A reminder about the impact of 2016 Pension and NIC changes for LGPS members

It was much talked about at the time but like lots of Pension details, sadly, soon forgotten.

Until 2016, members of the LGPS (and other employment pensions) enjoyed paying lower National Insurance Contributions (NICs) (referred to as being contracted out) while still being treated as contributing fully to their State Pension.

Then the UK government decide to retrospectively remove that protection leaving many LGPS and other pension scheme members with a shortfall in terms of the new state pension of as much as around £50 of the weekly state pension.

Generally, NICs were adjusted and people began to make up about £5 of that weekly state pension for each further year worked.

This meant most people would recover any losses by the time they retired.

A few people who were close to state retirement age (or unable to work longer for other reasons) would be left with a reduced state pension compared to what they might have expected before the change.

Employers, including DCC, did issue letters/statements about this issue back in 2016 which gave advice on checking your state pension forecast etc.

This was circulated through the Confirm Policies portal in Employee Resources and would presumably have been distributed as hard copy to staff unable to access the portal.

Sadly, management have allowed the document location to be changed breaking the link from the portal. We are seeing if this can be restored.

A number of recent retirees have been caught out by discovering their state pension was lower than expected.

The government provides access to a forecast of your state pension and your history of National Insurance Contributions.

You can access that service here.

If you have concerns, the council's pensions/payroll teams may also be able to offer some advice.

Contact Tayside Pension Fund

Please do check your forecast and make sure you aren't caught out at retirement.