Calculating Your Benefits

You need to have more than 2 years’ LGPS membership to be entitled to a pension, unless you have transferred in previous pension rights, or already have a deferred pension or pension in payment with another LGPS Fund in England or Wales.

Membership from 1 April 2014

From 1 April 2014, you will build up a pension, calculated as 1/49th of the pensionable pay you have received and paid pension contributions on, for each scheme year (from 1 April to 31 March).

Your pensionable pay is the amount of pay on which you pay your pension contributions.

The pension that you build up each year (1 April to 31 March) is added to your pension account and is revalued in line with the appropriate cost of living index each April. The example below shows how a pension is calculated, assuming pay increases by 1% and inflation increases at 2.2% each year.

Revaluation

Opening Balance

Pensionable Pay

Pension Earned

Closing Balance

Year 1

£0.00

£0.00

(£21,000 x 1/49)

£428.57

£428.57

Year 2

£9.43

£438.00

(£21,210 x 1/49)

£432.86

£870.86

Year 3

£19.16

£890.02

(£21,422 x 1/49)

£437.18

£1,327.20

Year 4

£29.20

£1,356.40

(£21,636 x 1/49)

£441.55

£1,797.95

Year 5

£39.55

£1,837.50

(£21,852 x 1/49)

£445.96

£2,283.46

If you have elected to join the 50/50 section of the scheme, the rate at which your pension builds will be 1/98th of your pensionable pay for the period you are in the 50/50 section.

The example below is based on the same information as above but the member elected to join the 50/50 section for 6 months of year 3.

Revaluation

Opening Balance

Pensionable Pay

Pension Earned

Closing Balance

Year 1

£0.00

£0.00

(£21,000 x 1/49)

£428.57

£428.57

Year 2

£9.43

£438.00

(£21,210 x 1/49)

£432.86

£870.86

Year 3

£19.16

£890.02

(£10,711 x 1/49)

£218.59

  (£10,711 x 1/98)

£109.30

£1217.91

Year 4

£26.79

£1,244.70

(£21,636 x 1/49)

£441.55

£1,686.25

Year 5

£37.10

£1,723.35

(£21,852 x 1/49)

£445.96

£2,169.31

Membership before 1 April 2014

If you have membership before 1 April 2014, your pension for this period is based on your total membership built up in the Scheme and your Final Pay – the pensionable pay you receive in your final year of service or one of the two previous years’ pay if better.  If your pay is reduced or restricted within 10 years of retirement, you also have the option to base your final salary benefits on the average of any 3 consecutive years pay in the last 13 years (ending on a 31 March).

If you are part time, your Scheme membership will count at its part time length when working out your pension and your Final Pay calculated on the pay you would have received if you had been working full time.

For membership built up after 31 March 2008, you will receive an annual pension based on 1/60th of your Final Pay.

example

If a Scheme member has 6 years’ membership before 1 April 2014 and a Final Pay of £15,000.  Their annual pension would be:

1/60 x 6 x £15,000 = £1,500

If the same employee had worked half time for 2 of those years, their annual pension would be:

4 years full time

1 years (2 years at half time)

5

1/60 x 5 x £15,000 = £1,250

 

If you joined the LGPS before 1 April 2008, for membership built up to 31 March 2008, you will receive an annual pension based on 1/80th of your Final Pay and an automatic tax-free lump sum of three times your pension.

 

You can also give up some of your pension to receive a lump sum at retirement (or increase the lump sum if you have membership before 1 April 2008).  Please refer to the Commutation page for further details.