Local Government Pension Scheme Hampshire Pension Fund Retirement declaration form Explanatory notes

Transcription

1 Local Government Pension Scheme Hampshire Pension Fund Retirement declaration 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. Please complete the form not earlier than 3 months before your intended retirement date. 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. What will happen next? We will calculate or pay your pension benefits when we receive this correctly completed form and copies of relevant documents. information from your employer about your membership and pay. If you have deferred (frozen) pension benefits, we already have this. if needed, authority from your employer or former employer to pay your pension benefits early. if you paid AVCs, the payment from the provider which they cannot pay before your retirement. We will write to tell you how much your pension and any retirement lump sum will be. If there is a lump sum, we will pay it on your retirement date or as soon after as possible. We will set up your payroll record and make your first pension payment on the following payroll date. Where do I return the form? Pensions Services Hampshire County Council The Castle Winchester SO23 8UB

2 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. We will pay your pension and any lump sum by BACs. Unfortunately we cannot pay your pension or lump sum into a Post Office account because they cannot accept these types of payments. Section 3 Marital status and civil partnership Please tick the appropriate box and enter the date of marriage, civil ceremony or divorce, if relevant. Please enclose a copy of your marriage certificate, civil partnership certificate, decree absolute, final order or judicial separation. Please let us know if you have nominated your co-habiting partner so we can ensure that our records agree. You will have sent us a Nomination of co-habiting partner form with appropriate evidence. You can nominate a co-habiting partner by downloading the form from You may nominate your partner only if you were paying into the LGPS on or after 1 April Section 4 Giving up annual pension to receive a tax-free retirement lump sum Section 4.1 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. You can use your last 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 request pay and service details from your employer and let you know that we have done this. If there is a delay, please ask your employer if they have sent the information. The option to give up pension to receive a tax-free lump sum is only available before we process your retirement benefits. HMRC rules mean that we cannot change the amounts payable after we receive your decision, so please ensure you are happy with your decision before returning the completed form.

3 Section 4.2 If you paid additional voluntary contributions (AVCs) to Prudential, Equitable Life or Zurich you may use some or all of your in-house AVC fund as part of the tax free cash from your total pension pot. This means you may be able to give up less or even none of your annual pension from your standard benefits to receive maximum tax free cash. You must use any remaining amount of your AVC fund to buy an annuity either from the open market or from the Local Government Pension Scheme. If you want details of the options available before you make a decision about your in-house AVC fund, tick the third option in this section. We will send you details after getting the information about the current value of your AVC from the provider. We must bring your LGPS benefits into payment all at once. Your AVC is part of your LGPS benefits. The AVC provider is not allowed to release the fund until your retirement date so there may be a delay of around four weeks before your benefits can be paid. If you pay AVCs in the month before you retire the delay may be around eight weeks, as your employer must send the final payment to the AVC provider before your fund can be released. 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 (for those who meet the 85 year rule and are fully protected from its removal), your pension and lump sum will be reduced. The table below shows the reductions, depending on how many years early you take your pension. Years early Pensions reduction % male Pensions reduction % female Lump sum reduction % all members 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 would like an estimate of the reduced benefits before signing the declaration, please contact us. We will provide your estimate as soon as possible, but your pension may be delayed while we contact your employer for pay and service information. If your employer has approved ill-health retirement, voluntary or compulsory redundancy, you will receive full unreduced benefits and so you do not need to complete this section. Section 6 Other pensions and compensation HMRC sets a Lifetime Allowance. If the value of all your benefits exceed the allowance, you must pay tax on the excess. Lifetime Allowances for the next three years are: Tax year Lifetime Allowance 2010/ million 2011/ million 2012/ million (reduced from the previous year) Most people s benefits are within these limits, but under HMRC rules we must assess the value of your benefits. If they exceed the allowance, we will apply tax charges to your LGPS pension and lump sum.

4 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 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 can 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. They will take account of the protection when they assess your benefits against the Lifetime Allowance. Section 6.3 Please give details of any transfers of pension rights to overseas pension arrangements on or after 6 April This should include the value of your crystallised benefits against the lifetime allowance. 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. Please ensure you send evidence of any name change that will allow us to verify your identity (we cannot pay your benefits if you only send a birth certificate but you no longer use your maiden name). 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:

5 Retirement declaration form Local Government Pension Scheme Hampshire Pension Fund Please complete all sections of this form and send it as soon as possible to the address on the last page. We can pay your benefits only after receiving your completed form and all relevant certificates. Section 1 Personal details Name Address Title Postcode Telephone National Insurance no. Date of birth Employer (last LGPS employer if claiming deferred benefits) Reason for leaving Date of retiring/leaving Requested start date for payment of pension (only if claiming deferred benefits) 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. We will pay your pension by BACs. Unfortunately we cannot pay your pension or lump sum into a Post Office account. Name of bank/building society Sort code - - Account holder s name Account number If building society, roll number Branch address and postcode Signature Date Form page 1 of 4

6 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 married Enter the date of marriage / civil partnership: I am legally separated I have a civil partner I am a widow/widower My civil partnership has been dissolved/revoked I am divorced 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. (Please note, 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 options below: 1. I wish to use my AVC fund to maximise my overall tax free lump sum 2. The amount of my AVC fund I wish to use to increase my lump sum is 3. 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 have an AVC, we will not be able to calculate or pay any of your pension benefits until we receive your written decision about your AVC. we receive the cheque from the AVC provider. They cannot pay the AVC to us without the last payment from your employer, or before your retirement date. This means that your pension may be delayed by at least four weeks after your retirement. If you pay AVCs in your final month, the delay may be around eight weeks. Form page 2 of 4

7 Section 5 Taking your benefits before your earliest retirement date (this section does not need to be completed if you are taking voluntary or compulsory redundancy or any other retirement where there is no early payment reduction such as ill health or efficiency) 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 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, spouse s, civil partner s or dependant s pension you receive.) Yes Please give details below: No Please go to Section 6.2. Pension provider Date pension was payable from Current amount of annual pension % of Lifetime Allowance used (if known) 6.2 Do you have other pension benefits becoming payable on the same date as your LGPS pension? Yes No Please go to Section 6.3. If yes, please give details below and state the order in which you want them to be assessed against the HMRC Lifetime Allowance: Pension provider Amount of annual pension and lump sum due Order in which you want them to be assessed 6.3 Have you transferred any pension rights to an overseas pension arrangement after 5 April 2006? Yes No If yes, please give details below, including the amount of crystallised benefits: Form page 3 of 4

8 Section 7 Declaration 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 or pensions@hants.gov.uk. 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 civil partnership certificate My civil partnership dissolution certificate Other documentation (please specify) My marriage certificate My decree absolute My judicial separation Please ensure that the enclosed documentation supports any change of name that you have had (if you no longer go by your maiden name you need to send documents as well as your birth certificate as we cannot pay your benefits without official verification of your current identity). Please complete the form not earlier than 3 months before your intended retirement date. Signed Date Please return your completed form, enclosing any certificates, to: Pensions Services Hampshire County Council The Castle Winchester, Hampshire SO23 8UB We will return original certificates. Hampshire County Council complies with the Data Protection Act 1998 and will use your data only for processing your pension rights Form page 4 of 4