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 became a member of the LGPS, there will be a specific formula to work out how your benefits have built up 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 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?

All members have the option to give up some of their annual pension for a tax-free lump sum on retirement. For every £1 of annual pension given up, you get £12 of lump sum. The amount given up can’t be more than 25% of the total capital value of your benefits. We’ll tell you how much lump sum you can have, when your benefits become due.

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.

Pension account »

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My pension online

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Shropshire County Pension Fund

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