How Your Pension Increases
Each April, whilst receiving a pension from us, and providing you are aged 55 or over (or under age 55 and receiving a dependents or ill health pension), your pension will be adjusted each year in line with the cost of living index (CPI) usually resulting in an increase. This is based on CPI as at September of the previous year. If you are under 55 and your pension is in payment for any other reason it will normally be paid at a flat rate until age 55. At 55 it will increase to the level it would have been, had it had the increases applied since your date of leaving.
How is an increase applied?
Shropshire County Pension Fund will inform you each April if there is an increase, what the increase is, when it is applied from and your new pension payable for that year.
If you are under state pension age your LGPS pension is fully increased and paid by the Fund. Once you reach state pension age, the Department for Work & Pensions (DWP) pays any increases on the Guaranteed Minimum Pension (GMP) as part of your LGPS pension with your state pension – although the Fund pays the first 3% increase on the GMP generated by any membership after April 1988.
All increases to a GMP in respect of pre 88 GMP are paid by the DWP as part of your state pension.
What is a Guaranteed Minimum Pension (GMP)?
Until April 2016 the LGPS was contracted out of the State Earnings Related Pension Scheme (SERPS) under the old state pension, so if you were a member of the LGPS between 6 April 1978 and 5 April 1997, the LGPS must pay you a GMP based on the state entitlement you would have earned if you had not been a member of the LGPS during this time.
Once you reach state pension age your pension will be compared with this GMP and increased to the rate of your GMP, should this be higher. In most cases, your LGPS pension is higher than your GMP.