How are my benefits calculated?
Depending on when you joined the scheme, your pension may be based on two different calculations. The following is a summary of those calculations and for which period they apply.
Pension benefits built up before 1 April 2008
Pensions built up before this date are based on 1/80th of your final salary, multiplied by your membership before 1 April 2008. In addition to this, you will also receive an automatic lump sume worth 3 times your pre 1 April 2008 pension.
Pension: Final salary / 80 x Membership
Lump sum: Final salary / 80 x Membership x 3
Pension benefits built up from 1 April 2008 to 31 March 2014
Benefits built up between these dates are based on 1/60th of your final salary multiplied by your membership between 1 April 2008 to 31 March 2014.
Final salary / 60 x Membership
There is no automatic lump sum for membership after 31 March 2008 but you can choose to give up some of your pension to provide a lump sum for this period of membership. For each £1 of pension you give up, you will receive £12 added to your lump sum. This is subject to HMRC restrictions and we will let you know what your options are, when you reach retirement.
What counts as membership?
Your membership will normally include any of the following:
- How long you have been a member of the LGPS worked out in years and days, (not including membership for which you already receive an LGPS pension or hold another LGPS deferred benefit or membership from another job which you are still paying into the LGPS)
- Membership purchased by a transfer from another scheme
- Any extra membership you have bought with additional contributions or by converting in-house additional voluntary contributions (AVCs) into membership
What if I worked part time?
If you worked part time, your membership will most likely be different to your actual calendar length membership. This is because your membership is reduced to the proportion of full time hours that you worked, during that period.
For example, if you worked 16 hours a week in a job with a full time equivalent of 32 hours a week, for 10 years, your benefits would be calculated on 5 years membership. This is because you worked 50% of the full time equivalent hours.
If your hours have changed during your membership of the Scheme, your benefits will be calculated to reflect the changes. If you do not have any contractual hours, your membership for each year in the LGPS will be calculated on average weekly hours worked during each year.