50/50 scheme
Did you know the LGPS offers members the flexibility to pay half their normal contribution rate and build up half their normal pension? This is called the 50/50 section of the LGPS and can be a really good option when members are struggling financially due to the rising cost of living.
If members choose this option, then importantly they will still retain full life cover, meaning that if they were to die whilst paying into the scheme, then a grant of three times their annual pay will be paid to their loved ones.
Being in the 50/50 section also means members keep their ill-health cover, providing the LGPS criteria (below) is met, so they could take immediate payment of pension benefits, no matter their age, if they have to leave their job due to ill health.
To get an ill-health pension the member must have been in the scheme for two years and the employer decides (after receiving an opinion from an Independent Registered Medical Practitioner) that:
- The member is, because of ill-health or infirmity of mind or body, permanently incapable of discharging efficiently the duties of the employment they were engaged in, and;
- The member, because of ill-health or infirmity of mind or body, is not immediately capable of undertaking any gainful employment.
In the 50/50 scheme, members will also receive tax relief on contributions and their employer pays in as well, while still building up valuable pensions benefits even during times of financial hardship.
Members can ask their employer for a 50/50 election form, or they can contact the Shropshire County Pension Fund. If members elect to join the 50/50 section, they will start paying reduced contributions from the next available pay period.
The 50/50 section is designed to be a short-term option to help in times of financial crisis and the employer must move members back into the main section roughly every three years. However, there is no limit to the number of times members can elect to move from the main section to the 50/50 section and back again.
