Newsletter - December 2022

Rest assured, nothing has changed

When the news reports instability in the world of investment markets it is reassuring to know that your pension is fully protected and unaffected by market changes. We are part of the LGPS, the Local Government Pension Scheme, which is a defined benefit scheme where benefits are set out in law and therefore fully protected from the impact of short-term market instability. 

Like all LGPS pension funds we are diversified long-term investors, securely managed to protect our members’ pensions from short-term fluctuations in market values. You can be assured that the pension you are building up is safe.

Summary of the Fund’s activities for Scheme year 2021/22

East Sussex Pension Fund must publish Annual Report and Accounts on or before 1 December following the end of each scheme year (1 April to 31 March). The report details the management and financial performance of the pension fund during the year.

Key highlights for scheme year 2021/22

The Fund was awarded the Local Government Pension Scheme (LGPS) Fund of the Year (over £2.5bn) at the Local Authority Pension Fund (LAPF) Investment awards 2021* and was also highly commended for its climate strategy.

• The Fund had £4,688 m of funds under management on 31 March 2022 to meet the accrued benefits, with a funding position of 107% comparing assets to liabilities, putting it in a very strong position.
• The investment return for the year to 31 March 2022 was 10.6%, which was an out performance of the benchmark by 0.5%, with returns outperforming the benchmark in each of the 1, 3 and 5-year periods.
• The membership of the Fund at March 2022 was 81,291 people (active 24,514, pensioner 23,131 and deferred 33,646) and 134 employer organisations.
• The Fund fully implemented a major restructure of team resources in recognition of increasing regulatory demands on LGPS Funds and increased reporting requirements to ensure that the Fund has sufficient resources to implement its strategies and policies.
• This was the first full year of our Pensions Administration Team fully operating back in-house. Service has remained very good.
• The Fund has taken climate strategy as one of the key focuses of its ongoing work, to develop an in depth of understanding of the financial risks to the Fund of the climate emergency and focusing on ways in which the Fund can both reduce this risk but also find opportunities to help with the energy transition to find sustainable solutions.

If you would like to view the Annual Report and Accounts in more detail, please access the report here – Annual Report and Accounts 2021 22 East Sussex Pension Fund.

Your pension at your fingertips

Did you know that we have an online Member Self Service Portal where you can:

• Update personal information such as your address or bank details

• Amend or add who you want to nominate to receive benefits on death

• View Annual Benefit Statements (ABS)– keeping you up to date with the pension benefits you have built up

Use benefit projectors to calculate the value of your pension:

• If you left the scheme

• If you retired before, at, or after your normal pension age

• If you died whilst working and hadn’t taken any benefits

If you require any assistance with MSS, then please contact the specialist MSS helpline on 0300 200 1027 rather than the main pensions helpline (0300 200 1020). 

Registration is simple - click here to find instructions on how to register

Existing users can log in by using this link and remind yourself what the portal has to offer.

Simple, friendly, informative

If you want to find out more about your LGPS pension and your options as a scheme member but you are short on time, look at the Pensions Made Simple videos.

These eight videos provide a quick introduction to topics, such as ‘How your pension works’, ‘Transferring your pension,’ ‘Protection for you and your family’ and ‘Life after work’.

Watch the videos now at:

Videos: LGPS (lgpsmember.org)

A useful way to find out more about your pension

The LGPS member website has a range of tools and calculators designed to support members.

These are a useful way to find out more about how your pension works, how much it costs, taking a lump sum, paying extra and pensions tax.

Tools and calculators: LGPS (lgpsmember.org)

Find out more…

1. Register for My Pension. Our online self-service portal allows you to view your benefits, update your contact details and add in beneficiaries.
2. Do not rely on your work email address. Update your online account with a personal email address, because it is more likely to stay with you for life.
3. Do not keep retiring a secret. The more notice you give your employer and colleagues, the more opportunity you will have to enjoy your last days at work. Aim for at least 3 months’ notice.
4. Visit our website. We have added all kinds of useful information to our website over the last 12 months. See for yourself at Homepage | East Sussex Pension Fund

Help with the decisions you face

Planning for retirement isn’t easy so we have produced a guide to support members.

Part one of the guide provides information about the Local Government Pension Scheme (LGPS) including:

• The financial protection the LGPS offers you and your family.
• Information about retirement and the decisions you must make.

Part two looks more widely at issues that may affect you in retirement including information about taxation and the State Pension. You can also find links and contact details for organisations that can support you.

Access the Planning for retirement guide here.

You can pay extra now to boost your income in later life.

You may wish to consider paying extra pension contributions now to boost your income in later life. There are two ways you can pay extra contributions in the LGPS. You can pay Additional Pension Contributions, Additional Voluntary Contributions* or both. You can also pay extra into  an alternative pension arrangement (such as a Personal Pension Plan) via a pension provider of your choice.

Find out more here

*ESPF has selected Prudential (a leading savings and investments business) as our chosen provider for AVCs. The plan has several investment options to choose from. Deciding to take out an AVC plan is an important financial decision so we recommend that you get guidance and/or independent financial advice to help you decide if this route is most suitable for you.

Help in the cost-of-living crisis

We recognise the UK is going through a difficult time and some members will be under financial stress. Opting-out of your pension may seem a sensible money-saving idea but by doing so you would be putting your longer term future security at risk.

However the LGPS does have a 50/50 option.

The 50/50 option is a temporary way for you to pay half your usual pension contributions without leaving the pension scheme. The downside of the 50/50 option is that you only build up half the usual pension while you are in it. Read our cost-of-living article to find out more.

Cost of Living Crisis | East Sussex Pension Fund

Don’t let a scammer ruin your retirement

Pension scams are on the rise in the UK. The internet and advances in digital communications mean these kinds of scams are getting more common and harder to identify. Recent Financial Conduct Authority research found that a quarter of consumers would withdraw pension savings earlier as a result of the cost of living crisis – making them vulnerable to scammers. There are different types of pension scams, but they can all lead to the possibility of you losing a lifetime’s worth of savings in a moment.

The Government introduced some new pension transfer rules on 30th November last year to help prevent people becoming victims of pension scams. Pension schemes now have new powers to refuse a request to transfer a pension to another pension scheme if there is a risk it might be a scam. The changes remove an individual’s automatic right to a transfer and require pension schemes to complete additional tasks to satisfy themselves that a member’s pension benefits are not at risk.

We may contact you to find out more information about the scheme you want to transfer to, how you were contacted and who advised you about the transfer. It is important that you answer our questions fully as soon as you can. We may stop the transfer if you do not provide the information required, or if that information indicates that you are likely to be at risk of a scam.

You may be required to attend a Pension Safeguarding Guidance appointment given by MoneyHelper. Transfers between Public Sector schemes are not affected by this new legislation.

If you are worried or would like more information on scams, then please check out these links.

Useful resources

ESPF website – Avoiding Pension Scams

MoneyHelper – How to spot a Pension Scam

Financial Conduct Authority – How to avoid Pension Scams

If you are looking for free guidance on Pensions please visit the MoneyHelper website.

MoneyHelper joins up money and pensions guidance to make it quicker and easier to find the right help, MoneyHelper brings together the support and services of three government-backed financial guidance providers: the Money Advice Service, the Pensions Advisory Service and Pension Wise.

Nominating a beneficiary

 With an LGPS pension, you have the added reassurance of knowing that your loved ones will be looked after when you are gone. If you die before taking your pension, it provides a tax-free lump sum to the people you care about most. You can express a wish as to whom you would like to receive this lump sum (also known as your death grant), by nominating a beneficiary. The easiest way to do this is via our Member Self-Service Portal (see above). By nominating sooner rather than later, it can save your loved ones a great deal of time and effort further down the line.

You can nominate your spouse or partner, son or daughter, family member or lifelong friend, a charity that is close to your heart or a combination of beneficiaries.

While your pension scheme has absolute discretion over who your death grant goes to (so it does not form part of your estate for tax purposes), they will take your wishes/nomination into account.

Nominate your beneficiary today by visiting our Member Self-Service Portal (My Pension):

Log in – Member Self-Service Portal

Register - Member Self-Service Portal

No need to apply for the new underpin

When the LGPS changed from a final salary to a career average pension scheme in 2014,  protections for older scheme members were introduced - known as the underpin. The Court of Appeal ruled that younger members of the Judges’ and Firefighters’ Pension schemes have been discriminated against because the protections did not apply to them.

The Government decided that the principles established to remove this discrimination will apply to all public sector pension schemes including the LGPS.

The proposed changes would mean that a revised underpin will apply to members, regardless of their age, who were active in the scheme on 31 March 2012 (with no disqualifying break over five years). Those in scope will receive the better of final salary and CARE for the period 1 April 2014 and 31 March 2022.

If you fit the qualifying criteria and your benefits would be better, the underpin will be automatically applied.

You do not need to apply for this.