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Purchase of Additional Pension

The new Local Government Pension Scheme (LGPS) scheme effective from 1 April 2008 allows members to buy additional pension by paying additional contributions. You may purchase additional pension up to a maximum of £5000 per annum, in multiples of £250 per annum, over any number of years, providing that the contract is complete before your 65th birthday.

You can also increase any survivor’s benefits as well as your own. These would be payable in the event of your prior death to your spouse, civil or nominated partner at the rate of 37.5% of your own pension purchased by additional contributions. This naturally costs more than increasing your own benefits alone and includes benefits payable in respect of any eligible children at the time of your death.

Should you choose to leave the scheme before the completion of your contract you will be credited with the proportion of additional pension purchased to the date of retirement. Should you choose to retire on a voluntary basis before age 65 and receive immediate payment of your benefits there may be a reduction to your pension benefits due to the increased length of time over which your benefits will be paid.

We have produced a calculator to enable you to assess the cost of buying additional pension. Simply input the amount of pension you would like to purchase (in multiples of £250 pa), your age and the period in years over which you wish to pay. You should also indicate if you would like to purchase an additional survivor’s pensions payable in the event of your death. The calculator will display the additional contributions you would need to pay each month. You should note that the cost is liable to be adjusted over the period of the contract in line with actuarial guidance.

If you are interested in purchasing additional pension benefits after assessing the cost, please contact LPFA to make arrangements through a pension administrator.

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