Some frequently asked questions about the impact of the coronavirus pandemic on LGPS members' pension benefits.
The coronavirus pandemic affected stock markets, will this affect the value of my LGPS pension?
No, the LGPS is a defined benefit pension scheme which means your pension is based on your salary and how long you’ve paid in. Your pension is not linked to stock market performance, so both your contributions and your pension, whether in payment or not, will be unaffected.
The only exception to this is Additional Voluntary Contributions (AVCs). If you have an AVC, it's possible the value may have reduced during the pandemic. This will depend on the funds you have chosen to invest in. You should contact your AVC provider for more information about this.
My pay was reduced, what impact will this have on my pension?
This will depend on the reason for the reduction.
Sick leave
If your pay was reduced or you received no pay because you were off work due to sickness or injury, your pension built up as if you were at work receiving normal pay. You continue to pay contributions on any pay you receive during sick leave.
Authorised unpaid leave
If your employer allowed or required you to take a period of unpaid leave, you will not build up any pension for the period unless you choose to pay Additional Pension Contributions (APCs) to purchase the amount of pension lost.
You can find more information about paying APCs, use an online calculator and download an application form from the LGPS member website.
Coronavirus job retention scheme leave
The government confirmed that they didn't expect public sector organisations, such as councils, to use the coronavirus job retention scheme, except in some very limited cases. Public sector employers continued to pay staff in the normal way even if they were not at work.
If your employer was able to use the job retention scheme and you both agreed, your employer might have been able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus. This is known as being ‘on furlough’.
If this applied to you, your employer could have paid 80% of your wages up to a monthly cap of £2,500. The government provided funding to help your employer to do this. Employers could choose to top up your pay to 100%, but if you received less pay when you were ‘on furlough’, the amount of pension you built up during this period will have been reduced.
The gov.uk website provides more information about the job retention scheme.
Emergency Volunteering Leave (EVL)
The government introduced a volunteering scheme to allow the public to contribute to the coronavirus response. The scheme allowed workers to take unpaid statutory emergency volunteering leave to volunteer in health and social care authorities.
If you took a period of EVL, your LGPS pension benefits will have built up in the same way as if you worked normally.
Other leave reasons
For information about the impact on your pension if you're away from work for any other reason, such as child related leave or reserve forces leave, visit our absent from work page.
Did pension scams increase during the coronavirus outbreak?
Yes, watch out for scams related to coronavirus. These scams take many forms and could be about insurance policies, pensions transfers, or high-return investment opportunities, including investments in cryptoassets.
If you suspect a scam, call Action Fraud straight away tel: 0300 123 2040.
Scammers are sophisticated, opportunistic and will try many things. They’re also very likely to target the vulnerable. Beware of investments that appear to be too good be true. To help protect yourself:
- reject offers that come out of the blue
- beware of adverts on social media channels and paid for or sponsored adverts online
- use the Financial Services Register and warning list to check who you’re dealing with
- don't click links or open emails from senders you don't already know
- avoid being rushed or pressured into making a decision
- if a firm calls you unexpectedly, use the contact details on the Financial Services Register to check that you’re dealing with the genuine firm
- don't give out personal details (bank details, address, existing insurance, pensions or investment details)