How is my LGPS pension worked out?
The LGPS is a defined benefit scheme; this means the pension benefits you get when leaving the scheme are worked out using a set formula.
From 1 April 2014, every member pays into a career average revalued earnings scheme or CARE scheme. For each year you are in the scheme, your pension builds up based on a proportion of your pensionable pay received in that year.
Depending on when you become a member of the LGPS, there will be a specific formula to work out how your benefits have built for that period of membership.
Membership from 1 April 2014
For membership from 1 April 2014, each scheme year (April – March), a 1/49th of your pensionable pay (2014 definition) is added to your pension account.
This means the pensionable pay you receive for each scheme year you are a member will be divided by 49 and will equal the pension built up for that year. Each following scheme year of membership will build up the same way and will be added to your pension account. To ensure that your pension account keeps up with the cost of living, it will be revalued each year.
Amount of pension built up for individual scheme year in pension account = Pensionable pay (2014 definition) divided by 49.
You can visit the LGPS member web page, 'How is your pension calculated?', for more information on pension accounts built up from 1 April 2014.
Membership between 1 April 2008 to 31 March 2014
1/60th of your final pay (2008 definition) for each year of membership
All membership up until 31 March 2008
1/80th of your final pay (2008 definition) for each year of membership + 3/80ths for automatic lump sum
Example of calculation of LGPS benefits
The following example shows how LGPS benefits are calculated for a member:
- retiring at normal pension age on 31 March 2019
- with 39 years of LGPS membership
- whose final pay is £22,000
who has built up a pension account since 1 April 2014:
Benefits based on 28 years’ membership up to 31 March 2008-
Pension: 28/80th x £22,000 = £7,700
Lump sum: 3 x 28/80th x £22,000 = £23,100
Benefits based on six years’ membership from 1 April 2008 to 31 March 2014-
Pension: 6/60th x £22,000 = £2,200
Benefits built up in the career average scheme from 1 April 2014 (CARE):
Scheme year |
Opening balance |
Pension built up in Scheme year |
Total account 31 March |
Cost of living adjustment (CPI) |
Updated total account |
2014/15 |
£0.00 |
£18,500 / 49 = £377.55 |
£377.55 |
£4.53 (1.2%) |
£382.08 |
2015/16 |
£382.08 |
£19,000 / 49 = £387.76 |
£769.84 |
-£0.77 (-0.1%) |
£769.07 |
2016/17 |
£769.07 |
£20,000 / 49 = £408.16 |
£1,177.23 |
£11.77 (1.0%) |
£1,189.00 |
2017/18 |
£1,189.00 |
£21,000 / 49 = £428.57 |
£1,617.57 |
£48.53 (3.0%) |
£1,666.10 |
2018/19 |
£1,666.10 |
£22,000 / 49 = £448.98 |
£2,115.08 |
£50.76 (2.4%) |
£2,165.84 |
The member is entitled to:
Annual pension £12,065.84
Which is made up of pension built up:
before 1 April 2008 £7,700.00
between 1 April 2008 and 31 March 2014 £2,200.00
after 31 March 2014 £2,165.84
Tax-free lump sum £23,100
Can I take a lump sum?
Not a member of the LGPS?
A pension account modeller is available on the national LGPS member website. This will help you understand how the LGPS works, and shows how a pension builds up from 1 April 2014. The modeller doesn’t provide you with an estimate of benefits.