Local Government Pension Scheme Hampshire Pension Fund Scheme member’s retirement declarations and options form Explanatory notes Please read these notes before completing the enclosed form. What is the form about? You need to provide us with information and options for your retirement before we can process your retirement benefits under the Local Government Pension Scheme (LGPS). HM Revenue and Customs (HMRC) require us to check if the total amount of benefits due to you from all registered pension schemes exceeds a Lifetime Allowance set by HMRC as tax charges may apply. To do this we need you to declare your entitlement to any other benefits. Before your LGPS benefits can be paid, you must complete and return the declaration form enclosed with these notes. The notes explain the information you need to give on the form. What will happen if I do not return the form? If you do not return the form, your payment may be delayed. If we have to pay your benefits without having received your form, we will assume that you have exceeded the Lifetime Allowance and your benefits will be taxed in full. Where do I return the form? Pensions Services Section County Treasurer’s Department Hampshire County Council The Castle Winchester SO23 8UB September 2009 Local Government Pension Scheme Hampshire Pension Fund Section 1 Personal details Please complete all parts of this section and enclose your birth certificate (clear photocopies are acceptable) or a copy of the relevant pages of your passport. Section 2 Bank and building society account details Please give us full details of the bank or building society where you want your pension and any retirement lump sum paid. Section 3 Marital status and civil partnership Please tick the appropriate box and enter the date of marriage, civil ceremony or divorce, if relevant. As proof of your partnership, you will need to send us copies of your marriage or civil partnership certificates or decree absolute or judicial separation. Please let us know if you have nominated your co-habiting partner so we can ensure that our records agree. If you have done this, you will have completed a ‘Nomination of co-habiting partner’ form and supplied appropriate evidence. You can download the form now, if you wish, from http://www3.hants.gov.uk/finance/pensions.htm. You have the option to nominate your co-habiting partner only if you were paying into the LGPS on or after 1 April 2008. Section 4 Giving up annual pension to receive a tax-free retirement lump sum You may choose to give up part of your annual pension to receive a tax-free lump sum. Doing so will not affect the value of pensions payable to your dependants after your death. If you have service before 1 April 2008, you will automatically receive a tax-free lump sum, but you can still choose to increase this amount by giving up some annual pension. For each £1 of annual pension that you give up, you will get £12 as a tax-free lump sum. There is a limit to the total tax-free lump sum you can take, which is set by HMRC. If you have paid additional voluntary contributions (AVCs) to Equitable Life or Zurich, you may also choose to use some or all of your in-house AVC fund to increase your tax-free lump sum. You can use the figures on your latest annual benefit statement to help you estimate how much annual pension you may wish to give up. Alternatively, you can indicate that you wish to take the maximum lump sum allowed. If you ask for an estimate, we will need to contact your employer for pay and service details. We will let you know that we have done this when we acknowledge your form. If there is any delay, please contact your employer to check they have sent us the necessary information. The option to give up pension to receive a tax-free lump sum is only available before we process your retirement benefits. Under HMRC rules, we cannot change the amounts payable after we have received your decision, so please ensure you are happy with your decision before returning the completed form. Section 5 Taking your benefits before your earliest retirement date You can take voluntary early retirement and receive your pension benefits from age 60, provided you have at least three months’ membership or have transferred pension rights into the LGPS. If you retire voluntarily before age 65 or before your earliest retirement date, your pension and lump sum will be reduced. The table below shows the reductions that will apply, depending on how many years early you take your pension. Pensions reduction Pensions reduction Years Lump sum reduction % % % early all members male female 1 6 5 2 2 11 10 5 3 16 15 7 4 20 19 9 5 24 23 12 To pay you the reduced benefits, we need you to sign the declaration. This tells us that you are voluntarily taking these benefits and that you understand that the reduction will be permanent. If you wish to have an estimate of these reduced benefits before signing the declaration, please contact us on 01962 845588. We will process your request as soon as possible, but your pension benefit payments may be delayed because we will need to contact your employer for pay and service information. If your employer has approved an ill-health retirement or is making you redundant, you will receive full unreduced benefits. Section 6 Other pensions and compensation HMRC have introduced a Lifetime Allowance, with effect from 6 April 2006. If the value of your total benefits exceeds this allowance, you will have to pay tax on the excess. The Lifetime Allowances for the next two tax years are as follows. Tax Lifetime year Allowance 2009/2010 £1.75 million 2010/2011 £1.8 million Although most people’s benefits will not exceed these limits, HMRC rules require us to assess whether your total benefits will exceed the Lifetime Allowance. If your benefits will exceed the allowance, we will apply tax charges to any pension and lump sum to which you are entitled under the LGPS. Section 6.1 Please provide details of any pensions that will: have a starting date before your LGPS benefits have a starting date on the same day as your LGPS benefits. You should not declare: benefits payable under the state pension scheme, including state pension credit benefits to which you are entitled as the widow(er), surviving civil partner or other dependant of a member of any pension scheme benefits that will be payable after your LGPS pension starting date. Section 6.2 If you have any other benefits becoming payable on the same date as your LGPS benefits, please state the order in which you want them assessed against the HMRC Lifetime Allowance. The order you choose is important because it will decide which schemes: will be responsible for settling any tax liability if you exceed the Lifetime Allowance must take the value of the others into account when assessing the total value of the Lifetime Allowance. However, the order you state will not affect the total amount of any tax you pay. Your other pension providers will be able to tell you the percentage of Lifetime Allowance your other pensions are using up. If your benefits exceed the Lifetime Allowance, the tax charge will be 55% of the excess lump sum and 25% of the excess pension (plus any PAYE deductions). If HMRC has sent you a certificate under ‘transitional protection’ rules, you should give your pension administrators a copy when any pension benefit (including a LGPS pension) is due. When they assess the value of your benefits against the Lifetime Allowance, the administrators will take account of the protection offered by the certificate. Section 6.3 Please give details of any transfers of pension rights to overseas pension arrangements on or after 6 April 2006. Section 7 Declaration Once you have completed all the sections of this form, please complete and sign the declaration and return the form to the address shown, together with all relevant certificates. If you intend to use part or all of your retirement lump sum to pay additional contributions to a pension scheme, or to any other pension arrangement, this is known as ‘recycling’ and special tax rules may apply. If you break the recycling rules, you will have to pay a tax charge of 40% to 55% of the value of your retirement lump sum. You can find guidance on recycling on the HMRC website: www.hmrc.gov.uk/pensionschemes/ Hampshire County Council complies with the Data Protection Act 1998 and will use your data only for processing your pension rights. Local Government Pension Scheme - Hampshire Pension Fund Declaration form (scheme member’s retirement declarations and options form) Please complete all sections of this form and return it as soon as possible to the address shown on the last page, enclosing all relevant certificates. We can pay your benefits only after receiving your completed form and all relevant certificates. Section 1 Personal details Name Title Address Postcode Telephone National Insurance no. Date of birth Employer (last LGPS employer if claiming deferred benefits) Reason for leaving Date of retiring/leaving Requested date for payment of pension (if different from date of retiring/leaving) If you are claiming early payment of your deferred benefits, the requested date of payment above should be at least six weeks from the date you complete this form to give us adequate notice of your request. Section 2 Bank or building society account details Please complete the details below to tell us where you would like us to pay your pension and any retirement lump sum. Name of bank/building society Sort code - - Account name Account number If building society, roll number Branch address and postcode Signature Date Form – page 1 of 4 Section 3 Marital status / civil partnership Please complete and tick the appropriate boxes and enclose all relevant certificates. What is your status? I am single and have never married I am legally separated I am married I have a civil partner Enter the date of marriage / civil partnership: I am a widow/widower My civil partnership has been I am divorced dissolved/revoked Enter the date of death of spouse / divorce / dissolution or revoking of civil partnership: I have previously completed and returned the ‘Nomination of co-habiting partner’ form or I am doing so now. The option to make a nomination applies only to members who were paying into the LGPS on or after 1 April 2008. Section 4 Giving up part of your pension to receive a retirement lump sum 4.1 Do you wish to give up part of your annual pension to receive a tax-free lump sum? (Please tick one of the following three options.) 1. Yes – and I have shown the amount of pension I wish to give up below. Maximum allowed or Specific amount £………….. (The extra lump sum will be 12 times the amount you give here.) 2. No – I do not want to give up any annual pension. 3. Please send me an estimate* of my benefits before I make a decision. * Important – for us to give you an estimate we need information from your employer. We will process your request as soon as we can, but your retirement benefit payments may be delayed if your employer delays sending us that information. 4.2 Do you have an AVC fund? Yes No Please go to Section 5. If yes, please tick one of the two options below: 1. The amount of my AVC fund I wish to use to increase my lump sum is £………… 2. Please send me details of the options available for my accumulated in-house AVC fund (this may delay payment as we need to get information from the AVC provider). Important notice about AVCs If you opt to receive any of your AVC fund as a cash lump sum, we will not be able to put any of your pension benefits into payment until we receive the final cheque from the AVC provider. If you continue to make payments into your AVC fund in your last month of employment, we may not be able to process any of your benefits for up to six weeks after you retire. We will not be able to put any benefits into payment until we receive your decision about your AVC in writing. Section 5 Taking your benefits before your earliest retirement date Form – page 2 of 4 If you are voluntarily taking your benefits before your earliest retirement date, they will be reduced under Local Government Pension Scheme (LGPS) regulations. If this applies to you, please tick the following declaration*: I declare that I am voluntarily applying for early payment of my benefits. I understand that early payment will permanently reduce my benefits. *If you wish to take your benefits before your earliest retirement date but you have not ticked the above declaration, we will return this form to you. If you are not sure whether this section applies to you or if you wish to have an estimate of these reduced benefits before signing this declaration, please contact us on 01962 845588. We will process your estimate request as soon as possible, but your benefit payments may be delayed because we will need to contact your employer for pay and service information. Section 6 Other pensions and compensation 6.1 Do you have any other occupational or personal pension benefits that will be payable before the day your LGPS pension starts or that are already in payment? (Do not include any state pension or any spouse’s, civil partner’s or dependant’s pension you receive.) Yes Please give details below: No Please go to Section 6.2. % of Current amount Lifetime Date pension was Pension provider of annual Allowance payable from pension/lump sum used (if known) 6.2 Do you have any other pension benefits becoming payable on the same date as your LGPS pension? Yes No Please go to Section 6.3. If yes, please state the order in which you want them to be assessed against the HMRC Lifetime Allowance: % of Lifetime Order in which you want them Pension provider Allowance used to be assessed 6.3 Has any overseas transfer out been made or will any such transfer be made, on or after 6 April 2006? Yes No If yes, please give details below: Section 7 Declaration Form – page 3 of 4 Once you have completed sections 1 to 6 of this form, please read the following statements carefully and ensure you fully understand them. Then sign the declaration below. If you have any questions, please phone us on 01962 845588 or email email@example.com. I have read the accompanying notes and completed this form. All the information I have given on this form is correct and complete to the best of my knowledge. I will not use my retirement lump sum to make contributions to one or more registered pension schemes, in breach of HM Revenue and Customs (HMRC) recycling rules (see section 7 of the notes). I understand that the decisions I have made on this form cannot be changed once Pensions Services has received and processed the form. If further tax becomes payable because the information I have given proves to be wrong, I understand that I will be liable to pay the tax charge and any resulting penalty that HMRC may impose. I have: provided all the necessary information and completed all sections signed section 2 to certify that my bank details are correct ticked the statement in section 5 of this form, if it applies to me enclosed the following certificates (clear photocopies are preferable to original certificates): My birth certificate or clear photocopy of my passport My marriage certificate My civil partnership certificate My decree absolute My civil partnership dissolution certificate My judicial separation Signed Date Please return your completed form, enclosing any certificates, to: Pensions Services Section, County Treasurer’s Department, Hampshire County Council, The Castle, Winchester, Hampshire SO23 8UB We will return original certificates.