheme:

• you must give this matter careful consideration before making a final decision
• you may wish to take financial advice before making a decision to opt out
• if you are opting out of the LGPS due to advice you have received you should ask for this advice in writing. 

In making your decision, you should also consider that:

• your employer meets a large part of the cost of providing the excellent range of secure benefits offered by the LGPS
• the LGPS is a valuable and important part of your employment package
• in most cases, you will pay more tax if you opt out of the LGPS. A basic rate taxpayer paying pension contributions of £100 a month will pay £20 more tax every month if they opt out
• if you opt out of the LGPS in an employment with less than two years’ membership, you will not be entitled to any scheme benefits.

If you are thinking of opting out of the LGPS, you will lose your entitlement to benefits such as a lump sum Death in Service payment and ill health Retirement unless you elect to join the 50/50 section.

Opting out before three months

What happens after you opt out depends on how long you have been a member of the LGPS.

If you opt out of the LGPS before you complete three months’ membership, you will be treated as never having been a member. Your employer will refund any contributions that you have paid through your pay.

Any contributions you have paid will be refunded if you opt out after less than three months, even if you have a deferred LGPS pension or an LGPS pension is being paid to you.

If, having considered the 50/50 option, you still decide the LGPS is not for you, you can leave the LGPS at any time on or after your first day of eligible employment.

Your employer is not allowed to provide you with an opt out form. You should consider independent financial advice before making the final decision to opt out. 

You can download the 'Opting out of Pension Saving (Under 3 months)' form below. It must be returned to your employer and not Merseyside Pension Fund. Sending the form to us will delay any refund of contributions that you may be eligible for.

Opting out with less than two years’ membership

If you wish to opt out and have been a member for three months or more, but you have not met the two-year qualifying period, you will have different options:

• You can take a refund of the contributions you have paid. 20% tax will be taken from your contribution refund.
• You can transfer your pension to another qualifying pension scheme. You may have a limited time in which you can elect to transfer. Contact your pension fund to find out about any time limits that will apply.
• If you were in the Scheme before 1 April 2014, you can choose to have deferred benefits in the LGPS.

You will not be able to take a refund of contributions if you opt out after being a member for more than three months if you already have a deferred LGPS pension or an LGPS pension in payment. You will be treated the same as a member who opts out after being a member for more than two years.

Your employer is not allowed to provide you with an opt out form. You should consider independent financial advice before making the final decision to opt out. 

If you wish to opt out and have been a member for three months or more, but you have not met the two-year qualifying period, you must contact us to request an opt out form on 0151 242 1392.

It must be returned to your employer and not Merseyside Pension Fund. Sending the form to us will delay any refund of contributions that you may be eligible for.

Opting out after more than two years

If you wish to opt out after meeting the two-year qualifying period, you will have deferred benefits in the LGPS. You will generally have the same options as anyone who leaves their job before retirement. But there are two main differences.

If you opt out:

• you cannot take your deferred pension until you have left your job, unless you reach age 75
• if you re-join the LGPS, you will not be able to join your two periods of Scheme membership together. You will have two separate sets of pension benefits in the LGPS.

For more information about deferred benefits, see the section on Leaving before retirement.

Your employer is not allowed to provide you with an opt out form. You should consider independent financial advice before making the final decision to opt out. 

If you wish to opt out and have been a member for more than two years, you must contact us to request an opt out form on 0151 242 1392.

It must be returned to your employer and not Merseyside Pension Fund. Sending the form to us will delay any refund of contributions that you may be eligible for.

Re-joining the LGPS

If you opt out, your employer is required to re-enrol you in the LGPS approximately every three years on a set re-enrolment date. They will only re-enrol you if you are an eligible jobholder.

If you opt out of the LGPS, you will almost always be able to opt back in again. You can opt in if you are still eligible to join the Scheme, and you are under age 75, by completing the 'Election to join the Local Government Pension Scheme (LGPS)' form below.

It must be returned to your employer and not Merseyside Pension Fund.