Your pension is based on your total membership built up in the Scheme and your Career Average Pay – the pay for each year or part year, ending on 31 March which is re-valued (other than the final year’s pay) by the rise in the Retail Prices Index between the end of the relevant year and the last day of the month in which your active membership ends.
The aggregate of each year’s re-valued pay is then divided by the total number of years and part years to arrive at the career average pay which is used to calculate your pension benefits.
For each year of membership in the Scheme, you will receive an annual pension based on 1/80 of your Career Average Pay, with an automatic tax free lump sum of 3/80 of your Career Average Pay for each year of membership.
Assume that a Councillor has been a member of the Scheme for 5 years, from 1 May 2007 to 30 April 2012. The average pay calculation would be calculated as follows:
|1/5/2007 – 31/3/2008||£6,645.00||From 1/4/2008 to 30/4/2012||£7,592.58|
|1/4/2008 – 31/3/2009||£7,250.00||From 1/4/2009 to 30/4/2012||£7,896.70|
|1/4/2009 – 31/3/2010||£7,500.00||From 1/4/2010 to 30/4/2012||£8,134.50|
|1/4/2010 – 31/3/2011||£7,500.00||From 1/4/2011 to 30/4/2012||£7,910.25|
|1/4/2011 – 31/3/2012||£7,500.00||From 1/4/2012 to 30/4/2012||£7,532.25|
|1/4/2012 – 30/4/2012||£625.00||£625.00|
|Divide by 5 = Career Average Pay||£7,938.26|
The annual pension would therefore be calculated as:
1/80 x Career Average Pay x Total Membership
1/80 x £7,938.26 x 5 = £496.14
The tax free lump sum would be calculated as:
3/80 x Career Average Pay x Total Membership
3/80 x £7,938.26 = £1,488.42