Section 16 - Early leaver options (leaving your employment)

Refund of contributions

If a member leaves your employment within three months and have paid Local Government Pension Scheme (LGPS) contributions, they are entitled to receive a refund of their contributions, less any tax and other statutory deductions. This refund is calculated and paid by Southwark Pension Services.

Once you have completed the leaver form, please ensure you post it to the address on the contact details page. Southwark Pension Services will then be able to process the refund and the employee will be treated as never being a member of the Scheme. If the leaver form is processed before the first pay, or the first contribution is due to be taken, there will be no refund due.

If a member leaves your employment (and the Scheme) after three months but with less than two years’ qualifying membership in the LGPS as a whole (including any transferred in pensionable service), they can request to have a refund of their own contributions less an adjustments for tax and other statutory deductions. This refund is calculated and paid by Southwark Pension Services.

The entitlement to a refund cannot be paid until the member has had a break of at least one month and one day from their date of leaving and cannot be paid if the member has any other LGPS benefits (either active with another job and/or employer, deferred benefits or benefits in payment, other than a survivor’s pension or a pension credit from a divorce). If the member has re-joined LGPS in another employment or is active with another job and/or employer, they will not be entitled to a refund and the membership will be combined with their new pension record for the new employment or the record for the other job, as appropriate.

If a member leaves the Scheme early with at least three months but less than two years’ qualifying membership within the LGPS as a whole (including any transferred in pensionable service), they are, as an alternative, entitled to a cash transfer sum to another pension arrangement.

If a member leaves their employment before becoming entitled to immediate payment of their benefits (i.e. before Normal Pension Age (NPA), and they have more than two years’ qualifying membership (including any transferred in pensionable service), they have an automatic right to a deferred benefit (also known as a preserved benefit).

Members can retain deferred benefits within the Southwark Pension Fund or they can elect to transfer their pension benefits to another pension scheme. Benefits can be transferred to another employer operating the LGPS, a non-LGPS public sector scheme or a private arrangement. Members can request a transfer to be done at the time they leave employment or at a later date, providing it is not requested within 12 months of their normal retirement age (NRA). Members can get the appropriate transfer request forms from Southwark Pension Services.

An active member can be retired, at any age, on ill-health grounds if they’re medically certified as being ‘permanently incapable of discharging efficiently the duties of his or her current employment’.

You as the employer, decide if a member qualifies for ill-health retirement and which level of benefits apply; but in doing so, you must have regard to the advice of a doctor qualified in occupational health medicine. This decision should be made only on medical considerations, based on a doctor’s certificate. Ill-health retirements do not incur a strain cost to you, as the cost is built into your employer contribution rate as part of the triennial valuation. Read Section 19 - Guidance for ill-health retirement for more information.